Flexible seafood enterprises increase exports

The Covid-19 pandemic has changed the consumption habits of seafood products, disrupting the needs of consumer market segments. However, many Vietnamese seafood enterprises have been flexible in product and market strategies to turn challenges into opportunities.

Seafood enterprises make efforts to overcome difficulties to expand exports. Photo: T.H

Growth in difficulty

According to information recently announced by Sao Ta Food Joint Stock Company, in April 2021, Sao Ta (including Khang An Co.) processed 1,575 tons of finished shrimp, equaling 131% over the same period last year.

Overall sales reached US$16.4 million, equaling 146% over the same period in 2020. In the first four months of 2021, Sao Ta's sales and output grew by over 30% over the same period last year. In the context of single-digit growth of the whole shrimp industry, the above figures are positive.

This achievement is the result of the process of building a brand, but it is also partly due to the restructuring of the organization and operation, adding an active focal point for production and business of this enterprise.

According to Mr. Ho Quoc Luc, Chairman of Sao Ta's Board of Directors, in the face of the complicated developments of Covid-19, production units always prioritize solutions of the prevention, prepare and reserve necessary materials for shrimp farms to ensure raw materials for export production.

Starting from May, Sao Ta has great joy regarding production materials, that is, the shrimp farm is progressing very well, shrimp growing evenly and quickly. It is expected that next week, harvesting will be carried out, lasting a whole month to serve the production of exports. However, the fact that international freight rates have not cooled down is also considered a significant disadvantage for all enterprises exporting goods.

However, according to Mr. Ho Quoc Luc, the above difficulties create opportunities for the Vietnamese shrimp industry. The biggest competitor in terms of volume and low price is Indian shrimp. Currently, the farms there are worried that the supply chain will break at any time, so they will harvest early, when the shrimp size is small. On that foundation, there is a business plan.

Many other seafood enterprises have had a breakthrough in exports. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), by the end of April 2021, the country's seafood exports were estimated at over US$2.5 billion, up 13% over the same period last year. In 2020 and the first two months of 2021, due to the impact of Covid-19 disrupting the supply chain, especially the logistics segment, Vietnam's seafood exports have declined or slowed down. From March 2021, Vietnam's seafood exports began to recover significantly with a growth of 17% over the same period. In April, exports broke out stronger with a growth rate of nearly 30% to nearly US$800 million.

Turn challenges into opportunities

According to VASEP's assessment, this unexpected positive result has shown the strong adaptation and breakthrough efforts of the Vietnamese seafood business sector.

Covid-19 has changed the consumption habits of seafood products, disrupting the needs of consumer market segments. In that turmoil, Vietnamese seafood enterprises have been flexible in product and market strategies to turn challenges into opportunities.

Statistics in the first quarter of 2021 show that there are 563 units participating in seafood export (statistics for enterprises with sales of US$100,000 or more). Compared to the first quarter of last year, 80 units left the market.

However, in the first quarter of this year, there were 129 new enterprises participating in exporting, along with many enterprises that found opportunities for seafood business in the Covid-19 pandemic, VASEP member enterprises pioneered and broke through the Top 100 seafood exporters in the first quarter of 2021 (with sales of US$4 million or more) accounting for 66% of the total export turnover of the country.

Led by Minh Phu Seafood Group and Soc Trang Seafood Joint Stock Company, they are closely following each other in terms of sales with US$58.5 million and US$57.4 million. Minh Phu sets a target this year of revenue at more than VND15,770 billion and profit after tax of VND1,400 billion. Production output is expected to reach 61,500 tons and export value of US$638 million.

In the first quarter, export turnover of Vinh Hoan Company was nearly US$54 million. In 2021, Vinh Hoan targets profit of VND700 billion after tax, down 3% from the previous year while revenue increased by 22% to VND8,600 billion. Vinh Hoan said that this year, the company plans to spend VND1,300 billion for construction investment, of which VND700 billion is to build an animal feed factory, Vinh Hoan hatchery and own land for the complex of high-tech agriculture and fisheries. Besides, the company spends VND200 billion to renovate factories in Thanh Binh and Vinh Phuoc Foodstuffs, the remaining VND400 billion is for other investments.

In addition, according to VASEP's analysis, many businesses succeed thanks to a favorable market structure. For example, Bien Dong Seafood Co., Ltd, grew by 20%, ranked 7th in the top export enterprises, Van Duc Tien Giang Export Processing One Member Co., Ltd, increased 29% in sales, from the 20th position to Ranked in Top 15 seafood enterprises and Top 5 pangasius enterprises.

These enterprises all have a large proportion of the US market. There are also companies that choose the key market as China and also have a strong breakthrough, such as: TS Truong Giang Joint Stock Company increased by 21%, from position 36 to 29 in the Top Enterprise; Cadovimec II Seafood Import-Export and Processing Joint Stock Company had an outstanding increase in sales, more than 3 times and from the position outside the Top 100 to 29.

Besides, in the context of the Covid-19 pandemic, businesses involved in shrimp and pangasius are somewhat more favorable than seafood enterprises because the source of available materials in the country is more stable, while seafood raw materials are difficult making the export door even narrower.

However, in that difficulty, some enterprises still emerged from the flexibility of export seafood products when the demand increased for canned products, dry goods, surimi.

With the effort of grasping information on market trends and fluctuations, flexibly adjusting product and market structure, seafood enterprises will continue to make a breakthrough in export turnover in the second quarter. Seafood exports in the second quarter of this year will increase by 10% to reach over US$2.1 billion.