Seafood companies hope to sell more at home as pandemic hits exports

  • 29.06.2020, 08:16,
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Seafood companies hope to sell more at home as pandemic hits exports
Tra exports fell 39.1 per cent year- on- year in the first five months to $456 million, and that included decreases of 48 per cent to the Chinese market, 47.3 per cent to the EU and 19.8 per cent to the US.— VNA/VNS Photo

Vietnamese seafood companies export their products to hundreds of countries and territories around the world but are unable to sell them at home.

Tra (pangasius) fish is one of Viet Nam’s main fisheries exports, shipped as it is to 119 markets and fetching billions of dollars in sales annually. Last year they were worth over US$2 billion.

But this year exports of fisheries products, including tra, have declined sharply due to the Covid-19 pandemic.

Tra exports fell 39.1 per cent year- on- year in the first five months to $456 million, and that included decreases of 48 per cent to the Chinese market, 47.3 per cent to the EU and 19.8 per cent to the US.

Many fisheries exporters have suffered big losses and overdue bank debts.

In the event, many want to sell in the domestic market as they eye a 100-million population and demand that matches any of the country’s traditional export markets.

According to the Agricultural Product Processing and Market Development Department, the domestic market annually consumes fisheries products worth more than VND22 trillion (almost $1billion).

Tran Van Hung, director of Hung Ca Company Ltd in the southern province of Dong Thap, said, “If I can push up sales of seafood in the domestic market now it will enable me to sustain the company’s operations and stabilise cash flows.”

Vo Hung Dung, vice chairman of the Viet Nam Pangasius Association, said turning to the domestic market is the right choice for many exporters, including that of seafood, since the pandemic shows no signs of ending globally.

He expected the market’s consumption of tra fish to rise to 10-15 per cent of the country’s total production from the current minuscule rate.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong once said that exploiting the domestic market would help Vietnamese firms achieve double targets.

It would ease the pressure to export, translating into opportunities for companies to increase their export prices, he said.

Yet, many other Vietnamese fisheries products have not found a firm foothold in the domestic market.

Analysts blamed this on several factors including a lack of distribution networks and sales points.

Pham Minh Thien, general director of Co May Joint Stock Company, said his company exports tra products to 40 countries and territories, earning nearly VND1 trillion a year, but is not able to enter domestic distribution networks including supermarket chains and traditional markets.

Shrimp exporters too want to enter the domestic market and are seeking ways to improve distribution.

They said due to the lack of distribution networks, restaurants and hotels that want to buy fisheries products, including tra fish and shrimp, have to source them directly from fish farms and are thus forced to buy much larger volumes that they need.

Because of this, many are wary of buying and use other alternatives, and demand for seafood is hit.

Analysts said seafood companies should give top priority to establishing distribution channels and linking up with existing ones like markets and supermarkets and to creating new lines of products that appeal to Vietnamese consumers.

They also stressed the need for the companies to gain consumers’ confidence by providing them clear information on the breeding process and quality.

Nguyen Quoc Tuan, head of the Agricultural Product Processing and Market Development Department, said to sell at home the fisheries sector needs to focus on increasing processing to increase value addition and diversity of products, and on food safety.

Banks eye capital hike despite low profits

At its annual general meeting in mid-June Sai Gon-Ha Noi Joint Stock Commercial Bank (SHB) shareholders approved a plan to increase the capital by VND1.755 trillion to VND19.3 trillion (US$832 million) this year.

The lender will issue bonus shares at a rate of 10 per cent in the third or fourth quarter of this year instead of cash dividends. Every shareholder will thus receive one share for every 10 they own.

The Asia Joint Stock Commercial Bank (ACB) AGM took place on June 16 with its shareholders also approving payment of dividends in shares at a rate of 30 per cent.

ACB will issue nearly 499 million new shares before year-end, increasing its charter capital by VND5 trillion.

LienVietPostBank, MBBank and Techcombank also plan to hike their capital this year.

Banks will not only issue bonus shares for this but also hope to sell stakes or subsidiaries to foreign investors.

Vietnam Maritime Commercial Joint Stock Bank said it is waiting for the State Bank of Viet Nam’s permission to sell shares to foreign investors.

Sai Gon-Ha Noi Joint Stock Commercial Bank’s chairman Do Quang Hieu said a foreign investor has been identified to sell SHB Finance.

ACB and HDBank also plan to issue bonds in the international market in tranches. The latter’s board has already submitted a plan to issue up to US$1 billion worth of bonds between now and 2024.

Some lenders admitted that increasing their capital amid falling profits due to the pandemic would not be an easy task, but it would enable them to improve their liquidity to better cope with risks caused by the crisis.

Analysts concurred with this, saying that amid the unpredictable situation caused by the pandemic banks with large equity have a better chance of coping with any crisis.

It will help improve their risk management capability, size of operations and competitiveness.

This year the central bank has approved banks’decision to pay dividends in stock instead of cash.

Another important reason is that increasing capital will help lenders ensure liquidity for credit growth under the SBV’s Circular 22.

The circular, issued last November, stipulates limits and prudential ratios for banks. It sets a roadmap to reduce the use of short-term deposits for medium- and long-term loans from the current 40 per cent to 35 per cent on October 1, 2021, and to 30 per cent on October 1, 2022. — VNS

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