Tra fish farming faces capital shortage: VASEP

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SaigonTimes English - 33 month(s) ago 7 readings

HCMC – A large number of local firms are targeting at the model of closed tra fish production chain but most of them have found banking loans out of reach due to steep lending rates, said the Vietnam Association of Seafood Exporters and Producers (VASEP).

Tra fish farming faces capital shortage: VASEP

By Thai Hang - The Saigon Times Daily

HCMC – A large number of local firms are targeting at the model of closed tra fish production chain but most of them have found banking loans out of reach due to steep lending rates, said the Vietnam Association of Seafood Exporters and Producers (VASEP).

Thanh Binh District in the Mekong Delta province of Dong Thap is home to multiple large enterprises engaged in the seafood processing industry, including Hung Ca Ltd Co. The company last week started work on the construction of two aquaculture feed mills with total annual output of 400,000 tons that will be commissioned late this year.

Building more feed processing factories like Hung Ca would be normal if it is not the last job that must be finished in a closed seafood chain production, from cultivating, processing to exporting.

In fact, most businesses have had to depend on suppliers for input materials. Unlike them, Hung Ca has an input tra fish farming covering over 400 hectares and plans to increase the area to 412 hectares this year besides launching two new tra fish processing and exporting plants.

The company’s managing director Tran Van Hau said aquaculture feed price volatility, his firm’s biggest difficulty in many previous years, had been tackled already. Hau ascribed the improvement to the operation of two new feed processing plants at the end of the year, adding the facilities will supply enough feed for his business’ cultivation area when operating in full swing.

Apart from Hung Ca, several companies, including Vinh Hoan and Hung Vuong, have enough conditions to carry out such a production process as well.

Nguyen Huu Dung, vice chairman of VASEP, commented the tra fish sector last year got an impressive achievement. He cited the improvement on breeding, feed and processing, adding over 70% of the current tra fish output has been produced by firms or under cooperation between them and farmers.

Closed chain production helps firms to be more active in ensuring the quality of input material supply, controlling antibiotic usage and hygiene conditions in farming as well as saving related costs. On top of that, tra fish export products will be qualified for origin requirements of import markets such as the U.S. and Europe.

However, VASEP officials pointed out, the biggest obstacle of industry players lies in capital mobilization.

Each tra fish farming hectare with total output of 300 tons a year requires about VND6 billion of investment for every crop. As lending rates offered by local banks remain high, businesses have failed to access loans for farming or feed manufacturing projects worth hundreds of billions of Vietnam dong each.

As per the 2012 plan of the Ministry of Agriculture and Rural Development, the Mekong Delta region alone needs some 2.6 billion tra breeder fish for farming in 5,500-6,000 hectares.

The ministry this year aims at total output of 1.2-1.5 million tons generating US$1.85-2 billion in export value. Therefore, VASEP’s vice chairman Duong Ngoc Minh predicted the seafood industry needs around VND26 trillion to achieve the above target. He warned farmers would suffer a severe lack of long investment fund as banks can only lend them a limited sum.

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