Seafood processing industry: Not commensurate with potential!

(Baonghean) -It is considered a locality with favorable conditions for developing the aquatic economy, including a relatively high source of raw materials from exploitation and aquaculture, but due to the fragmented, small-scale, and backward aquatic processing industry, the product value is low. Although there has been attention with specific solutions, investment in aquatic processing technology in Nghe An province is still not commensurate...

Fish fillet processing facility of Mr. Nguyen Van Hung, Dien Ngoc commune, Dien Chau.

Regarding domestic processing, the province currently has 3 joint stock enterprises and nearly 10 private enterprises participating in processing with the main products being fish sauce, fish meal and various types of fish sauce. In the localities: Hoang Mai Town, Quynh Luu, Dien Chau, Cua Lo Town, there are also seafood processing villages and more than 100 cold storage facilities. Every year, these facilities supply the market with nearly 20 million liters of fish sauce, over 3,500 tons of fish meal and 6,500 tons of various types of fish sauce. It must be affirmed that these facilities have built product brands and have a certain position in the market, thereby increasing the value of the products. However, the products are still monotonous and of low value. The processing facilities rely mainly on their own strength without the State's attention and investment in capital to expand production and business.

For example, Quynh Luu district, a locality assessed to have sufficient conditions for the development of processing industry activities, is still very limited in reality. Mr. Ho Nghia Duong, Deputy Head of the Department of Industry and Trade of Quynh Luu district, said: Seafood processing activities in the district are not concentrated and are still fragmented. Most of the craft villages in the district are mainly from households, there are no enterprises to organize production and consume products, so the activities have not achieved high value. The main products are various types of steamed and dried fish, serving small-scale exports and domestic consumption. The processing of dried goods depends on the weather and is mostly done by hand. The monotonous products only stop at the raw material processing stage, so the product value is not high and is not competitive.

As for export processing, it is even more sluggish, as up to now, there has not been a single enterprise in the province that is strong enough to directly and officially export to foreign countries, not to mention strict markets like the EU and Japan. Currently, there are some private enterprises such as Phuong Mai in Quynh Di ward, Kim Lien in Quynh Phuong ward (Hoang Mai town)... that process products and then export them through unofficial channels to China, but because they only do preliminary processing, they are not highly competitive. Currently, Van Phan Seafood Joint Stock Company (Dien Ngoc, Dien Chau) has exported a quantity of fish sauce to the Malaysian and Lao markets. But the most notable is still Seafood Import-Export Joint Stock Company II (Cau Giat town, Quynh Luu). Despite difficult conditions, with only 450 million VND in operating capital, old factories and equipment... the company is still operating stably.

In 2013, the company processed 471 tons of raw materials, with revenue reaching nearly 90 billion VND, and foreign currency earnings reaching nearly 4.3 million USD. However, the company's processing activities are mainly outsourcing or exporting on consignment through companies in the South. Mr. Phan Dinh Duc, the company's director, said: Currently, the company is facing many difficulties such as low capital, having to borrow capital from outside to operate; outdated equipment but due to narrow business premises, it cannot expand. Furthermore, due to unstable supply of goods, the company's operations are facing many difficulties. And businesses that have just emerged from equitization like the company really need the attention and removal of difficulties from the province and related sectors.

In 2005, the province's seafood export turnover reached 16 million USD, but after 7 years, by 2012, this figure only increased to 19 million USD and by 2013 it was 21 million USD. Although, in recent years, the province has had certain solutions, the value of processed export products has increased slowly, not commensurate with its potential and advantages. In 2013, the province attracted the Thai Royol Foods Group to invest in building a canned fish processing factory for export with a total investment of 28 million USD, with a capacity of 100 tons/day in Nam Cam Industrial Park. However, since the groundbreaking date (October 2013) until now, the project is still just an empty land. Mr. Nguyen Viet Tri, Deputy Head of Finance and Planning Department (Department of Agriculture and Rural Development) assessed: Although the field of seafood processing technology has received attention from the Provincial Party Committee and Provincial People's Committee, the value of processed products for export is low, especially the value of direct exports. Most exporting enterprises are small-scale, lack capital, infrastructure in the processing planning area has not been invested, the scale of the factory and production area is too small. Along with that, the facilities, equipment, management level as well as market access are still weak.

Although the seafood processing industry plays an important role, bridging production with the market, thereby increasing export turnover, in recent years, state investment has been very limited. In particular, in-depth investment in export processing facilities is still slow and low. For example, at Seafood Import-Export Joint Stock Company II, the investment in upgrading the factory to ensure compliance with the Code for the EU market has not been completed yet. In recent years, investment in support for small and medium enterprises in the province has been too modest and has not created favorable conditions for these enterprises to borrow credit for production. The planning of concentrated processing zones in some localities is still overlapping and unscientific, so the implementation process in practice has encountered many difficulties. Mr. Nguyen Viet Tri added: The Provincial People's Committee needs to continue to create open mechanisms to attract investors and needs to allocate capital to focus strongly on the processing industry.

Implementing Conclusion No. 07-KL/TU dated May 14, 2012 of the Provincial Party Committee Standing Committee, the Provincial People's Committee has directed the Department of Agriculture to coordinate with departments and branches to develop the Nghe An Fisheries Economic Development Program for the period 2011-2015 and up to 2020. Accordingly, the target set for the seafood processing industry in terms of value is 23 million USD in 2014, 25 million USD in 2015, and 50 million USD in 2020. To achieve the above target, in the coming time, the province and related branches need to invest in supporting the development of offshore fishing vessels, invest in infrastructure for aquaculture, and breeds to increase stable raw material sources for processing; There is a mechanism to support enterprises in upgrading production conditions, innovating equipment technology, mechanization and promoting foreign investment in processing to improve production levels and access the world's modern processing industry. In addition, the province needs to build concentrated processing areas to encourage and attract organizations and individuals to participate in investment and development of processing to overcome the current fragmented production situation. In the context of limited budget, the province needs to increase the mobilization of preferential loans, capital from support programs and projects to develop the seafood processing industry more and more strongly in the coming time.

Pham Bang