Pangasius export situation in the first 10 months of 2011
Over the last few years, the Vietnam Pangasius industry has been facing great challenges in the context of global economic regression; competitiveness reduced due to rocketing price of imported feed material, local loan interest rate shooting up at record level while selling price was on down trend. Most Pangasius farmers and export fillet processing companies tended to cut cost by switching to cheap input materials and reduce output selling-price to maintain market share. However, this seemed not to be an effective approach, since fillet export value continued to be instable, more cases of anti-dumping investigations and questions on quality of Vietnam Pangasius fillet, which caused adverse effects on the competitivess and development future of Vietnam Pangasius in the world market
However, in the first 10 months of 2011, the Vietnam Pangasius industry has surprisingly recovered.
Total Pangasius export value achieved USD 1.47 billion, increased 27.6 % compared to the same period last year, accounting for more than 30% of total Vietnam's aquaculture product export value. These results are attributable to Pangasius farmers and export processing companies’ efforts in solving two fundamental problems: first, to save production costs and enhance investment capital use efficiency, and second, to achieve economy of scale through moving from small to industrial production, investing in research and development for value-added products, and improvement of fingerling and feed quality in collaboration with universities and research institutes; as well as apply international management standards like ASC, BAP, Global GAP… to satisfy world market’s increasingly sophisticated requirements on product quality and traceability.
Sustainable development from full value chain model “Material – feed – farming – processing – export”
Recent investments in Pangasius industry are trending towards a model of full and closed value chains from feed production, fish farming to fillet processing and export, which enables stringent control of product quality, ensuring highest food hygiene and safety standards and best product value. Top Pangasius exporters like Vinh Hoan, Hung Vuong, Cuu Long Aqua, Bien Dong… own themselves a full production chain from hatcheries, fish farms applying strict international management standards, to modern Pangasius fillet processing plants. Their fish farms use feed produced from their own feed milling plants. This ensures strict quality control at all stages of the production process.
In the production value chains, feed quality control is critical to business success, as feed cost accounts up to 80% total production cost, and feed quality directly affects fillet quality and farming efficiency. Challenges for feed millers in ensuring feed quality is how to manage the supply and quality of rice bran, as rice bran is one of the main ingredient that takes up 30% feed formulation. Currently, the supply of rice bran in the market is seasonal and its storage life is very short due to natural oil rancidity reaction. According to many studies, rancid rice bran does not only reduce feed’s nutritional value but also produces toxics that has negatively effects on fish heath, fish growth rate and fillet quality (according to Dr. Le Thanh Hung – Dean of Fisheries Faculty, Nong Lam University).
Total cost and quality management approach – the key to success
In May 2011, Vinh Hoan 1, a subsidiary of Vinh Hoan group, who supplies feed to all Vinh Hoan’s Pangasius
fish farms, signed the cooperation program named “Vinh Hoan feed – Cam Vang inside” with Wilmar Agro Vietnam – the leading clean rice bran producer in Vietnam. Under this program, Wilmar Agro Vietnam commits to Vinh Hoan 1 a stable annual supply of 30,000 tons of Cam Vang clean feed rice bran – produced under strict international quality management system ISO 9001:2008 and HACCP - for fish feed production. With this program, Vinh Hoan can minimize the risks from low quality material, off-season shortage problems, and at the same time, differentiate its product quality to better exploit markets like USA and EU with fillet selling price at 30% higher than industry average, claiming top position among Vietnamese Pangasius exporters.
Research by Can Tho University and recent farm studies in Tra On District - Vinh Long province as well as empirical farming results in recent years show that Cam Vang is superior in quality to dried rice bran in the market, thanks to high protein content and low oil oxidation that help fish grow better, giving low FCR and reduce fish mortality. This means cost saving and higher production efficiency for the farmers. In addition, Cam Vang gives higher fillet yield and better fillet quality in terms of high protein, low fat and low LDL-cholesterols contents, and brighter color; selling price therefore is higher.
Pioneering in investment of self-managed farming areas, source of fingerling, and taking initiative in choosing only high quality feed materials with stable supply and reasonable price like Cam Vang to minimize production risks and ensure good product quality and high production efficiency, which means total production cost reducing and profitability increasing, are the key to success for Vietnamese Pangasius businesses. Nowadays, not only Vinh Hoan, but also many other companies in the Pangasius industry are moving in this direction, which contributes to build up a more
solid foundation for Vietnam Pangasius industry towards sustainable development.
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Wilmar Agro