April 20, 2012

Vietnam's tra fish traders get US$96 million financial support

A financial support worth VND2 trillion (US$96 million) will be given to the troubled tra fish trading companies by the Vietnam Association of Seafood Exporters and Producers (VASEP) in cooperation with the Ministry of Agriculture and the central bank.

While export achieves satisfactory outcomes, local tra fish enterprises are mired in difficulties with material source and capital shortages.

Tra fish exports brought in over US$420 million in the first quarter, rising 15% on-year, said Truong Dinh Hoe, General Secretary of VASEP.

Sales of Vietnamese tra fish to the American markets such as Brazil, Chile, the US, and Mexico grew strongly at 150%, 125%, 40% and 26% respectively. Tra fish exports to this region alone is predicted to fetch US$200 million this year, while the export values of the entire industry will reach US$1.8 billion, according to VASEP.

"Other markets maintained stable growth, so I think the export target of US$2 billion this year is attainable," said Hoe at a review conference on tra fish export in the first quarter held in HCMC on April 17 by VASEP.

VASEP vice chairman Duong Ngoc Minh noted: "As the global economy runs into more problems, tra fish have become more popular to consumers in the world for its cheaper prices and better quality than other fish of the same type. Now is the time for Vietnamese tra fish."

However, he said, the target could only be achieved when financing sources are available to enterprises.

"If banks continue to tighten credits, multiple tra fish companies will likely go bust in the third quarter," Minh stressed.

Difficult access to bank loans has forced tra fish enterprises to scale down their production or operate perfunctorily. Tra fish trading used to be described as potential, but is now deemed a risky investment field. As lenders are restricting lending to seafood enterprises, traders lack funds to purchase material fish. Enterprises mainly used the material inventories carried forward from last year to process and export in the first quarter.

Due to severe capital shortage, over 50% of the tra fish processing factories have halted operations or operated perfunctorily, leading to the suspension of 40% of the aquaculture feed processing plants and multiple investment projects.