Illustrative image (Source: VNA) Hanoi (VNS/VNA) - Rising productioncosts are harming the competitiveness of Vietnamese seafood products, accordingto experts. These include the prices of feed, material input, electricity andlabour.
The average retail price for power increased8.36 percent last week, according to the Ministry of Industry and Trade (MoIT).
The hike means that electricity bills have risenfrom 1,720 VND (7.49 US cents) per kWh to 1,864 VND (8.03 cents), excludingVAT.
Power tariffs for businesses and industrialzones are now divided into two levels: 3,076 VND per kWh for peak hours and 970VND per kWh for off-peak hours.
Duong Nghia Quoc, Chairman of the VietnamPangasius Association, said the increase in power prices has worried tra fishproducers because rising input costs will impact production and selling prices.
Quoc was quoted by the Nong thon ngaynay newspaper as saying that at present, electricity consumption forfarming and processing of aquatic products as well as operation of aquatic feedfactories is significant. Competition at home and abroad is also becomingincreasingly fierce.
For instance, a tra fish(pangasius) processing factory with medium capacity in Dong Thap provinceusually pays 10 billion VND for electricity each month. With the latestincrease in power prices, factories will be paying many times more.
Freezers and air conditioning systems at seafoodprocessing enterprises, especially factories processing seafood products forexport, accounts for over 85 percent of total power consumption, he said.
The tra fish industry hassuggested that the electricity sector should consider and adopt reasonablepolicies to create favorable conditions for production, especially in theagricultural and fishery sectors.
Electricity prices should increase according toa schedule with an initial surge rate of 3-4 percent, followed by suitablechanges. An immediate price increase of 8.36 percent is a shock to enterprises,according to Quoc.
The State should offer preferential loans forbusinesses to convert old electrical equipment to new machines, as well aspromoting the use of renewable energy resources, he said.
Many businesses want to use clean energy but fora large factory, the investment cost for clean energy could be as high as 10billion VND, or even 30 billion VND. Facing difficulties in production,businesses are already struggling to get credit or attract investment.
Quoc said businesses will have to increase theprice of products due to higher production costs. If tra fishconsumption is slow, meaning the products are stocked for longer, sellingprices will increase due to fees paid for warehouses.
Seafood processing enterprises also facepressure from increasing labour costs due to difficulties in finding workers,especially enterprises in Ho Chi Minh City and the Mekong Delta.
Many enterprises have increased salaries to about8-10 million VND per month, and even 14 million VND for experienced workers,but they still struggle with a shortage. Many workers have changed jobs becausethey said their incomes were unstable and the working environment washazardous.
Ho Quoc Luc, General Director of the Sao Ta FoodJoint Stock Company, a leading shrimp exporter, said the cost of feed in Vietnamis higher compared to other countries. The production cost for one kilo ofshrimp in Vietnam is about 1 USD higher than in neighbouring countries.
Additionally, the cost of antibiotics has putpressure on the domestic shrimp industry.
Le Van Quang, Chairman and General Director ofthe Minh Phu Seafood Corporation, said the cost of antibiotics is about 6,000 VNDper kilo of raw shrimp, pushing up prices and harming competitiveness.
The price of raw shrimp is also a big challengefor many seafood processing enterprises, reported the Thoi bao kinhdoanh newspaper.
The supply of aquatic materials is unstable dueto reductions in fishery resources and severe weather. Farmers are raisingaquatic products on a small scale, with low capacity.
Vietnam has imported a large volume of feed,shrimp seed, fish fingerling and other material for aquatic production.
Therefore, large seafood producers have activelydeveloped large-scale material regions with high capacities to reduceproduction costs and control quality and hygiene.
Minh Phu has developed a high-tech, large-scaleshrimp farm to increase supply of shrimp each year.
The Sao Ta Food Joint Stock Company last yearinvested in 40 extra hectares of ponds to rear shrimp.
Vinh Hoan JSC this year will expand its tra fishfarming area by 220ha to increase its supply by 40 percent against last year.Processing capacity will also increase from 850 tonnes of raw materials per dayat present to 1,130 tonnes in the next two years.
Nam Viet Joint Stock Company earlier this yearstarted construction on a high-tech tra fish farming regionwith an area of 600ha and total investment of 4 trillion VND in An Giang province.This region will help the company meet its target of raising processingcapacity from 600 tonnes of raw materials per day to 1,100 tonnes.-VNS/VNA
The average retail price for power increased8.36 percent last week, according to the Ministry of Industry and Trade (MoIT).
The hike means that electricity bills have risenfrom 1,720 VND (7.49 US cents) per kWh to 1,864 VND (8.03 cents), excludingVAT.
Power tariffs for businesses and industrialzones are now divided into two levels: 3,076 VND per kWh for peak hours and 970VND per kWh for off-peak hours.
Duong Nghia Quoc, Chairman of the VietnamPangasius Association, said the increase in power prices has worried tra fishproducers because rising input costs will impact production and selling prices.
Quoc was quoted by the Nong thon ngaynay newspaper as saying that at present, electricity consumption forfarming and processing of aquatic products as well as operation of aquatic feedfactories is significant. Competition at home and abroad is also becomingincreasingly fierce.
For instance, a tra fish(pangasius) processing factory with medium capacity in Dong Thap provinceusually pays 10 billion VND for electricity each month. With the latestincrease in power prices, factories will be paying many times more.
Freezers and air conditioning systems at seafoodprocessing enterprises, especially factories processing seafood products forexport, accounts for over 85 percent of total power consumption, he said.
The tra fish industry hassuggested that the electricity sector should consider and adopt reasonablepolicies to create favorable conditions for production, especially in theagricultural and fishery sectors.
Electricity prices should increase according toa schedule with an initial surge rate of 3-4 percent, followed by suitablechanges. An immediate price increase of 8.36 percent is a shock to enterprises,according to Quoc.
The State should offer preferential loans forbusinesses to convert old electrical equipment to new machines, as well aspromoting the use of renewable energy resources, he said.
Many businesses want to use clean energy but fora large factory, the investment cost for clean energy could be as high as 10billion VND, or even 30 billion VND. Facing difficulties in production,businesses are already struggling to get credit or attract investment.
Quoc said businesses will have to increase theprice of products due to higher production costs. If tra fishconsumption is slow, meaning the products are stocked for longer, sellingprices will increase due to fees paid for warehouses.
Seafood processing enterprises also facepressure from increasing labour costs due to difficulties in finding workers,especially enterprises in Ho Chi Minh City and the Mekong Delta.
Many enterprises have increased salaries to about8-10 million VND per month, and even 14 million VND for experienced workers,but they still struggle with a shortage. Many workers have changed jobs becausethey said their incomes were unstable and the working environment washazardous.
Ho Quoc Luc, General Director of the Sao Ta FoodJoint Stock Company, a leading shrimp exporter, said the cost of feed in Vietnamis higher compared to other countries. The production cost for one kilo ofshrimp in Vietnam is about 1 USD higher than in neighbouring countries.
Additionally, the cost of antibiotics has putpressure on the domestic shrimp industry.
Le Van Quang, Chairman and General Director ofthe Minh Phu Seafood Corporation, said the cost of antibiotics is about 6,000 VNDper kilo of raw shrimp, pushing up prices and harming competitiveness.
The price of raw shrimp is also a big challengefor many seafood processing enterprises, reported the Thoi bao kinhdoanh newspaper.
The supply of aquatic materials is unstable dueto reductions in fishery resources and severe weather. Farmers are raisingaquatic products on a small scale, with low capacity.
Vietnam has imported a large volume of feed,shrimp seed, fish fingerling and other material for aquatic production.
Therefore, large seafood producers have activelydeveloped large-scale material regions with high capacities to reduceproduction costs and control quality and hygiene.
Minh Phu has developed a high-tech, large-scaleshrimp farm to increase supply of shrimp each year.
The Sao Ta Food Joint Stock Company last yearinvested in 40 extra hectares of ponds to rear shrimp.
Vinh Hoan JSC this year will expand its tra fishfarming area by 220ha to increase its supply by 40 percent against last year.Processing capacity will also increase from 850 tonnes of raw materials per dayat present to 1,130 tonnes in the next two years.
Nam Viet Joint Stock Company earlier this yearstarted construction on a high-tech tra fish farming regionwith an area of 600ha and total investment of 4 trillion VND in An Giang province.This region will help the company meet its target of raising processingcapacity from 600 tonnes of raw materials per day to 1,100 tonnes.-VNS/VNA
VNA
