May 18, 2012

Vietnamese seafood exporters' operation shut down in January-April

In the first four months of this year, about 300 Vietnamese seafood export processing companies halted operations, said the Vietnam Association of Seafood Exporters and Producers (VASEP).

The situation caused the number of local seafood exporters to fall to 500 units at the moment from 800 late 2011, the association said.

About 30% of local seafood firms threatened to suspend their operation due to lack of financial resources and material shortages, the association said.

High production costs and bureaucracy have made Vietnamese seafood products uncompetitive in the global market, the VASEP noted.

Over 90% of seafood businesses need to get VND10-500 billion (US$480,00-24 million) loans during the second quarter of this year, according to the Vietnam Association of Seafood Exporters and Processors (VASEP).

Due to lack of capital, dozens of companies in Ho Chi Minh City, Can Tho and other Mekong Delta provinces are operating at one-third of their capacity. A case in point is Hai Kim Seafood Ltd Company whose president Nguyen Huu Binh, claims to have gained no access to bank loans for years. He warns that thousands of workers are at the risks losing their jobs sooner and later.

Duong Nghia Quoc, Director of the Dong Thap provincial Department of Agriculture and Rural Development, and President of the provincial association of seafood exporters and processors, says the province is sparing no effort to help businesses access bank loans. However, some businesses fail to meet basic requirements.

The State's decision to lower the ceiling interest rate to less than 15% in early May and the Government's Resolution No13 to reduce loan rates are focused on the agriculture and rural development sector as well as small-and medium-sized enterprises and businesses involved in export and support industry areas.

Despite difficulties, Vietnam earned US$1.9 billion from seafood exports in January-April, up 16.4% on year, said the Ministry of Industry and Trade.

Seafood is one of Vietnamese export staples. In 2012, the country targets to have export revenues of US$6.6 billion from seafood versus US$6.3 billion in 2011.