Although seafood producers set record profits, they have to face mounting challenges

Thanks to the favorable export market, many seafood producers posted record profits in the second quarter of this year. However, mounting hardships linger in the remainder of the year.


Source: VNA


Vinh Hoan Corporation (VHC), one of the top producers and exporters of basa fish in the country, setting a record since the company came on the bourse in the fourth quarter of 2007. This company raked in more than $34.2 million in the second quarter of this year, triple compared to one year ago.


This means VHC has fulfilled nearly 84 percent of the year's profit plan just after six months.

Next then was Sao Ta Food JSC counted more than $5.13 million in post-tax profit in Q2, showing a 30 percent jump on year. The seafood sector reaped $6.7 billion in total export value in the first seven months, showing a 35 percent jump on year.


IDI Development and Investment Corporation reaped nearly $100 million in Q2, up 8.5-fold on year, reaching its highest profit level since its first disclosure of information to the public in the first quarter of 2010. Noticeably, Nam Viet JSC saw its post-tax profit soaring 10-fold to exceed $104.3 million in Q2, setting a record since the first quarter of 2019.


Minh Phu Seafood Corporation deemed Vietnam’s largest shrimp exporter, earned more than $8.52 million in post-tax profit during the period, up 2.5-fold on year based on the parent company’s separate financial report. The producers have attributed their accelerated profits to high export prices and favorable export business.


Domestically, in early August the price of pangasius fish picked up 30 percent compared to one year ago, and the price of white shrimp was pegged at about $10 per kg, much higher compared to one year ago.


In the export market, in the first seven months of this year, the seafood sector reaped $6.7 billion in total export value, equal to a 35 percent jump on year. Of which, exports of pangasius fish brought in $1.62 billion, equal to a 78.8 percent jump on year.

Despite such impressive business results, industry experts assumed that mounting hardships await seafood businesses in the months ahead. According to VASEP, rising production costs increased the prices of many seafood items, thus lowering the products’ competitiveness.


At a meeting of the prime minister with the business community on August 11, Nguyen Hoai Nam, vice secretary of the Vietnam Association of Seafood Exporters and Procedures (VASEP), noted that escalating inflation in many countries has moved their residents to reduce consumption. Consequently, many importers reported not receiving further orders until October.


About a 20 percent hike in aquatic feed price post-pandemic has significantly pushed up the production cost as the aquatic feed price for pangasius fish and shrimp accounts for about 65-70 percent of the production cost.


Source: Vietnam Investment Review