ACHIEVEMENTS & CHALLENGES FOR THE VIETNAMESE SEAFOOD …

GLOBALIZATIONACHIEVEMENTS & CHALLENGES

FOR THE VIETNAMESESEAFOOD INDUSTRY

GLOBALIZATIONGLOBALIZATIONACHIEVEMENTS & CHALLENGES ACHIEVEMENTS & CHALLENGES

FOR THE VIETNAMESEFOR THE VIETNAMESESEAFOOD INDUSTRY SEAFOOD INDUSTRY

Dr. Nguyen Huu DzungVietnam Association of Seafood Exporters and Producers

(VASEP)

23 July 200823 July 2008 IIFET 2008 VietnamIIFET 2008 Vietnam 22

• World Seafood’s Trends• Vietnam: Achievements &

Challenges• Year 2020: the way to go

CONTENTS


• Supply:- Capture fisheries stagnated, no major increases expected- Aquaculture is the world fastest-growing food production

sector, but growth tempo declining- Developing countries produce more than 90% aquaculture

(China alone: 67% global production)

• Demand:- Slowly rising because population growth- Fish is required as the lowest-cost animal protein- Small underlying increase in per kaput consumption- Aquaculture takes 15% of global animal protein consumption - Aquaculture will cover more than half of food fish supply

Supply/Demand Trends


0

20

40

60

80

100

120

140

160

1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

AquacultureCatch

Millions of tonnes

FISHSTAT 2007

World World FishFish ProductionProduction 19501950--20072007

Catch

Aquaculture


World Fish Production 2005World Fish Production 2005--20072007

143141141Total

525048Aquaculture

919193Capture

200720062005Year

Unit: Million tonsUnit: Million tons

Resource: FAOResource: FAO


World Fish Utilization 1996 World Fish Utilization 1996 -- 20072007

0

20

40

60

80

100

120

140

160

1996 1998 2000 2002 2004 2006

OtherFEEDFOOD

Food uses

Feed


World Aquaculture Trend World Aquaculture Trend

0

20

40

60

80

100

1984

19851986

1987

19881989

1990

19911992

1993

19941995

1996

19971998

1999

20002001

2002

20032004

2005

Pro

duct

ion

Valu

e ( U

S$ b

il.)

Year

0

20

40

60

80

Prod

uctio

n Q

uant

ities

(mill

ion

tonn

es)World Volume

World Value

Source: FAO Source: FAO -- FishstatFishstat PlusPlus


Production by Main RegionsProduction by Main Regions

Source: FAO Source: FAO -- FishstatFishstat PlusPlus

0

10

20

30

40

50

60

70

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005Prod

uctio

n qu

antit

y (m

il. to

ns)

Year

China

Rest of Asia and the Pacific region

Rest of World


Aquaculture Development TrendsAquaculture Development Trends

• Intensification of production• Diversification of species• Diversification of farming systems/practices• Globalization of markets and consumer

requirements• More regulations and focus on governance

of the sector• Focus on better management


Aquaculture Main ProducersAquaculture Main Producers

ChinaIndiaVietNamIndonesiaThailandBangladeshJapanChileNorwayRest

China


• Seafood trade is growing faster than production- Seafood trade is growing 8 - 10% a year- Seafood export turnover is US$ 93 billions in 2007

• Role of seafood import for developed nations- Seafood import increased- Many countries heavily depend on import - 3 big markets took 73.5% in 2006: EU (42.7%), Japan (15.6%)

and US (15.2%) of total world seafood import (US$ 89 bill.)

• Role of seafood export for developing countries- Shares 50% of world seafood export- Seafood export revenues crucial for many countries- Provide livelihood, jobs for millions people in sector

World Seafood Trade Trends


0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

100,000,000

1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006

Developing countriesor areasDeveloped countriesor areas

World Fish Export Value 1976World Fish Export Value 1976--20062006(in 1000 US$)(in 1000 US$)

developing

developed


EU (25)25% Indonesia

2%

Taiwan of China2 %

China10%

Norway6%

USA5%

Canada4%

Viet Nam4%

Chile3%

Thailand6%

Major Seafood Exporters 2006 Major Seafood Exporters 2006 (in value)(in value)


Future Fish Prices TrendsFuture Fish Prices Trends

• Wild caught fish prices slightly higher but not much

• Farmed fish prices will be declining • Price cycles in commodity markets • Profitability through product development,

technological innovation and cost reduction

0.02.04.06.08.0

10.012.014.016.018.0

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

Per c

aput

sup

ply

(kg) From

capturefisheries

Fromaquaculture

capture

aquaculture

2005 2015 2030

Aquaculture Future in Fish DemandAquaculture Future in Fish DemandAquaculture Future in Fish Demand


Sustainability ImprovementSustainability Improvement• Reduced reliance on fishmeal in feed • Efficiency in feed formulation• Food conversion ratio (FCR) reduced• Containment and recycling of waste• Increased land and water use efficiency• Improvement to health management• Reduction of chemical and veterinary drug use• Domestication, genetic improvements and better

biodiversityBut challenges remain


VIETNAM SEAFOOD INDUSTRY

Achievements & Challenges


Vietnam Seafood at a GlanceVietnam Seafood at a Glance• Land area: 329,560 sq. km.• Coast line: 3,260 km (excluding islands)• Exclusive Economic Zones: 1 million sq. km• Total Production of Fishery and

Aquaculture (2007): 4.160 million tons• Value of Export (2007): US$ 3.762 billions • Labour force: 4 millions• Contribution of Agriculture to GDP: 23,6%• Fishery and aquaculture is an important

economic sector of the country• Seafood is the 4th biggest national export

item (after crude oil, garment and foot wear)


Vietnam in Global Vietnam in Global scalescale in 2007 in 2007 •• Farmed Farmed PangasiusPangasius 1.0 million MT 1.0 million MT -- Nr 1 in the worldNr 1 in the world•• Aquaculture annual growth 23.9% Aquaculture annual growth 23.9% -- Nr 1 in the world (?)Nr 1 in the world (?)•• Export an. growth in 10 Export an. growth in 10 ysys 19,4% 19,4% -- Nr 1 in the world (?)Nr 1 in the world (?)•• Aquaculture production 2.10 mill. MT Aquaculture production 2.10 mill. MT -- Nr 3 in the worldNr 3 in the world•• Farmed shrimp 355,000 MT Farmed shrimp 355,000 MT -- Nr 3 in the worldNr 3 in the world•• EUEU--coded factory 269/520coded factory 269/520 -- Nr 5 in the world (?)Nr 5 in the world (?)•• Export revenue US$ 3.762 billion Export revenue US$ 3.762 billion –– Nr 5 in the world (?)Nr 5 in the world (?)•• Export to 145 countries Export to 145 countries –– Nr 7 in the world (?)Nr 7 in the world (?)•• Total production 4.1 mill. MT Total production 4.1 mill. MT -- Nr. 9 in the world (?)Nr. 9 in the world (?)


Total Fish ProductionTotal Fish Production

4,160

1.344 1.3381.570 1.669

1.8282.003

2.4352.648

2.8593.074

3.4323.696

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

1,000 MT

Wild catch Aquaculture


%

Seafood Export Value

368 456 550 670 780 817971

1,478

2,2402,401

2,739

3,348

3,762

2,0231,777

0

500

1000

1500

2000

2500

3000

3500

4000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070

10

20

30

40

50

60Export valueGrowth rate

Million USD


Export Markets Structure 2007 (By Value)

Russia3.4%

South Korea7.7%

USA20.4%

Japan21.1%EU

25.7%China+HK

4.3%

ASEAN5.0%

Others12.3%


Export Value To 3 Main Markets (1997-2007)

0

100

200

300

400

500

600

700

800

900

1000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Million USD

JAPAN USA EU


Export Products Structure 2007(By Value)

Tuna4%

Other fishes9%

Frozen shrimp

40.1

Dried seafood

3.9%

Pangasius26%

Cephalopod7.5%

Other9.5%


In 10 years 1997-2007, Vietnam Pangasius:• Farming areas increased only 8 times, reached 9,000 ha• Annual commercial production of raw fish increased 45

times, from 22,500 MT to more than 1,000,000 MT• Volume of exported Pangasius fillets jumped-up more

than 55 times, from 7,000 MT to 386,870 MT. • Export revenue increased 50 times, from US$ 19.7 mill.

to US$ 979 mil.• Number of export markets increased to more than 80

countries and territories, in all continents.

In 10 years 1997-2007, Vietnam Pangasius:• Farming areas increased only 8 times, reached 9,000 ha• Annual commercial production of raw fish increased 45

times, from 22,500 MT to more than 1,000,000 MT• Volume of exported Pangasius fillets jumped-up more

than 55 times, from 7,000 MT to 386,870 MT. • Export revenue increased 50 times, from US$ 19.7 mill.

to US$ 979 mil.• Number of export markets increased to more than 80

countries and territories, in all continents.

Pangasius Success StoryPangasiusPangasius Success StorySuccess Story

25


PangasiusPangasius Export, 2001Export, 2001--20072007

0

50

100

150

200

250

300

350

400

450

2001 2002 2003 2004 2005 2006 2007

1.000 MT

0

150

300

450

600

750

900

1050

Million USD

Nămvolume value


YEAR 2020: THE WAY TO GO


Context is changingContext is changing

• The environmental, economic and social landscape is changing

• Consumer demands:– environmental sustainability– safety & quality of products– social equity and company responsibility

• Negative environmental and social impacts increase public scrutiny and criticism to seafood production

• Country and industry position change• Labour force’s education and income change• Natural resources and climate change


Major ChallengesMajor ChallengesMajor Challenges

• Economic sustainable growth • Environmental stewardship• Equitable distribution of benefits

• Economic sustainable growth • Environmental stewardship• Equitable distribution of benefits

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Sustainable developmentSustainable development

• International guidelines: FAO

• National Eco-label regulation: example: EU Council Regulation (EC) No 834/2007 of 28 June 2007

• National regulatory frameworks Compliance to international environmental standardsSolutions for small farmers and processorsInadequate enforcement of law at local levelsInspection and certification fees and costInvestor protection and limitation


Export Development ChallengesExport DevelopmentExport Development ChallengesChallenges

• Low price for famed fish trend • Bigger international competition• Anti-dumping cases for catfish frozen fillets and shrimp• Safety assurance legislation strengthened• Product quality uniformity• Traceability• Value-addition practices in entire value chain• Distribution channels building for Vietnam seafood• Branding & image building

• Low price for famed fish trend • Bigger international competition• Anti-dumping cases for catfish frozen fillets and shrimp• Safety assurance legislation strengthened• Product quality uniformity• Traceability• Value-addition practices in entire value chain• Distribution channels building for Vietnam seafood• Branding & image building

31


• Structural Change- Change aquaculture from cottage to corporation- Change aquaculture to a dynamic, capital-intensive business

• Knowledge-based industry- Change aquaculture from an art to a science- Modern fish farms - intensive knowledge-based enterprise- Intensification and diversification of business models

• Consolidation and vertical integration- Acquisitions, alliances, contracting of supply chains- Cost savings and product quality improvement - Value addition along the whole chain forces small producers

to be organized

Aquaculture Challenges


Vietnam Development StrategyVietnam DevelopmentVietnam Development StrategyStrategy

• Sustainable & responsible development • Environmental-friendly farming and processing• Consolidation and vertical integration • Technology & infrastructure modernization • Community-based co-management• Market diversification • Products diversification and value-addition• 4-Parties Strategic Alliance Set-up• Branding & country image building

• Sustainable & responsible development • Environmental-friendly farming and processing• Consolidation and vertical integration • Technology & infrastructure modernization • Community-based co-management• Market diversification • Products diversification and value-addition• 4-Parties Strategic Alliance Set-up• Branding & country image building

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2020’s High Targets2020’s High Targets2020’s High Targets• Total fish production over 6 mill. MT • Import raw seafood for re-processing US$ 2 bill.• Export value: US$ 8 billions • Value-added products 60-70% • Safety: no antibiotics, 100% farms GAP certified• Trade disputes: no more anti-dumping• Traceability: nationwide 100% implemented• Environment and natural resources recovered• Branding: Vietnam Seafood known worldwide

• Total fish production over 6 mill. MT • Import raw seafood for re-processing US$ 2 bill.• Export value: US$ 8 billions • Value-added products 60-70% • Safety: no antibiotics, 100% farms GAP certified• Trade disputes: no more anti-dumping• Traceability: nationwide 100% implemented• Environment and natural resources recovered• Branding: Vietnam Seafood known worldwide

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Thank Youand

See YouAgain

In Vietnam!

Vietnam Association of Seafood Exporters & Producers (VASEP)Head Office: #71, D5 str. Binh Thanh dist. Ho Chi Minh City, Vietnam

Gov. Relations Office: 10 Nguyen Cong Hoan str., Ba Dinh dist., Ha Noi, VietnamTel: +84 4 771 5055 • Fax: +84 4 771 5084 • Email: [email protected]

Website: www.vasep.com.vn

ACHIEVEMENTS & CHALLENGES FOR THE VIETNAMESE SEAFOOD …

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