Japanese Meito Transportation has signed a contract with Toda Industries Vietnam to set up a US$4.3 million joint venture to provide logistics services.

The joint venture, Meito Vietnam, in which each of the two firms hold a 50 percent stake, will provide cold storage warehousing services, reported Vietnam News Brief Service.

The logistics sector generates US$20 billion a year, accounting for 20.9 percent of Vietnam’s gross domestic product, said Do Xuan Quang, chairman of the VLBA and the ASEAN Federation of Forwarders Association.

According to the Vietnam Logistics Business Association (VLBA), most of the 1,200 logistics firms in Vietnam are based in HCM City and Hanoi and are small and medium. Meanwhile, 25 multinational logistics enterprises operating in the country have an 80 percent market share.

Major global names in logistics such as Singapore-based APL Logistics, Germany’s Hapag-Lloyd and Japanese shipping firm NYK Line all have a presence in Vietnam.