Seafood firms yet to hook bumper deals

“Our company  saw a 50 per cent on-year drop in order placements in the first quarter of the year,” said Ut Xi Aquatic Products Processing Joint Stock Company general director Nguyen Tuan Anh.

In the domestic market, dwindling consumption in local and export markets and firms’ slowing capital circulation has made banks tighten the purse strings.

“Besides, banks’ lending procedures have become increasingly stringent,” said Ca Mau Seafood Joint Stock Company director Bui Nguyen Khanh.

In fact, seafood exporters are facing mounting pressures from banks and material suppliers after farmers filled a lawsuit against a leading seafood firm in the Mekong Delta Binh An Seafood Company. By mid-March, Binh An reportedly owed farmers and banks VND1,000 billion ($47.6 million) whereas its general director had left Vietnam due to health problems.

This has put the seafood sector’s proposed $6.5 billion export value in 2012 out of reach.

“Even retaining 2011’s export value of $6.1 billion will prove a big challenge to the seafood sector in 2012,” said Ut Xi Company director Tuan Anh.

“Tra and basa fish are key products of Vietnam’s seafood sector. However, scores of farmers left their ponds empty, making firms to incur material scarcity whereas shrimp areas reduced remarkably in the past two years owning to epidemic outbreaks,”  Anh added.

After the notorious Binh An case, not only banks but also material suppliers have reportedly taken a more prudent approach towards businesses.

General secretary of Vietnam Association of Seafood Exporters and Producers Truong Dinh Hoe said: “Firms are trying to surpass this tough period, but it is unfair if banks stop lending to other seafood businesses.”  

General Department of Customs figures show that Vietnam reaped $422 million from seafood exports in February 2012, up 16.4 per cent against January 2012, bringing total seafood export value to $775 million in the first two months of the year, surging 14.5 per cent on-year, but it was only 12 per cent of the year’s projection.