Hanoi (VNS/VNA) - Demand for cold storage is increasing due to the lowerconsumption of food during the COVID-19 pandemic.

Food accounts for about 80 percent of cold storage demand in Vietnam, accordingto data.

However, that figure is rising as the F&B industry suffers and food exportorders are cancelled.

From mid-March, the demand for cold storage has been rising in Hanoi. Accordingto Tan Bac Nam Cold Storage Firm, demand doubled last month. A representativefrom the firm said many restaurants had closed and needed to put their stocksin cold storage.

Meanwhile, the owner of a 3,000-tonne cold storage facility in Ho Chi Minh Citysaid his unit was full until the end of April so he could not receive any moregoods despite the demand.

Seafood was reported to have the highest demand for cold storage.

According to the Vietnam Association of Seafood Exporters and Producers(VASEP), 20 to 40 percent of seafood exports orders had been delayed, while 20to 30 percent had been cancelled.

VASEP General Secretary Truong Dinh Hoe said that due to the prolongedpandemic, seafood enterprises were in serious shortage of cold storage, forcingthem to cut purchases of fresh produce.

Hoe also said it would be difficult for Vietnam to find new markets onceconsumption resumed after the pandemic.

VASEP has asked the Ministry of Agriculture and Rural Development to propose tothe Government and State Bank incentive policies to support local enterprisesto build cold storage facilities.

This would include zero interest loans for the first two years and a 50 percentinterest rate reduction for the next four years for long-term loans to buildcold storage units with a minimum capacity of 5,000 pallets.

It also asked for a 50 percent reduction of corporate income tax for the firsttwo years for cold storage businesses.

Opportunities for cold storage industry

In these circumstances, real estate research firm CBRE Vietnam told local mediathe lack of cold storage units was an opportunity for the industry. The growthof online sales and multi-channel retail could be an advantage for firms withcold storage units near metropolitan areas.

According to a report by FiinGroup, an integrated service provider of financialdata, business information, industry research and other premium services, thetotal capacity of cold storage in Vietnam stood at 600,234 pallets in 2018.

The firm also said due to rising demand for cold storage, many providers areexpected to expand.

Earlier, Ken Research, a global publisher of market intelligence, reported thatfrom 2016-21, the Vietnam Cold Chain Industry was estimated to register apositive CAGR of 10.4 percent thanks to the growing number of supermarkets andseafood exporters.

Ken Research estimated the local cold chain market would reach 1.8 billion USD nextyear./.