Seafood export enterprises navigate through "storms"

VCN - After peaking at 11 billion USD in 2022, seafood exports in 2023 encountered numerous challenges, only achieving about 9 billion USD. Amidst market and raw material processing difficulties, seafood export enterprises exerted significant efforts to weather the "storm".
Seafood exports avoid dependence on imported raw materials Seafood exports avoid dependence on imported raw materials
Seafood export still has many difficulties Seafood export still has many difficulties
It is necessary to solve the problem of quality and market for sustainably seafood export It is necessary to solve the problem of quality and market for sustainably seafood export
Seafood export enterprises have broadened their scope.Photo: S.T
Seafood export enterprises have broadened their scope.Photo: S.T

Maximizing Each Order

Mr. Truong Huu Thong, Director of Thong Thuan Company Limited, while exporting a shrimp consignment to the European market at the year's end, reflected that 2023 was particularly challenging for seafood businesses. They faced a declining global economy, especially in key markets like Europe, Japan, and the US, which together constitute over 90% of the company's market share. In 2023, the company's export orders decreased by more than 20% compared to 2022. Nevertheless, the company strove to maximize each order to maintain employment for its workers.

Mr. Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Foods Joint Stock Company, a large shrimp exporting enterprise in the Mekong Delta, noted that the current volume of marketable shrimp is low. Processing companies are receiving only half the usual daily amount of shrimp raw material. This is attributed to a reduction in orders. Vietnamese companies' sparse orders are often perceived as overpriced by 1-2 USD/kg compared to other countries' offerings. “Even at these prices, companies are not profiting, sometimes even incurring slight losses, but they continue to produce, retain orders, and provide some employment for workers to earn a living," Mr. Luc emphasized. Sao Ta Foods Joint Stock Company has accordingly adjusted its 2023 revenue target to 4.870 trillion VND and pre-tax profit to 300 billion VND, marking a 17% and 25% decrease, respectively, from the initial plan. This profit target is also 6% lower than the previous year's.

Vin Hoan Corporation, a leader in catfish exports, reported a substantial decline in catfish exports in 2023, including in traditional markets. Ms. Truong Thi Le Khanh, Chairwoman of the Board of Directors, highlighted that catfish exporting enterprises have expanded to over 140 countries. However, she noted the catfish processing industry's heavy reliance on unskilled labor as a future challenge. Adopting machinery and technology in production to reduce labor-intensive processes is a strategic solution. The industry needs to invest in technology to meet increasing environmental and social security standards. Flexible mechanisms and state commitment are essential to boost enterprises in implementing deep-processing export development programs.

All enterprises agree that in 2023, selling prices have fallen to a minimum, and despite increased revenue, profits are minimal. The abrupt reduction in export orders at the end of 2022, extending into 2023, has posed significant challenges for businesses, necessitating market reorientation and maximizing every order to sustain export production.

Enhancing processed products

Achieving the 2023 business targets has become a common challenge for many exporting companies amid declining export orders. Many have had to adjust their revenue, reorient exports, restructure the market, and notably increase value-added products.

According to Vin Hoan Corporation's leadership, the company's key export product is frozen catfish fillets, contributing over half of the company's 2023 revenue from processed farmed fish products. The company increasingly relies on revenue from value-added products, collagen, gelatin, and processing salmon for its Japanese partners. When the market is subdued, value-added products tend to be less impacted by supply and demand fluctuations. Vin Hoan Corporation produces not only breaded catfish fillets but also diversifies with various products, including seafood noodles and vegetable dishes.

For shrimp, a primary export commodity, Mr. Ho Quoc Luc noted that shrimp exports have exceeded 4 billion USD, ranking among the top 10 high-revenue export products known for advanced processing capabilities and expansion potential. However, the Vietnamese shrimp industry is grappling with continuous and complex challenges. The foremost issue is the low success rate in farming, leading to high costs. Additionally, frequent diseases in farmed shrimp reduce productivity and size at harvest. A lack of capital for production among most farmers further exacerbates the situation. These challenges are expected to persist and intensify through 2024, highlighting the urgency of immediate adaptive strategies.

Mr. Truong Huu Thong shared that Thong Thuan Company Limited has innovated sales methods, optimized costs, and explored cost-effective shrimp farming techniques. Companies must be adaptable, assessing market realities to devise coping strategies. The company has maintained stable production and workforce by transitioning to value-added products such as sushi, battered, and tempura.

Mr. Doan Van Dong, Director of Can Tho Seafood Import-Export Company Limited, anticipates that the challenging landscape of 2023 may extend into 2024. As a result, companies must proactively devise survival strategies, identify and confront the array of challenges and specific situations to navigate through them. In a shift from earlier expansion strategies, companies are now focusing on optimizing their existing product lines, enhancing quality, and improving production efficiency. Given the near saturation of Vietnam’s value-added shrimp products in the market, companies are advised to concentrate on refining the quality, packaging, and design of their existing products, rather than seeking new markets or customers. Retaining current, loyal customers, upgrading equipment, modernizing facilities, caring for the workforce, and enhancing wages to retain skilled labor are vital for ensuring stable employment, skill advancement, and stabilizing production to weather this challenging period.

Despite facing a multitude of challenges and obstacles, along with the support from regulatory bodies in trade promotion, easing capital and procedural constraints, etc., seafood companies have strived to surmount a difficult year, successfully earning more than 9 billion USD from their export endeavors.

By Le Thu/Tran Minh

Related News

Quang Ninh Customs seeks solutions to promote import and export

Quang Ninh Customs seeks solutions to promote import and export

VCN - Quang Ninh Customs Department has made efforts to synchronously deploy solutions to accompany, support and resolve difficulties for businesses, contributing to improving import and export activities through the area.
Coconut is expected to become a billion-dollar export item

Coconut is expected to become a billion-dollar export item

VCN - Talking to the press at the ceremony to launch the first train carrying fresh coconuts to China, Mr. Luu Van Phi, Director of the Department of Industry and Trade of Tien Giang province, said that Vietnam's agricultural export potential, especially fresh coconuts, is expanding with the appearance of international railway transportation from Song Than station.
Plastic exporters interested in converting to recycling technology

Plastic exporters interested in converting to recycling technology

VCN - The Vietnamese plastics industry is facing major challenges in terms of plastic waste and recycling needs. Secretary General of the Vietnam Plastics Association Huynh Thi My (pictured) shared important information about the transformation in production of plastics enterprises to meet increasing export demands.

Latest News

Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - Tensions between Israel and Iran escalate, tuna businesses are worried, they may have to stop export orders to the Israeli market in the last months of the year.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.

More News

Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countries, thereby maintaining advantages and developing on "away grounds".
Lao Cai Customs sees a triple-digit surge in export-import turnover

Lao Cai Customs sees a triple-digit surge in export-import turnover

VCN - Updated from the beginning of the year to October 24, total import and export turnover through Lao Cai Customs Department increased by 102%.
Logistics sector must embrace innovative trends to stay competitive

Logistics sector must embrace innovative trends to stay competitive

The Vietnamese logistics industry must adapt to new trends and enhance infrastructure to remain globally competitive, speakers said at an event in Ho Chi Minh City on October 31.
Vietnam’s agro-forestry-aquatic product exports likely to set new record

Vietnam’s agro-forestry-aquatic product exports likely to set new record

Vietnam’s agro-forestry-aquatic product exports are likely to achieve a record high of 62 billion USD in 2024, said Deputy Minister of Agriculture and Rural Development Phung Duc Tien.
UKVFTA greatly benefits Vietnam-UK trade: Experts

UKVFTA greatly benefits Vietnam-UK trade: Experts

The UK-Vietnam Free Trade Agreement (UKVFTA), signed into law three years ago, has clearly benefited trade cooperation between the two countries, particularly in the context of Vietnam’s exports to most other major markets declining due to geopolitical tensions and headwinds in the global economy, said experts at a conference in Hanoi on October 30.
Agricultural exports likely to exceed 60 billion USD amid challenges

Agricultural exports likely to exceed 60 billion USD amid challenges

With swift production recovery and continued growth, Vietnam's agricultural sector could potentially surpass the 60 billion USD export target, according to the Ministry of Agriculture and Rural Development (MARD).
Vietnam-Philippines trade likely to exceed 8 billion USD for first time

Vietnam-Philippines trade likely to exceed 8 billion USD for first time

With the current rising trend, trade between Vietnam and the Philippines is likely to exceed 8 billion USD for the first time to hit about 8.5 billion USD in 2024, with Vietnam’s surplus of more than 3 billion USD, according to the Vietnamese Trade Office in the Philippines.
A bitter nut

A bitter nut's surprisingly sweet export success

VCN - The latest statistics from the General Department of Vietnam Customs show that in the first 15 days of October (October 1-15), Vietnam's coffee exports reached 21,489 tons, with a turnover of US$125.8 million.
Vietnam

Vietnam's daily import expenditure surpasses VND25,000 billion

VCN - From the beginning of the year to mid-October, on average, Vietnam spent more than USUS$1 billion (equivalent to more than VND25,000 billion) each day importing goods.
Read More

Your care

Latest Most read
Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - In recent years, Israel has always been Vietnam's leading tuna export market after the US and the EU. Therefore, the recent escalation of Israel-Iran tensions is affecting Vietnam's tuna exports to this market.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.
Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countr
Mobile Version