Samsung expands into Vietnamese aviation sector

Samsung SDS, the Korean conglomerate’s information and communications technology (ICT) and logistics arm, will enter the Vietnamese market through a joint venture with Aviation Logistics Service, which operates ALS Cargo Terminal – billed as, “the most modern cargo terminal at Noi Bai International Airport.” Following last month’s joint venture with Thailand’s Acutech, the ALS deal marks the second chapter of Samsung’s market expansion strategy in the Southeast Asian region.

Samsung SDS will provide its logistics services, including global and inland transportation, warehousing service, and customs brokerage. ALS adds value to the deal through its local customer network and external sales force.

Electioneering in the U.S. aside, Samsung SDS and other firms pursuing growth in Asia are betting on increased trade, and some manifestation of the politically contentious Trans-Pacific Partnership (TPP) making its way to President Obama’s desk – or that of his successor. “Vietnam has been favored as new manufacturing location by a number of global companies seeking benefits from the changing trade environment due to the U.S.-led Trans-Pacific Partnership and the formation of the ASEAN economic community,” explained Cho Chung-un at the Korean Herald.

“Thanks to the recent change of international trade environment related to Trans-Pacific Partnership and ASEAN Economic Community, global companies are relocating their manufacturing facilities to Vietnam, which leads to increasing foreign direct investments and export-import volume,” Samsung said in a statement. Companies with extensive intellectual property and cross-border trade, such as Samsung, stand to benefit from the impending trade deal through longer and stronger property rights protections and easier cross-border business operations.

A Pew Research Center survey taken in March found that 51 percent of Americans still support free-trade agreements, despite the souring public discourse, while only 39 percent oppose them. The political reality is that such treaties garner bipartisan support, and Obama could still push the bill through.

On the other side of the world, trade is ramping up irrespective of the TPP arguments, and Hanoi’s Noi Bai International Airport is the focal point of high-value international trade. Samsung Electronics accounted for 20 percent of all Korean exports to Vietnam in 2015, amounting to US$32 billion, according to local reports. Samsung SDS, meanwhile, handles about 40 percent of cargo volume at Hanoi airport.