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Vietnamese seafood attracts many foreign visitors at the international seafood exhibition held at the end of August, 2022. Photo: T.H

Overcome difficulties

As a large seafood exporter in the Mekong Delta region, Mr. Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Seafood Joint Stock Company, shared his experience in dealing with difficulties.

According to Mr. Luc, Sao Ta operates on a 5-year strategic basis with financial goals, ensuring sufficient operating capital. This enterprise attaches great importance to raising capital on the stock market, so it has a very low debt-to-capital ratio.

“In order to overcome difficulties, Sao Ta has minimized its inventory, even at low prices, it has to be sold at a loss; reduce costs, maximize savings, review all norms; attaching importance to technology application in production activities at every stage that technology can be applied, it must be done immediately in order to improve governance, increase productivity, and reduce product quality risks," Mr. Luc said.

In order to overcome difficult challenges, Mr. Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers, said that Sao Ta's case was very successful thanks to the early implementation of the shrimp farming system at the farm scale, which helps businesses take an active part in the source of raw materials for processing and export, thereby better understanding the enterprise’s own production chain. This is also one of the ways to overcome the current chall’nges for seafood exports.

Mr. Huynh Thanh Tan, General Director of Ca Mau Seafood Processing and Services Joint Stock Company, said that export activities will face some difficulties and challenges when the world’s demand is slowing down.

The main reason is the impact of inflation and recession, especially in major seafood import markets such as the US and Europe. Many currencies are depreciating against the US dollar, which has affected the profits of importers, so the demand for seafood imports has also decreased. In addition, the lack of raw materials for export processing is also a challenge for shrimp processing enterprises for export.

Assessing the current impacts of the seafood industry, Mr. Truong Dinh Hoe said that the reality for seafood enterprises is quite difficult. This is not the difficulty of next year, but the difficulty of the end of 2022 and the transition to 2023.

The market cannot go down forever, there will still be times when it will go up, but it is important when the market goes up again.

“The current macroeconomics of Vietnam are considered to be quite good, so it will not be affected too much by external problems as in 2008. In addition, the current health of enterprises cannot be said to be strong but certainly will be stronger than the 2008 period. On that basis, we should not be too pessimistic, but businesses must continue to hold on and catch opportunities," Mr. Truong Dinh Hoe said.

Capital flow into the seafood industry will be more favorable

From a financial perspective, economist Dinh The Hien is optimistic about seafood businesses when he thinks that, in the export structure of 10 months of 2022, seafood is the industry with the strongest increase compared to the same period last year, obtaining over 30%.

The use of mobilized capital of listed companies in the seafood industry is quite stable; the revenue generated is in harmony with the amount of capital. In 2022, listed companies in the seafood industry have a good capital structure compared to the industry.

Dr. Dinh The Hien forecasts that the fourth quarter of 2022 and the first quarter of 2023 are the most difficult periods. However, by the end of the fourth quarter of 2022, the commercial banking system will be stable, and by the first quarter of 2023, the corporate bond market will be good again.

Lending interest rates by the end of the first quarter of 2023 will cool down, to about 10-14%; capital into production from the first quarter of 2023 will start well and in the second quarter will increase sharply. Particularly, the seafood industry is a working capital industry, which means that it is always prioritized for loans by banks, while the revenue of this industry is still good, so it is forecast that next year, the capital flow into the seafood industry will be more favorable than other industries.

Not only having an advantage in mobilizing capital, Vietnamese seafood processing and exporting enterprises are considered as one of the countries with the most modern seafood processing technology.

According to Mr. Truong Dinh Hoe, there are more than 700 processing facilities that have obtained the mandatory certifications of the EU and China. USDA equivalency recognition for pangasius export industry. In addition, the number of enterprises with an international sustainability certification is increasing, meeting the increasing requirements of the import market.

“From the above fact, in 2023 the seafood industry will follow the opposite trend of 2022. If the first and second quarters of 2022 grow well, the third quarter begins to be difficult, the fourth quarter is very difficult, then in 2023, the growth in the first quarter is slow, the second quarter is stable, and the third and fourth quarters will outperform. Growth in 2023 is not inferior to 2022, in which the strongest market is the US,” Dr. Dinh The Hien said.

It is expected that by the end of November, seafood export sales will exceed USD 10 billion. By the end of 2022, the industry's turnover will reach USD 11 billion for the first time. In which, shrimp exports are expected to reach USD 4.3 billion, pangasius surpasses USD 2 billion and can reach USD 2.5 billion; tuna crossed the USD 1 billion mark for the first time; and the seafood group is estimated at USD 3.2 billion.