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Seafood companies in desperate straits   2008-11-26 - Tien phong

Vietnamese seafood companies have been weeping bitterly as foreign importers have reduced orders, asked them to lower prices and have been slow in making payments.


Processing workshops running perfunctorily


Vietnamese seafood companies have been in desperate straits as foreign importers have reduced orders

In Tac Cau fishing port industrial zone in Chau Thanh district in Kien Giang province, two seafood processing companies are reportedly selling their workshops. Bao Vinh Company is asking for $2mil and Hai Minh is offering its workshop for $2.5mil.


Mai Thanh Dao, Deputy Director of Tac Cau Seafood Joint-stock Company, said that previously, his company exported 400-500 tonnes of grilled fish pie a month, while it exports just 100-200 tonnes now. At least 2/3 of grilled fish pie producers in the south have temporarily closed their doors. Some workshops have reported big stocks of 4,000 tonnes of fried fish rolls.


Cao Huong Thien, Director of Mai Sao Company, related that the company’s workers were working day and night this time last year to fulfill orders placed by foreign partners for Christmas and New Year. Meanwhile, the company is now working perfunctorily as there are very few orders.


Thien also said that the euro, yen and won have been devaluating in the main export markets of Europe, Japan and South Korea, causing losses for Vietnamese seafood enterprises. The ‘sorrow’ of these companies has been magnified by the lack of punctuality of foreign partners in making payments.


In Can Tho city, Phan Nhu Khanh, Deputy Director of Hiep Thanh Seafood Company, specialising in exporting tra fish in Tra Noc Industrial Zone, complained that exports to Russia, Ukraine and the EU have been decreasing sharply due to decreased demand. Loyal partners not only have cut orders, but have also become difficult-to-please.


“We are making products to fulfill some contracts in November and December, but we don’t have any contracts for next year. We are considering cutting output by 40-50%,” he said.


Phan Ba Tong, Director of Thien Ma Company, specialising in making tra fish products for export in Tra Noc Industrial Zone, said that his company has cut productivity by 30%, and is considering cutting it further. The company’s new production line, which it invested tens of billion VND in, will be idle.


In the industrial zone gathering seafood companies in Ca Mau city, enterprises have been working perfunctorily because of lack of materials.


Ngo Thanh Linh, Deputy Head of the Processing Management and Trade Promotion Division under the Ca Mau provincial Department for Agriculture and Rural Development, said that the seafood workshops in the province have been working at just 57% capacity.


The ‘shrimp mine’ of Ca Mau yields 120,000 tonnes a year, while 38 seafood processing workshops now have the designed capacity of 250,000 tonnes.


Difficulties from exchange rate fluctuations


Phan Ba Tong, Director of Thien Ma Company in Tra Noc Industrial Zone, said that some foreign partners have refused to import products because the dollar in their countries has increased by 20-30% in value. For example, in Mexico, one dollar is now converted to 13 pesos, up by 2.5 pesos; in Malaysia, one dollar is now equal to 3.6 ringit, up by 0.4 ringit. This has led Mexico and Malaysia to virtually close their doors to Vietnamese tra fish.


Thien from Mai Sao Company also complained that interest rates prove to be overly high for small- and medium-size enterprises. He said that other countries all have specific policies for these enterprises, while small-scale Vietnamese enterprises have to ‘swim themselves’ through the global financial crisis.


Workers sitting idle


Workers are frequently found sitting chatting with each other in restaurants and cafés around seafood processing workshops in Ca Mau city these days. Nguyen Thi Bay, who has been working for Minh Phu Seafood Processing and Export Company, said that the shrimp material shortage has never been as serious as this year. She said workers have been weeping because of no work due to the shrimp shortage and because of skyrocketing commodity prices.


Thai Thi Loan, a worker, related that her wages were VND2.7mil in October, and VND2mil in November.


Nguyen Thi Tuyet, General Director of Camimex Company, admitted that over 1,500 workers of the company have had lower incomes the last few months, while Thien said his workers’ incomes had dropped from VND1.8mil/person/month on average to VND1.5mil/person.

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