VietNamNet Bridge – The death of some “big guys” in the fisheries sector in Can Tho and Soc
Trang provinces has sounded an alarm about the financial situation imbalance,
which may lead to the bankruptcy of a lot of seafood companies and fish farmers
as well.
Due to
the lack of capital, seafood companies buy fish from farmers under the mode of
deferred payment, which means that they try to use farmers’ capital for their
business. Meanwhile, farmers have to borrow money from banks to pay for feed
and other kinds of farming expenses. Many of them have become bent with the sky
high interest rates.
Analysts
have warned that if commercial banks stop disbursing money at this moment for
fear of the risks, this may lead to the collapse of a series of seafood
companies and farming households.
The fisheries sector is in danger
According
to the Vietnam Association of Seafood Exporters and Producers (VASEP), the
establishment of a series of tra fish processing factories in Mekong Delta has
not only caused a big waste to enterprises, but also led to the imbalance in
the material supply and demand. The unhealthy competition among the companies,
plus the capital shortage, have both made them suffer.
Also
according to VASEP, 80 percent of tra fish companies have to reduce the
processing capacity, while many enterprises have shut down.
The US
remains the market which has the highest demand for tra fillet products and
offers good prices. However, some Vietnamese enterprises still bear the high
anti-dumping tax rates of 53-63 percent when exporting their products to the
market. Meanwhile, Vietnamese exporters have been warned that they would meet
bigger challenges when competing with the products from Cambodia, Thailand,
Malaysia and Bangladesh which now attempt to reach out to the world market.
Meanwhile,
the enterprises have been attacked by big difficulties from all sides. The
aquaculture feed has increased by 16-30 percent over the last year. Meanwhile,
enterprises have to pay money for many other kinds of expenses, including the
fees for certificates, food hygiene inspection and taxes. The electricity and
fuel price increases have also led to the higher production costs, thus
lessening the competitiveness of Vietnam’s tra fish products. The policy on
tightening credit has also distressed farmers and processors.
The insolvency is in sight of many businesses
Some
bankers have warned that the enterprises with weak financial capability which
have been relying on bank loans would fall down in the current difficult
circumstances.
In An
Giang province alone, there are 17 enterprises which are running 21 seafood
processing factories with the average capacity of 12,500 tons per day. However,
the factories are thirsty for materials. Some processors planned to develop the
material growing areas themselves, but their plans have not been fulfilled. The
fish ponds developed by enterprises just can account for 34 percent of the
total aquaculture area and provide 61 percent in output.
Meanwhile,
processors now cannot collect materials from farmers, because farmers fear that
the processors would refuse to pay debts like Bianfishco did to its fish
suppliers.
Le Van
Sen, a farmer in Chau Phu district of An Giang province, said that he once
became penniless two years ago, when an enterprise refused to collect fish as
promised. Sen then signed a contract with Bao Vinh Company in Kien Giang
province under which Bao Vinh would buy 120 tons of fish, worth 1.4 billion
dong.
However,
Bao Vinh only paid 200 million dong to Sen and never returned. As a result, Sen
had to sell his land to make payment for due debts. “I still owe 190 million
dong to the banks, though I have sold everything I could,” he complained.
Source:
NLD
Business & Investment Opportunities
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