Mr. Truong Huu Thong, Director of Thong Thuan Co., Ltd., said that right after the pandemic, the war hit the world economy severely, especially the European, Japanese and American markets. For Thong Thuan, these three markets account for more than 90% of the market share; however, they are all seriously affected by inflation, high Fed interest rates and tight monetary policies of Europe and the US.
In 2023, exports declined, especially export orders of Thong Thuan are being reduced by more than 20% compared to 2022, but the company still maintains jobs for officials, employees and cash flow.
In detail, Thong Thuan innovates selling methods, saves and cuts costs, and implements a suitable shrimp farming plan with lower expenses. In the current economic context, other industries such as leather and footwear, textiles, and furniture have all decreased deeply. However, seafood is still an essential commodity, so there is still a more positive trend. In this year's conditions, businesses must be flexible and more adaptable to find solutions to cope with difficulties. The production situation and the number of employees of the company are still stable, maintaining export orders because the company has switched to value-added goods.
As one of the leading enterprises in exporting pangasius, in the first five months of 2023, Vinh Hoan's pangasius exports decreased quite deeply, including to traditional markets. Ms. Truong Thi Le Khanh, Chairman of Vinh Hoan Joint Stock Company, said that pangasius exporters had expanded their export markets to more than 140 countries.

However, according to Ms. Khanh, the pangasius processing industry still uses many unskilled workers, which will be a challenge in the future. Therefore, the use of machinery and technology in production to reduce labour-intensive stages will enable the industry to overcome this danger. The pangasius industry needs to invest in technology to meet increasingly strict requirements on the environment and social security. Moreover, a flexible and open mechanism and the determination of the State are also necessary factors to encourage enterprises to accelerate the implementation of export development programs for deeply processed products.
Mr. Doan Van Dong, Director of Can Tho Seafood Import-Export Co., Ltd. predicted that the difficult situation in 2023 might last until the end of 2024. Therefore, businesses must find a way to survive, and identify challenges, difficulties, and specific situations to overcome.
Therefore, instead of expanding products, they now only focus on the current orders and invest deeper in product quality and lower production costs. Value-added products from Vietnam's shrimp are saturated. Therefore, businesses should focus on existing products, focus on improving quality, packaging and designs, not expand markets and new customers, focus on keeping existing and traditional customers, improve with more modern machinery and factories, take care of workers, increase wages to keep skilled workers, ensure stable labour, improve skills, and strive to stabilize production through this period.

Market restructuring

Facing difficulties caused by declining orders in key markets, Vietnamese seafood enterprises are innovating products, promoting trade, and restructuring markets.
According to Mr. Pham Hoang Viet, General Director of Sao Ta Food Joint Stock Company (FIMEX VN), to compensate for the decline in large markets such as the US and EU, many businesses have had to shift their exports to other markets such as Japanese market with a little amount of inventory, and there is room for the purchasing power.
However, due to inflation, consumption is also limited because consumers tighten spending. Therefore, to penetrate this market, it is necessary to ensure stable supply, good quality and traceability.
It is expected that the market from now to the end of the year will be very gloomy. Purchasing power in the US market will remain low because of large inventories which asks businesses to search for more new markets.
“Small markets such as in Asia, such as Hong Kong, Taiwan, etc. have better purchasing power because there is no inventory, so they trade more often,” Mr. Viet assessed.
Mr. Tran Thien Hai, Chairman of the Board of Directors of Minh Hai Seafood Joint Stock Company (SEA MINH HAI), said currently, there are many new challenges facing Vietnam's shrimp industry. In the past, Vietnam owned the advantages of processing factories with well-equipped technology, high-processing skills, potential markets.
However, our competitors also shared the same strengths while we lacked experiences in the farming sector. Shrimp farming in Vietnam is still very fragmented, while it is the strength of surrounding countries such as India, Bangladesh or Ecuador. As a result, Vietnamese enterprises must thoroughly reconsider every relevant factor.
“If in the past, the role of the seafood processor was the focus in the value chain, now we should put the role of the farmer as the focus in the value chain,” emphasized Mr. Hai.
Mr. Le Van Quang, General Director of Minh Phu Group compared the cost of shrimp production among three competitors, Vietnam, Ecuador, and India, the cost of raising large-size shrimp of 50 fish/kg of Ecuador is only 2.2-2.4 USD/kg, India is 3.4-3.8 USD/kg while Vietnam is from 4.8-5.0 USD/kg. Especially, although the selling price of India and Ecuador is low, they are still profitable thanks to low production costs.
Faced with the above fact, Vietnamese processing enterprises have to manage to negotiate a reasonable price for raw shrimp with farmers because if the purchasing price is too low, farmers will no longer raise shrimp. On the other hand, enterprises must find ways to produce value-added and convenient goods to raise the selling price to make profits.
Mr. Vo Van Phuc, Chairman of the Board of Directors, General Director of Clean Vietnam Seafood Joint Stock Company, said that Vietnam's shrimp industry faces two challenges. First, the economy is shrinking due to the effects of inflation, which reduces consumption. Second, competition between countries is increasingly fierce, specifically for the supply of cheaper shrimp from India, Ecuador and Indonesia. The world crisis reveals no ending signals. Therefore, the consumption market will be difficult along with the strategic challenge of cheap shrimp supply. At the same time, oversupply makes the price of finished shrimp low, even lower than the price of raw materials.