Production of value-added shrimp for export at Sao Ta Food Joint Stock Company. Photo: TL

Deep processing will make a breakthrough

According to seafood exporters, currently, the inventories in some countries are quite good, such as Ecuador and India, but focus on semi-processed goods, so the deeply processed goods of Vietnamese enterprises have a strong foundation. Favorable foundation for breakthrough in the next 3 months, when during the holiday season, the service segment has increased demand for deeply processed goods.

According to Mr. Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Seafood Joint Stock Company (FMC), currently, FMC's exports have made progress, especially in the last 2 months, when the level of decline has gradually narrowed, by the end of August 2023, decreased by 19.8% compared to the same period last year. This trend is maintained, and it is likely that by the end of the year, this margin will narrow to about 10%. FMC will continue to make efforts, but for now, this 10% figure is quite satisfactory, based on the existing contract foundation, while the industry-wide figure is likely one and a half times higher.

With efforts, this year's profit also reached 90% compared to last year. This number does not create the joy expected at the beginning of the year, but at least it is a consolation when shrimp consumption prices are too low, causing profit margins to drop.

Overall, the assessment of activities in 2023 is not favorable, since then there has been a decline in the previous year, but compared to the whole industry, it maintains a quite good position especially in 2023, although full of difficulties, there are also many activities that are the foundation for future sustainable development.

According to Dr. Tran Huu Hiep, in the general context, seafood exports are unlikely to have a spectacular rise. However, there is much room for businesses to take advantage of to expand markets and increase exports in the coming months.

Recent developments in major markets such as the United States and China are more positive in the last months of 2023. According to Mr. Hiep, the clearest signal of market recovery is China. In July 2023, export turnover to this market increased by 45% over the same period last year, reaching nearly US $180 million. Import demand of commercial traders increases as inventories are gradually decreasing and preparing orders for year-end and New Year festivals.

Along with the United States, EU, and Japan, ASEAN countries are Vietnam's 4th largest seafood export market. These are markets that are identified as having great potential. In addition, some new export markets in Asia and the Middle East have the potential to expand. There is still a lot of untapped room for growth in seafood value to increase brain matter content through deep processing, digital transformation, import-export coordination, and exploitation of distribution channels and domestic seafood consumption.

Meeting market requirements

Meeting the increasing requirements of some import markets, seafood processing and exporting enterprises pay special attention to participating in the circular economy and green economy. According to Mr. Ho Quoc Luc, this is an extremely hot and current issue for promoting participation in the European market (EU and UK). In the immediate future, these are two markets, but surely in the short term, other large markets will have similar requirements. The criteria are increasingly clear such as specific actions for the net zero goal, such as saving water resources, and using clean energy, such as the target of using packaging with at least 30% from recycled materials...

These actions should not be general but must be clearly quantified and especially certified by a third party. FMC has been making efforts for these goals because they are the foundation for sustainable development. FMC is also fortunate to be a member of THE PAN GROUP. With a thorough strategy that places top priority on sustainable development and transparent operations, according to progress, last month THE PAN GROUP organized a workshop on these topics for member companies and invited leading experts to come to consult together. Thereby increasing awareness, understanding, and experience for leaders of member units to join hands to implement the content of ESG more completely.

Seafood processing enterprises exporting to the EU have proactively notified owners of preliminary processing facilities providing raw materials, semi-finished products, and finished seafood preservation facilities to register with the Department of Quality, Processing and Markets Development and units under the Department in the area in charge to be appraised and evaluated for addition to the List of establishments permitted to export to the EU.

Competent agencies organize registration with EU authorities to include the names of preliminary processing facilities supplying raw materials and semi-finished products to export processing facilities and independent warehouses preserving finished seafood products in the list of establishments. The facility is allowed to export to the EU in case the appraisal and assessment results meet the requirements.

In particular, after the EU's fourth monitoring, inspection, and evaluation period on efforts to remove Vietnam's "fishery yellow card" in October 2023, if there are positive results, it will contribute to promoting exporting Vietnamese seafood to this high-end market of nearly half a billion people.