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  August 29th, 2016 | Written by

Samsung SDS Enters Vietnam

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  • Samsung SDS established JV with Vietnam's number one company in air freight operator.
  • Vietnam's logistics market expanding at 15 to 20 percent per year.
  • Samsung's Vietnamese JV expected to improve responsiveness to local businesses.

Samsung SDS is expanding its business in Southeast Asia’s logistics market. The company—which serves South Korea’s electronics industry with IT and logistics services—announced a joint venture with Aviation Logistics Service (ALS), Vietnam’s leading air freight terminal operator.

This is the second joint venture in Southeast Asia for Samsung SDS, following the announcement of a joint venture with Thailand’s number one customs clearance company, ACUTECH, last month.

The rapid growth of Vietnam’s logistics market—projected at 15 to 20 percent per year—drove Samsung‘s decision to establish a joint venture. According to a company statement, changes in the global trade environment, such as the Trans-Pacific Partnership and the ASEAN Economic Community, are motivating global companies to relocate their manufacturing facilities to Vietnam. This leads to increasing foreign direct investments and export-import volume.

The fact that mobile phones and components became Vietnam’s largest export item since 2013, also influenced Samsung SDS to make this strategic decision. By utilizing its current capacity in global transportation, Samsung SDS may expand its business beyond the Samsung group. Samsung SDS currently handles 40 percent of all import and export logistics at the Hanoi airport.

Samsung Electronics, which is one of Samsung SDS’s largest customers, covered 20 percent, or $32 billion, of all Vietnam’s exports of $162 billion last year.

Hanoi-based ALS is the leading air freight terminal operator in Vietnam. ALS is the first and only company in Vietnam providing an off-airport cargo terminal system since 2007.

Samsung SDS plans to provide its integrated logistics service, including global and inland transportation, warehousing service, and customs brokerage, while utilizing ALS’s customer network and strengthening its sales force through the partnership to attract new customers.

Samsung SDS is also discussing partnership agreements with Chinese companies and will continue its efforts to provide its advanced logistics business to customers outside the Samsung group.

Samsung SDS provides integrated logistics solutions from supply chain management to logistics execution under the label CelloSCLISTM. Samsung SDS launched a logistics platform called Cello Square in August 2015, in order to create an ecosystem in the logistics business.