[Vietnamization: Border, Indochina] Vietnam plans large warehouses at border

Vietnam plans large warehouses at border

Phnom Penh Post | 14 February 2017

The Vietnamese government has launched a trade-development scheme that aims to construct 116 warehouses to store imports and exports along the Cambodian and Lao borders with a tentative completion date of 2035, a Vietnamese government official said yesterday.

Tran Manh Tiep, second secretary of the Vietnamese Embassy in Cambodia, said the Vietnamese government plans to build the warehouses at strategic border crossings to promote regional trade.

“This will help to boost bilateral trade between Cambodia and Vietnam by having more trade activity along border,” he said. “The initiative will make it easier to store and transport goods.”

While he confirmed that some of the warehouses would soon be constructed, he declined to disclose the investment capital of the plan or a detailed timeline of its implementation.

Nevertheless, state-owned Vietnam News Agency reported that the warehouses would serve as vital points for the handling of customs procedures and inspections of food safety and quality standards. It also said that the initiative was necessary to improve logistics capabilities as the region further develops.

Cambodia and Vietnam have struggled to boost bilateral trade volumes and fell far short of their announced plan to achieve $5 billion in bilateral trade by 2015. In 2014, trade between the two countries reached $3.3 billion, only to fall to $3 billion in 2015.

Tiep said final data for 2016 has not yet been compiled.Kim Savuth, president of local rice exporter Khmer Food Company, said Vietnam’s warehouse plan would benefit farmers, but could prevent Cambodia’s agricultural sector from scaling up beyond raw material exports.

“Vietnam will not buy finished products from us, but only raw products like paddy rice or other crops,” he said. “In 10 to 20 years, in order to be prosperous, we need to develop our own warehousing capabilities.”

However, Hak Sovanna, president of Kampot-Takeo-Kep Chamber of Commerce, said that it would benefit the economy as border provinces will continue to be fully dependent on buyers from their massive neighbour.

He added that the construction of warehouses by Vietnam will enlarge the ability for bulk purchase orders.

“I expect that our agricultural crops will continue to be in high demand for Vietnam so that our farmers will eventually sell their crops at better prices,” he said.