Shrimp processed at a factory in Quang Ninh province. The high inflation in many key import markets had left Vietnamese producers with no choice but to seek customers elsewhere. (Photo: VNA) Ho Quoc Luc,Chairman of Sao Ta Foods JSC, revealed that his company had had ahard time dealing with falling revenues and mounting costs.
The fallingrevenues came from the fact that high inflation in the US and EUhas sapped consumption, leading to fewer orders from abroad.
The depreciationof the euro against theVietnamese dong, and the mountingtransport costs in major importing countries fuelled the situation, addingto its bills.
Amid theunfavourable conditions, the company has doubled down on processed seafood totarget high-end markets to make up for its reduced earnings, andsucceeded.
He saidJapan was its alternative market that has an appetite forextensively-processed shrimp, in terms of which Vietnamese companies have ahuge competitive advantage over Ecuadorian and Indian rivals.
Thanks toits change in customer base, the company has managed to maintain sales andturn the low transport costs in the market to its advantage. In fact,Japan has become its largest importer in the past two years.
Truong DinhHoe, General Secretary of the Vietnam Association of Seafood Exporters andProducers (VASEP), estimated total Vietnamese shrimp exports in 2022 at 4.3billion USD, up 10% year-by-year.
He said freetrade agreements (FTA), including CPTPP and EVFTA, were one factor thathas helped Vietnamese shrimp producers to pull off such a high figurein difficult times.
Theagreement put Vietnamese shrimp at a tariff advantage over those fromnon-FTA countries and allowed the seafood to enter foreign markets more easily.Specifically, Vietnamese shrimp exports to Canada, Mexico, and Australia roseby 30% on the back of the trade deals.
Perseverancewas another factor. Hoe said Vietnamese shrimp producers kept shrimp farms upeven at the peak time of the pandemic. This risky move has kept output stableand enabled faster post-pandemic production recovery.
"Onelesson learned from the pandemic: perseverance is the key to recovery.Thanks to their perseverance, shrimp producers took less time to recoverthan those operating in other industries," said Hoe.
Le Hang,communication director of VASEP, shared Hoe's view, saying the FTA was a major factorthat was helping Vietnamese seafood exports sustain the momentum in 2022.
Remarkably,Vietnamese seafood exports to CPTPP countries went up 315 during the year,raking in 2.9 billion USD. She said FTA-induced tariff advantages had been fullyexploited to boost sales, filling the gap left by the weakeningdemand in other countries.
The directorbelieved that FTA countries, especially ASEAN and China, would remain thebest alternatives for inflation-ravaged importers in 2023.
"Chinais expected to ease the 'Zero COVID' policy in the short term, unlocking amarket of 1.5 billion potential customers to Vietnamese seafoodproducers," said Hang.
With such agreat opportunity in sight, she urged the producers to stockpile raw materialsand mobilise capital to get the upper hand once the country is fullyopened./.
VNA
