Jul. 09, 2019
Sumitomo Corporation Acquires Stake in Gemadept Corporation – Vietnam’s leading company in Port operation and Logistics
Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo; hereinafter, “Sumitomo”), together with the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (hereinafter, “JOIN”) and Suzuyo & Co., Ltd. (hereinafter, “Suzuyo”), has acquired, through a locally established joint venture company, a 10% stake (hereinafter, “the Investment”) in Gemadept Corporation, a Vietnam’s leading company in Port operation and Logistics (hereinafter, “GMD”), in order to participate in the port terminal management business in Vietnam.
Vietnam has been seeing logistics demand grow as production sites have been relocated to that country as part of “China-plus-one” corporate strategies, propelled by the tailwind of rapid economic growth and a consequent expansion of consumer markets and by the impact of US-China trade frictions. Container cargo handling volume in 2017 exceeded 12 million TEU (*1) and, with growth expected to outpace the GDP growth rate of 6.5% (International Monetary Fund forecast), handling volume should reach about 23 million TEU by 2025, and logistics infrastructure is expected to expand further as part of industrial infrastructure.
GMD is Vietnam’s leading privately held (and publicly listed) company in Port operation and Logistics. GMD owns and operates a total of seven ports from North to South, including Nam Hai Port, Nam Hai Dinh Vu Port, Nam Dinh Vu Port (Hai Phong City), Dung Quat Port (Quang Ngai Province), Phuoc Long Port (Ho Chi Minh City), Binh Duong Port (Binh Duong Province) and Gemalink Deep-sea Port project (Ba Ria Vung Tau Province). The Company handled 1.7 million TEU in container cargo in 2018, giving it a 12% share nationwide and making it the second-largest container terminal operator in Vietnam. GMD is also engaged in a broad range of logistics-related businesses, including distribution centers, transportation, project cargo transport, airport cargo terminal operation, and shipping, etc.
In making the Investment, Sumitomo concluded a business tie-up agreement with GMD and nominated a board member who was elected at GMD Annual General Meeting of Shareholders in 2019 with the aim of strengthening relations and collaboration opportunities. It will be contributing to GMD’s growth and collaborating in logistics efforts already underway in Vietnam as well as in businesses in port hinterlands, such as industrial park operation. Sumitomo will also be seeking to establish wide-area smart logistics that will enable it to optimize logistics cost/time, reduce environmental impacts, and improve cargo security with IoT technology-centered solutions.
By teaming up with JOIN and Suzuyo for this Investment, Sumitomo is looking to achieve greater logistics efficiency that will improve the convenience and competitiveness of companies and communities in Vietnam, including tenant companies in industrial parks, and thereby contribute to the economic vitalization and development of Vietnam and neighboring countries.
(*1) TEU: Twenty-foot equivalent unit: a unit used to indicate the yearly cargo volume handled by a port in terms of twenty-foot containers (e.g., 200,000 TEU represents 200,000 twenty-foot containers handled in a year)
|■ Company profile of GMD|
|Company name||:||Gemadept Corporation|
|Location||:||Ho Chi Minh City, Vietnam|
|Representative||:||Do Van Minh|
|Year established||:||1990 (listed on the Ho Chi Minh City Stock Exchange in 2002)|
|Description of business||:||Port operation and Logistics|
■ Investment scheme
■ Photograph (Panoramic view of terminal operated by GMD)
■Sumitomo Corporation’s Material Issues
Sumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to “the Development of Local Communities and Industries” and “Providing Diverse Accessibility”.