Accounting for about 5% of the world’s shrimp market share and 19% of Vietnam’s shrimp export turnover, Minh Phu Seafood Corporation is the country’s biggest exporter of the product. With 20% of its export turnover entering the EU market, Minh Phu is expecting to benefit significantly from the EU-Vietnam Free Trade Agreement (EVFTA).
|Workers process frog for export to the EU at a factory in the southern province of Long An (Photo: VNA)
“We hope that the EVFTA coming into effect soon will help us reach the target of consolidated export turnover of US$709 million with 63,000 tonnes of shrimp in 2020,” Le Van Diep, deputy general director of Minh Phu, told Vietnam Investment Review (VIR).
Over the years, the EU has always been a highly demanding market for Minh Phu. “Under the deal, the requirements of origin and sustainable elements will be very high. Therefore, since late last year, we have invested more in technology in order to offer more products which answer the demand,” Diep said.
The technology that Diep refers to is called “2, 3, 4 technology” – meaning two feeding periods, three harvesting periods, and four principles of shrimp breeding namely no disease, no antibiotics, clean water, and an isolated feeding environment.
“The technology helps us to exploit the feeding area with the highest productivity while protecting the environment, ensuring Vietnamese-made shrimp of the highest quality the European market,” Diep added. “This technology has also been applied for both the groups’ feeding facilities and those of farmers that we co-operate with. We aim to increase self-provided material from 20 to 50%.”
Meanwhile, shrimp producer Viet Uc Seafood Corporation has also paid more attention to sustainability. “We are striving to build the trademark of Vietnamese shrimp by using advanced technologies of automatic feeding, membrane technology, automatic measurement, and sustainable inventions such as a biofloc farming process, biological culturing process, and circulating water treatment,” Luong Thanh Van, president and chief executive officer, told VIR.
According to Van, Viet Uc will indirectly benefit from the EVFTA when the demand of Vietnamese-originated shrimp increases.
“The EVFTA creates advantages for Vietnam’s seafood to compete with its rivals. To welcome the chance of better supply, since the middle of 2019 we have built two new shrimp seedling facilities in the northeastern province of Quang Ninh and the Mekong Delta province of Soc Trang, raising the number of our facilities of this type to nine nationwide, with a capacity of 50 billion breeding shrimps,” Van said.
Besides the two facilities, Viet Uc also boasts three feeding facilities, providing 25,000-30,000 tonnes of shrimp feed to serve both domestic and export demand. Particularly, the corporation has just invested millions of US dollars in 104 hectares of catfish hatching using high technology. “We are one of four companies joining in the three-level catfish hatching chain implemented in the Mekong Delta province of An Giang, aiming to improve the quality of breeders,” Van added.
An Giang has 1,530ha of farming with a productivity of nearly 441,000 tonnes per year. To recover the industry after COVID-19 and get ready for the EVFTA, the province has called for investment in the sustainable farming of catfish using high technology.
Among the companies responding to the province’s call, Nam Viet Corporation (Navico) has also spent VND4 trillion (US$173.9 million) on 600ha of catfish farm. “Our entire catfish farm uses modern equipment, nano-aeration technology, and a bakture catalyst for water treatment. With this technology, our farm does not discharge waste water into the environment, and does not need to dredge sediment via physical methods,” said Le Doan Toi, general director of Navico. “We hope that this will be a good foundation for us to benefit from the EVFTA.”
Currently, the EU market has been steadily reopening after coronavirus lockdowns. The EVFTA promises to bring Vietnam’s seafood companies good prospects, particularly when their rivals from India, Ecuador, and Indonesia are still suffering from supply chain disruption due to the pandemic.
“To grasp the chance, enterprises need to be honest with the rules of origin of the agreement. Along with finding and developing local raw materials and from FTA partners, businesses need to attract foreign investment and improve production technology and product quality, as well as join the regional supply chain,” said Nguyen Hoai Nam, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP).
According to Nam, the EVFTA also requires an active fight against illegal, unreported, and unregulated fishing. “This is an urgent and important task for Vietnam to ensure compliance with the terms in the EVFTA,” he explained.
The data from the VASEP shows that the EU is the second-biggest import market of Vietnam’s seafood, accounting for 18% of Vietnam’s total seafood export turnover, in which shrimp holds 22 % and catfish accounts for 11%.
When the EVFTA comes into effect this year, about 50% of assorted tariffs for aquatic products will be removed, while the rest will be omitted within three to seven years.
Meanwhile, Bui Kim Thuy, country representative for Vietnam at the US-ASEAN Business Council told VIR, “The EVFTA is a wide gate to Vietnam’s seafood sector while some rivals in the EU market have not made any FTAs with the bloc. Moreover, producers are still able to keep the initial origin for a good batch exported to many different countries in the region.”