Seafood exporters change the direction to find new orders

Seafood exporters are saving production costs and keeping export orders. Photo: T.H

Changing in production scale

Sharing about the situation of tuna exports in the first 6 months of 2023, Ms. Cao Thi Kim Lan, Director of Binh Dinh Seafood Joint Stock Company, said that the company's tuna export to the US and European markets decreased by 30 -40%. To suit the current difficult context, the company rearranged production lines, rearranged each production factory accordingly to save costs thoroughly; arrange skills for workers in each stage to reduce the norm of raw materials put into processing...

With a view of redirecting the market, Ms. Nguyen Thi Minh Tue, Director of Phu Thanh Co., Ltd. said that, in the current context, in order to penetrate into the potential niche market, businesses need to research to develop the new market. In which, the development of products coordinated processing to improve added value is also a good direction. Currently, there are a number of food processing enterprises that have also had initial success, but there are still many opportunities for other businesses. Along with that, businesses need to better control antibiotic residues in farmed products, because many markets are very strict about this regulation. “Currently, while the EU still accepts some antibiotics with the low norm, difficult markets such as Canada require a mandatory antibiotic norm of 0. Therefore, if the control is not well, it will be very easy to lose the opportunity to export to this market”, Ms. Tue shared.

Mr. Huynh Thanh Linh, Import-Export Director of Hai Vuong Co., Ltd. acknowledged that the biggest difficulty and challenge of the company at the moment was that the output market was shrinking, the main markets such as the US, and the EU... had been no sign of recovery, export prices had fallen sharply, while domestic production costs remained high. Therefore, the company's current goal was to make efforts to produce value-added products, maintain the market and create jobs for employees, at the same time, perfect the production system, waiting for the recovery of the market.

Similarly, with the view of a medium-sized seafood enterprise, Mr. Pham Quoc Anh, General Director of Hanoi Seafood Import-Export Joint Stock Company chose a solution to focus on processing activities for export, because this sector was less affected than export processing enterprises. Accordingly, the company was flexible in converting production models as well as the structure of processed goods.

Profit shrinking

Assessing the export situation in the last 6 months of the year, although it is brighter but still very difficult, in addition to looking for new export orders, many seafood businesses have made efforts to reduce costs, accept to reduce profits to maintain export production.

In the research report of SSI Securities Joint Stock Company released at the end of last week, SSI experts said that the average price of aqua feed peaked in May 2023 at VND 14,900 per kilo and feed companies had started to reduce the price of aqua feed since June 2023 (about VND 300 per kilo). Thus, the price of aqua feed was still 8% higher than in the same period in the first 6 months of 2022. Because the price of animal feed accounted for 60% of the cost of goods sold, along with the industry average selling price decreased in the first half of the year, most manufacturing companies in the industry narrowed profit rates, but profits might bottom out in the first half of 2023.

According to SSI experts, although the prospect of orders to the US and China was still uncertain due to the slow recovery of the economy and high inventory levels, however, pangasius exporting companies would start to record improved profit in the second half of 2023, thanks to lower costs including Lower input prices; reduced shipping costs. From the above fact, it is expected that leading exporters to the US market such as Vinh Hoan Joint Stock Company will record a slight decrease or flat rate of profit compared to the same period in the third quarter of 2023 and positive profit growth from the fourth quarter of 2023.

According to the management of Vinh Hoan Joint Stock Company, orders in the third quarter of 2023 were gradually improving in terms of consumption. With this signal, it was expected that net revenue and net profit would reach 11 trillion dongs in 2023, down 17% compared to the same period, and 1.3 trillion dongs, down 34% compared to the same period.

Similarly, in June 2023, the shrimp export turnover of Sao Ta Food Joint Stock Company increased sharply, with revenue of VND 442 billion, an increase of 71% compared to the previous month, close to the peak of exports in 2022. Net revenue was estimated at VND 2.1 trillion in the first 6 months of 2023, down 25% compared to the same period. Sao Ta's shrimp export turnover to the US market is showing signs of improvement and reached US$ 68 million, up 24% over the previous month; The revenue of Sao Ta Food Joint Stock Company is expected to recover from the second half of 2023.