GLOBEFISH - Viet Nam - Seafood from Waterland - Mar 2010 by GLOBEFISH

GLOBEFISH RESEARCH PROGRAMME Viet Nam - Seafood from Waterland Volume 99

Food and Agriculture Organization of the United Nations Products, Trade and Marketing Service Viale delle Terme di Caracalla 00153 Rome, Italy Tel.: +39 06 5705 5074 Fax: +39 06 5705 5188 www.globefish.org

Viet Nam - Seafood from Waterland Volume 99

VIET NAM Seafood from Waterland

Herby Neubacher (March 2010)

The GLOBEFISH Research Programme is an activity initiated by FAO's Products, Trade and Marketing Service, Rome, Italy and financed jointly by: -

NMFS (National Marine Fisheries Service), Washington, DC, USA FROM, Ministerio de Agricultura, Pesca y Alimentación, Madrid, Spain Ministry of Food, Agriculture and Fisheries, Copenhagen, Denmark European Commission, Directorate General for Fisheries, Brussels, EU Norwegian Seafood Export Council, Tromsoe, Norway FranceAgriMer, Montreuil-sous-Bois Cedex, France ASMI (Alaska Seafood Marketing Institute), USA DFO (Department of Fisheries and Oceans), Canada SSA (Seafood Services Australia), Australia

Food and Agriculture Organization of the United Nations, GLOBEFISH, Products, Trade and Marketing Service Viale delle Terme di Caracalla, 00153 Rome, Italy – Tel.: (39) 06570 56313 E-mail: GLOBEFISH@fao.org - Fax: (39) 0657055188 – http//:www.globefish.org

The designation employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

Herby Neubacher; VIET NAM – SEAFOOD FROM WATERLAND GLOBEFISH Research Programme, Vol.99 Rome, FAO. 2010. p. 124.

Viet Nam’s rise to the top of the global seafood industry is described and analysed. The principal fishery products are examined and their potential discussed. The emphasis is on how Viet Nam can make this industry sustainable, maximize its processing potential and improve the conditions of the fishermen.

Report edited by Ruth Duffy Report layout prepared by Tony Piccolo FAO – GLOBEFISH

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TABLE OF CONTENT

EXECUTIVE SUMMARY.................................................................................................. 1

INTRODUCTION ............................................................................................................... 2 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. 2.8.

PANGASIUS....................................................................................................................... 8 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. 3.7. 3.8. 3.9. 3.10.

Viet Nam's rapid rise to the top .................................................................................. 2 Fishing as a living ...................................................................................................... 2 Three seafood areas.................................................................................................... 3 Doi Moi ..................................................................................................................... 4 From state-owned to joint stock.................................................................................. 5 Monostructured portfolio ........................................................................................... 6 WTO membership...................................................................................................... 6 Further changes ahead................................................................................................ 7

The catfish miracle..................................................................................................... 8 Native of the Mekong Delta ....................................................................................... 9 From rivers to ponds ................................................................................................ 10 Pangasius processing criteria.................................................................................... 11 Colour systems......................................................................................................... 12 Supporting additives and glazing.............................................................................. 13 Market statistics ....................................................................................................... 14 A cheap substitute .................................................................................................... 15 The farmers.............................................................................................................. 16 Farming and processing............................................................................................ 17

SHRIMPS.......................................................................................................................... 18 4.1. Tigers and vannamei ................................................................................................ 18 4.2. Rice and shrimp: mother and child ........................................................................... 18 4.3. Extensive farming systems ....................................................................................... 20 4.4. Shrimp processing.................................................................................................... 21 4.4.1. International shrimp trading .................................................................................... 22 4.5. The market for shrimps from Viet Nam.................................................................... 23 4.5.1. Development since the 1980's................................................................................... 23 4.5.2. Market access in 2008.............................................................................................. 24 4.6. Investing in shrimp's future ...................................................................................... 25 4.6.1. Shrimps exports in 2009 (Jan.-Jun.) ......................................................................... 25

WATER FARMS .............................................................................................................. 26 5.1. 5.2. 5.3. 5.4. 5.5.

Cobia ....................................................................................................................... 27 Grouper and barramundi .......................................................................................... 28 Spiny lobsters and oysters ........................................................................................ 29 Clams....................................................................................................................... 30 Tilapia...................................................................................................................... 32

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FISHING ........................................................................................................................... 33

SEA CATCH..................................................................................................................... 36 7.1. Tuna......................................................................................................................... 37 7.1.1. Different qualities for selected markets .................................................................... 38 7.1.2. Technological upgrading needed.............................................................................. 39 7.2. Cephalopods ............................................................................................................ 40 7.2.1. Processing ............................................................................................................... 41 7.2.2. Flower blocks........................................................................................................... 43 7.2.3. Characteristics......................................................................................................... 44 7.3. Crab ......................................................................................................................... 45 7.3.1. Crab meat ................................................................................................................ 46 7.3.2. Characteristics......................................................................................................... 46 7.4. Speciality products................................................................................................... 47 7.5. Market Statistics....................................................................................................... 48

INDUSTRY....................................................................................................................... 49 8.1. 8.2. 8.3. 8.4. 8.5. 8.6. 8.7. 8.8 8.9

From raw processing to product ideas ...................................................................... 49 Riding out the book.................................................................................................. 50 VASEP .................................................................................................................... 50 Factory categories .................................................................................................... 51 Women and the fishing industry ............................................................................... 53 Nam Viet ................................................................................................................. 54 Bianfishco................................................................................................................ 55 Agrex Saigon ........................................................................................................... 57 Raw material requirement ........................................................................................ 59

TRADE ............................................................................................................................. 60 9.1. Strategic planning .................................................................................................... 60 9.2. Harmonious trading.................................................................................................. 61 9.3. Supply and Demand ................................................................................................. 61 9.4. Prices ....................................................................................................................... 62 9.5. Service ..................................................................................................................... 63 9.6. Target value ............................................................................................................. 64 9.7. Intricacies of trade.................................................................................................... 66 9.7.1. Personal trade trip ................................................................................................... 66 9.7.2. Agents ...................................................................................................................... 66 9.7.3. Orders must be exact................................................................................................ 67 9.7.4. Independent quality control...................................................................................... 68 9.7.5. Health certificate ..................................................................................................... 68 9.7.6. Shipping out............................................................................................................. 68 9.7.7. Payment conditions .................................................................................................. 69 9.7.8. Currency and banking situations .............................................................................. 69 9.8. Vietfish .................................................................................................................... 69 9.9. Habitats and customs................................................................................................ 70 9.9.1. The same, but different ............................................................................................. 70 9.9.2. Aunts and Uncles ..................................................................................................... 70 9.9.3. Do something without the Vietnamese ...................................................................... 70

9.9.4. "Yes" ........................................................................................................................ 70 9.9.5. "Sorry"..................................................................................................................... 71 9.9.6. Tet............................................................................................................................ 71 9.9.7. Eating together....................................................................................................... 72 10. ECOLOGY AND ENVIRONMENT ................................................................................. 72 10.1. Green is the future.................................................................................................... 72 10.2. "Pure", "Blue Planet" or "Bio".................................................................................. 73 10.3. Bio and sustainable .................................................................................................. 74 10.3.1. WWF in Viet Nam .................................................................................................. 74 10.4. Bio shrimps.............................................................................................................. 76 10.5. The Mekong river .................................................................................................... 76 10.6. GMOs ...................................................................................................................... 78 10.7. Education and control needed................................................................................... 78 11. OUTLOOK........................................................................................................................ 79 11.1. 11.2. 11.3. 11.4. 11.5. 11.6. 11.7. 11.8.

Sustaining the success .............................................................................................. 79 Pangasius ................................................................................................................. 80 Shrimp ..................................................................................................................... 80 Water farming .......................................................................................................... 81 Fisheries................................................................................................................... 81 Industry.................................................................................................................... 82 Trade........................................................................................................................ 82 Environment ............................................................................................................ 83

12. CONCLUSIONS ............................................................................................................... 83 13. FACTS AND FIGURES (selected statistics)...................................................................... 84 13.1. General situation ...................................................................................................... 84 13.1.1. Pangasius............................................................................................................... 85 13.1.2. Shrimps .................................................................................................................. 87 13.1.3. Fishing and Seafish ................................................................................................ 88 13.1.4. Export and Markets................................................................................................ 90 14. PROCESSORS AND EXPORTERS (selected companies in alphabetical order) ................. 93 14.1. 14.2. 14.3. 14.4. 14.5.

Pangasius ................................................................................................................. 93 Shrimps.................................................................................................................... 95 Sea Catches.............................................................................................................. 98 Value added products ............................................................................................. 101 Contacts and Services............................................................................................. 103

TABLES TABLE 1: NATIONAL AND INTERNATIONAL STANDARDS ON HYGIENE AND FOOD SAFETY OF/ VIETNAMESE SEAFOOD PROCESSING PLANTS IN 2008 ............... 53 TABLE 2: FREEZING AND MANUFACTURING EQUIPMENT.......................................... 57 TABLE 3: TOP 10 WORLD SEAFOOD EXPORTERS........................................................... 85 TABLE 4: VIET NAM FROZEN PANGASIUS FILLET EXPORT IN 2008 ........................... 86 TABLE 5: PANGASIUS EXPORT PRICE SITUATION YEAR 2008..................................... 86 TABLE 6: PANGASIUS EXPORT PRICE SITUATION YEAR 2009..................................... 86 TABLE 7: VIET NAM FROZEN SHRIMP EXPORT MARKETS IN 2008............................. 87 TABLE 8: VIET NAM FISHERIES EXPORT COMMODITIES IN 2008 .............................. 88 TABLE 9: VIET NAM FROZEN AND FRESH TUNA EXPORT IN 2008 ............................ 88 TABLE 10: VIET NAM MARINE FISH PRODUCTS EXPORT IN 2008 (EXCLUDING TUNA)...................................................................................................................................... 89 TABLE 11: VIET NAM FROZEN CEPHALOPODS EXPORT IN 2008 ................................. 89 TABLE 12: VIET NAM FISHERY PRODUCT EXPORT BETWEEN 1990 â&#x20AC;&#x201C; 2008 ................ 90 TABLE 13: VIET NAM SEAFOOD EXPORT MARKETS, 2008 ............................................ 91 TABLE 14: VIET NAM FISHERIES EXPORT MARKETS, JANUARY 2009 ........................ 92 TABLE 15: FISHERIES EXPORT COMMODITIES IN JANUARY 2009............................... 92 BOXES: BOX 1: EXAMPLES OF SHRIMP PRODUCTS FROM VIET NAM...................................... 22 BOX 2: VIETNAMESE TUNA CATEGORIES....................................................................... 39 BOX 3: CATCHING SEASONS.............................................................................................. 44 BOX 4: CEPHALOPODS PRODUCTS ................................................................................... 45 BOX 5: CRAB SPECIES ......................................................................................................... 47 BOX 6: CRAB PRODUCTS AND EXPORT MARKETS........................................................ 47 BOX 7: VASEP........................................................................................................................ 51 BOX 8: NAM VIET (NAVICO)............................................................................................... 54 BOX 9: NAVICO SEAFOOD PROCESSING FACTORIES.................................................... 55 BOX 10: BIANFISHCO........................................................................................................... 56 BOX 11: SEAFOOD EXPORTS .............................................................................................. 65 BOX 12: EXPORTS 2009 COMPARED TO 2008 ................................................................... 65 BOX 13: PANGASIUS ORDER (EXAMPLE)......................................................................... 67 BOX 14: VIETFISH................................................................................................................. 69 BOX 15: POLLUTION IN THE MEKONG ............................................................................. 77

FIGURES: FIGURE 1: VIET NAM FISHERY SECTOR 1995 TO 2008 .......................................................... 84 FIGURE 2: PANGASIUS EXPORT MARKET SHARES 2008................................................ 85 FIGURE 3: SHRIMP EXPORT MARKET SHARES BY VALUE 2008........................................... 87 FIGURE 4: VIET NAM SEAFOOD EXPORT GROWTH 1997 â&#x20AC;&#x201C; 2008 $US MIL ............................. 90 FIGURE 5: VIET NAM SEAFOOD EXPORT VALUE COMPARED TO GROWTH RATE ........... 91

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FOREWORD The legend tells of the Dragon King of the Mountains, Lac Long Quan, who fell in love with the Fairy Queen of the Seas, Au Co. Their offspring, born of 100 eggs, were divided between two different habitats: half the children went to the seashore to live off the waves; the other half stayed with the father and lived off the land. Their country was called Dat Nuoc, i.e. “Made of Land and Water” or “Waterland”, better known today as Viet Nam. The children of the Fairy and the Dragon who went to the sea were perhaps more far-sighted, as Viet Nam harbours immense wealth in its waters and the catch from sea and farms reaches over 150 markets worldwide and Viet Nam holds its place in the world’s top ten seafood suppliers – in some sectors, such as shrimp and pangasius catfish, even in the top five. In 2008, the Vietnamese seafood industry had a turnover of over US$4.5 billion; the negative economic situation globally resulted in some stagnation in 2009, but the figures are nevertheless very impressive. I have been following this “Fairytale” of seafood export success for almost a decade, having come to Viet Nam for the first time in 2000. I cohabit with the Vietnamese seafood industry in numerous guises: as journalist, marketing consultant and quality assurance and control advisor. Viet Nam is a fascinating but complicated country, full of challenges. Nothing is the next day as it was the day before, and the “shotgun” way in which Viet Nam developed from a nearly no-name seafood country to the top is incomparable by European or other Western standards. Viet Nam is “market driven” in the true sense of the word – the Vietnamese are tradespeople by nature who fight their way into the markets – often at any cost. They were born on the fish market and are perfectly at home there. Despite the country’s rise to the top, most of the seafood system in Viet Nam remains to this day clannish and somewhat behind curtains. This publication is the result of my endeavour to report on a complex and multicoloured country.

ACKNOWLEDGEMENTS The assistance of the Ministry of Agriculture and Rural Development (MARD), which is also responsible for the fishery sector of Viet Nam, is greatly appreciated. In particular, gratitude is expressed to Dr Luong Le Phuong, the Right Honourable Vice Minister of Fisheries, and to Dr Chau Viet To, MPA, Deputy Director-General of the International Cooperation Department, for supplying valuable background reports on the Vietnamese situation from 2008. Thanks is given to Dr Thai Thang Duong, National Information Consultant, and Prof. Dr Nguyen Huu Dzung, Standing Vice-Chairman of the Viet Nam Association of Seafood Exporters and Producers (VASEP), for reports which formed the statistical basis of my own report.

1. EXECUTIVE SUMMARY Viet Nam means “Water Land” and its waters have been a valuable resource ever since the beginning of time. However, recently, in just one decade Viet Nam’s seafood industry has expanded to become one of the largest in the world. Viet Nam is currently ranked number three in the world (behind China and India) for aquaculture production and number six for aquatic products exports. The fisheries sector of Viet Nam accounts for 5.8% of national GDP (Gross Domestic Product), 7.8% of export turnover and 10% of the labour force. It is clearly a sector worthy of attention. In 2008, Viet Nam’s fisheries exports generated a total revenue of USD 4.509 billion, a 20% increase on 2007. Viet Nam’s aquaculture comprises freshwater, brackish water and seawater species, which are both caught and farmed. One of the most important fishing areas is the Mekong River Delta, home to a rich variety of species, some of which are farmed alongside the important agriculture crop of rice. As fisheries in this rich area increase, so must the care to protect the environment. The biggest threat to the Delta comes from the household waste produced by the rapidly expanding population. Good aquaculture practices (GAP) must be adopted to guarantee product quality and to protect the environment. However, Global GAP, for example, can only be effective if it becomes routine and subject to regular checks. Viet Nam farms and catches an immense variety of fish, from crustaceans and cephalopods to white fish and tuna. In particular, Viet Nam dominates the world pangasius market. Pangasius has filled the gap resulting from the global shortage of catches of white fish, such as cod. It is predicted that pangasius exports may reach USD 1.2–1.3 billion. Pangasius is the only freshwater aquaculture fish annually discussed at the International White Fish Forum – all other industrial fish stocks under review come from sea catches. However, pangasius fillets retail the world over at very low prices; this is to the detriment of the Vietnamese fishermen and, ultimately, also to the product itself. Efforts must be directed towards an effective marketing strategy so that pangasius can be sold at higher prices, marketed as the quality product it truly is. Shrimp is the major species farmed in marine and brackish waters. Black tiger and white shrimp (and more recently vannamei) generate the highest export value. Frozen shrimp is the most important commodity in Vietnamese aquatic products exports, reaching almost 200 000 tonnes to a value of USD 1.625 billion, accounting for 36.1 percent of the total value of aquatic products exports. Water farm production, both at sea and inland, has seen great development in all freshwater, brackish water and marine water bodies, maintaining a climate of sustainability, environmental protection and harmony with other economic sectors. Water farming takes place almost everywhere in Viet Nam and is regarded as one of the key strategies of the fisheries sector. Fisheries in Viet Nam tend to be small-scale and old-fashioned. This is good for the environment and the resources themselves as the waters are not overfished. The processing industry, in contrast, is very modern and boasts excellent hygienic facilities equipped with the latest machinery. Indeed, it is one of the most modern in the world and ranks in the top five in various segments, boasting over 500 state-of-the-art factories located all along the coast.

However, the “gap” between fisheries and processing means that the factories do not work to full capacity – some work to as little as 30 percent capacity. While the capacity from both catch and farming opportunities is far from fully developed and efforts can be made to increase the Vietnamese fisheries output by providing a modern fleet, a more likely solution is for raw material to be brought in from abroad. Stringent controls must be implemented to guarantee quality and traceability. Following Viet Nam’s rapid rise to the top of the world’s seafood industry, it is now time to ensure that this success is long-lasting. Thanks in great part to fisheries, the poverty gap ratio in Viet Nam fell from 24 percent in 1993 to just 11 percent in 2002; nevertheless, the Government cannot become complacent. Control systems need to be installed to guarantee quality, but they must be accompanied by the appropriate controls. This is the task faced by the Vietnamese seafood sector in the years to come. 2. INTRODUCTION 2.1. Viet Nam’s rapid rise to the top The rapid rise of the Vietnamese seafood business to the top of the list of international suppliers can hardly be matched. Within two decades Viet Nam grew to become a modern seafood supplier; in some sectors – such as the white fish commodity market with the pangasius catfish – it is the market leader. A recent report of the Ministry of Fisheries describes Viet Nam’s market position as follows (Dzung): Viet Nam is ranked in the top 20 of the world’s fishing nations, the third in terms of world aquaculture production (just behind China and India), and the sixth in terms of aquatic products export. The fisheries sector of Viet Nam accounts for 5.8% of national GDP (Gross Domestic Product), 7.8% of export turnover and 10% of the labour force. The sector has maintained an impressive production growth rate of 12% annually for the past twenty years and has contributed to reducing poverty, improving food security and food safety. In 2008 Viet Nam’s fisheries exports generated a total revenue of USD 4.509 billion, 20% higher than that of 2007. 2.2. Fishing as a living Viet Nam has lived with fish since ancient times; annual per caput consumption of fish and seafood is currently estimated at 25–32 kg. The population lives with water from which it derives wealth and nourishment. Fishing and water-farming are in the blood of every Vietnamese living on the shores or farming the ponds, paddies and lakes inland. Viet Nam boasts a coastline of 3 260 km spread over 15 latitudes in a north-south direction from Mong Cai (Quang Ninh) to Ha Tien (Kien Giang) and covers a wide range of ecologies. Viet Nam looks to the Tonkin Gulf in the north, the Pacific Ocean in the centre and the Gulf of Thailand in the southwest. Internal and territorial waters account for a total of 226 000 km2. The fishery economic exclusive zone is more than 1 million km2, i.e. about three times the land surface area. Viet

Nam’s marine waters are part of the western-central Pacific fishing grounds with its diverse and abundant biological resources. Viet Nam’s fishing grounds represent one of the biggest marine fish resources in the world and a major daily food source for the majority of Viet Nam’s fishermen. Viet Nam’s seawaters are home to about 2 038 fish species (130 of which of high economic value), 1 600 crustacean species, 2 500 mollusk species (more than 100 of which of high commercial value), as well as rare and precious species. Of Viet Nam’s marine fish resources, the majority are small pelagic fish accounting for 54.08%, followed by bottom fish (23.14%) and ocean pelagic fish (22.78%), including tuna. Viet Nam’s marine fish biomass is estimated at more than 5 million tonnes. The annual total allowable catch (TAC) is about 2 million tonnes. The crustacean species include: 40 species of the Paneidae shrimp family (11 of which of special economic value); 9 species of the Palinuridae family; 9 of the Scyllarridae family; 4 of the Nephropidae family (more commonly known as spiny lobster) of high economic value; and swimming crab and marine crab (with an average annual TAC of about 1 000 tonnes). The southern coastal provinces have seen rapid development in farming of commercial crab and swimming crab and other marine fish species. Annual exports of crab and swimming crab products reach more than 8 000 tonnes with a value of approximately USD 48 million. High economic value mollusk species include bivalve species, cephalopod and gastropod. The mollusk biomass in Viet Nam seawaters is about 1 million tonnes; its annual allowable catch capacity is about 500 000 tonnes. The seawaters are also home to 90 species of seaweed of high economic value. Of these, 24 species are used in industrial processing (accounting for 26%), 30 are used as food (33%), 10 for animal feeding (11%) and the remaining 8 as fertilizer. Viet Nam also boasts freshwater fish resources in its 2 860 rivers (big and small) in addition to its many water-inundated areas, ponds and lakes, low paddy fields and mangrove forests. The Red River Delta and Mekong River Delta are particularly rich resources. In this land of rivers, lakes, lagoons, channels and long coastline, all offering abundant resources, Vietnamese people can look back to a long tradition of fishing intricately linked with historical river and water trades and Viet Nam’s legends. 2.3. Three seafood areas The type of fishing and aquaculture undertaken depends on the area: •

The south of the country is dominated by the aquaculture of the Cuu Long (the “Great Dragon”), i.e. the Mekong Delta. Here the Vietnamese pangasius (Pangasius hypophthalmus and P. bocourti) is farmed; the south tip, the tidal delta area with its famous mangrove forests, is the shrimp farming area, in particular black tiger (Penaeus Monodon), but more recently also white legged shrimps (Litopenaeus Vannamei) in controlled conditions.

•

The centre of the country, from the holiday and fishery resort of Nha Trang to the main tuna hubs, Phu Yen and Binh Dinh, is Viet Nam’s main fishing area. Fishing vessels are mostly wooden and no more than 20 m; they go out for all kinds of sea fish, including the most valuable catch, tuna. There are green “flower” spiny lobster (Panulirus spp.) farms, and other sea fish are also farmed, for example, grouper (Epinephelus spp.) and cobia (Rachycentron candum). In the north, fishing is predominantly at sea and concentrates on pelagic species; some shrimp farming takes place.

Around 120 000 fisheries boats are used nationwide, including marine fishing boats, inland fishing boats and service boats (the latter carry products and necessities for fishing boats, farms and processing units). The total aquaculture area – including water surface, ponds for treating water for use in growout ponds, wastewater treatment ponds, land for aquaculture establishments – is approximately 1.1 million ha. There are more than 500 industrial-scale seafood processing plants. The employment generated by the fisheries sector, including fishing, aquaculture, processing, mechanics, services and trading, is estimated to be 4.5 million (accounting for 10% of the country’s total labour force), of which 1.65 million come from aquaculture and fishing. Around 10 million Vietnamese (of a total population of approximately 83 million) depend at least in part on fisheries production and trading for their income (Duong). 2.4. Doi Moi The fundamental change that made the success story of Viet Nam’s seafood industry possible was the frame set by the Doi Moi (“New Way”) 1 of opening the socialist system of centralization to market forces, hence international market access. Private enterprise soon flourished in Viet Nam; while still under the guidance of Socialist care, it made a market-oriented approach possible. The sign for this change was the joint stock company that replaced the former government-owned and government-run enterprises. At the end of the 1990s, the Viet Nam Association of Seafood Exporters and Producers (VASEP) was formed to build a roof over the industry and develop the often old and outdated fish and seafood processing plants into modern state-of-the-art factories.

Doi Moi (the usual English spelling of Vietnamese ðổi mới) is the name given to the economic reforms initiated in Viet Nam in 1986. As a result of Doi Moi many privately-owned enterprises were permitted in commodity production (and later encouraged) by the Communist Party of Viet Nam; furthermore, the push to collectivize the industrial and agricultural operations of Viet Nam, previously the focus of intense efforts by the Communist authorities, was abandoned. These reforms led to the development of what is now referred to as the Socialist-oriented market economy, where the state sector plays a decisive role in the economy but private enterprise and cooperatives play a significant role in commodity production (Wikipedia).

Viet Nam not only allowed but encouraged international support in the form of expertise and financial aid to fulfill this project. A DANIDA (Danish International Development Agency) project developed Vietnamese fish processing and installed modern techniques. Other international government organizations and NGOs (Non-governmental Organizations) – including FAO, SIPPO (Swiss Import Promotion Programme) and GTZ (German Agency for Technical Cooperation) – worked and gave support to the rapidly changing Vietnamese seafood industry. The product was frozen fish and seafood; modern freezing techniques had to be established, and enterprises installed IQF (individual quick frozen) and plate freezers. Most of the factories were rebuilt and equipped in line with the latest (mostly European and Japanese) food processing standards. HACCP (Hazard Analysis and Critical Control Point) was implemented as a working system in all processing facilities, and the government control body Nafiqad (National Fisheries Quality Assurance Directorate, formerly Nafiqavad) installed seafood security systems in the plants. Nafiqad must issue health certificates for every batch of seafood that leaves Viet Nam for export: there is no export licence without a health certificate. A lid was thuse put on most of the illegal and no-good seafood products leaving the country. 2.5. From state-owned to joint stock A good example of the radical changes brought to the industry by the implementation of modern expertise and techniques is Agifish: a company based in the city of Long Xuyen, An Giang Province in the Mekong Delta, and one of Viet Nam’s leading pangasius exporters. It began as the government-run An Giang Fisheries and its main activity was the harvesting of catfish from the Mekong Delta. It was later converted into a joint stock company and changed its name to Agifish. In 2007–08, it did a major overhauling of its facilities and is now a privately owned company listed on the Vietnamese stock market. From the very beginning, Viet Nam looked beyond its borders to the international markets for support and help in exporting frozen pangasius fillets and shrimps. These products are mostly first-stage processed, i.e. simply gutted, filleted or de-shelled, trimmed and then deep-frozen. VASEP invited its members (mainly industry enterprises) to take national booths at the major seafood exhibitions around the world and present their products to importers and other buyers. By joining forces to market the product, even those companies lacking experience in marketing were bolstered by joint presentations; moreover, Viet Nam became a focus for international buyers. The system was successful. Viet Nam now exports seafood to 150 world markets; there are 500 industry processors, of which 300 are licensed to export in high-end markets, such as the United States, Japan and the European Union (EU). There have been setbacks, however, including two major “dumping” cases in the United States market. In the first, Viet Nam’s pangasius catfish marketed in the United States competed with the national catfish industry of the southern states of Mississippi, Alabama

and Louisiana, leading to a dumping case against Viet Nam which resulted in the word “catfish” being dropped from their product. A few years, later Viet Nam’s competitive shrimp exports to the United States caused the shrimp fishermen of Louisiana to put a dumping case up against Southeast Asian imports, not only from from Viet Nam but also Thailand and other regions. In 2000, the European market temporarily blocked almost all seafood exports from Viet Nam – the consequence of a debate about antibiotics in seafood products, in particular shrimps. The so-called “chloramphenicol crisis” was hyped up in the EU and was successfully overcome by more stringent laboratory controls in Viet Nam. 2.6. Monostructured portfolio Viet Nam’s product export portfolio is highly monostructured: about 50 percent of the total value is generated by just two aquaculture products: In 2008, the two main and most important aquatic commodities exported from Viet Nam were frozen shrimp and frozen pangasius fillets. Volume of those two commodities in 2008 reached 832 382 tonnes, took 67.33%, valued at USD 3 078 million, took 75.84% of total exported aquatic products from Viet Nam. Other second ranking commodities were fresh and frozen tuna, other marine fishes, cephalopods and dried sea products. (Dzung) As a result, the industry is vulnerable. Problems occur concerning the introduction of good aquaculture practices in the farms around Viet Nam and also in relation to the commodity market’s ups and downs. Pangasius has become a major player in the global supply of white fish, because the other commodities in industrial fish products, such as Alaska pollack and cod, have become scarce and overused. Pangasius filled a gap in the processing industry of developed countries and is now accepted throughout Europe. Shrimps are another important commodity. The monostructured Vietnamese shrimp processing industry used to be limited to the tiger shrimp, but given the competitiveness of the market, it was forced to diversify and include vannamei. Viet Nam is thus striving to create a profile and maintain open and stable access to the market. 2.7. WTO membership A vital step taken by the Vietnamese industry into the international seafood markets was when the country gained membership of the WTO (World Trade Organization) in 2007, opening doors to new markets, such as South America, the Near East and Africa. The positive effects were seen immediately. Viet Nam’s fisheries sector grew at a rate of about 18 percent per annum between 1998 and 2008 – one of the fastest rates for the sector worldwide – yet there is concern that the growth is not sustainable. At a seminar on the impact of the WTO membership on the fisheries sector, the Ministry of Agriculture and Rural Development (MARD) said that Viet Nam had been listed among the top ten aquatic product exporters in the world since 2001, and that in 2008,

the country reached sixth place for export turnover, third for aquaculture output and 13th for seafood catch. In 2007, the first year of Viet Nam ’s WTO integration, aquaculture output reached 2.1 million tonnes, surpassing the exploitation output for the first time. The following year, Viet Nam netted 4.6 million tonnes of aquatic products (2.5 million tonnes from aquaculture and 2.1 million tonnes from fishing), jumping to third place for aquaculture output and 13th for fishing output worldwide. In 2008, Viet Nam grossed USD 4.5 billion from exporting aquatic products, ranking sixth in terms of export value. After just 2 years of WTO integration, the sector had achieved high growth rates: 4.2 million tonnes in output and USD 3.8 billion in export turnover in 2007, and 4.6 million tonnes and USD 4.6 billion in 2008. According to VASEP, aquatic products from Viet Nam are sold to more than 160 countries and territories worldwide and quality is continuously improving. Over 300 enterprises meet EU standards for imported products, and more than 400 export to the United States, China, the Republic of Korea and other markets. The fisheries sector plays an important role in the domestic economy, contributing some 7.3 percent of the country’s total export value in 2008, providing jobs to more than 4 million labourers, and bringing direct or indirect income to some 10 percent of the population. In the past 15 years, the sector has contributed over 5 percent to the country’s GDP. On the domestic market, aquatic products are among the traditional foods favoured by the Vietnamese, particularly fresh products. Annual per caput consumption is on average 36 kg, and the figure is increasing. However, it is the sector’s high growth in both production and export value that provokes concern over the sustainability of this development. As VASEP Vice-President, Nguyen Huu Dung, stated: “The development of the fisheries sector in recent times is too quick and unstable in all economic, environmental and social aspects.”. In addition to the various ecological issues (the threat to the environment and the potential exhaustion of the aquatic resources), there are other problems: Vietnamese aquatic producers have not built up a trademark for their products and they sell under the labels of importers or foreign distribution networks (VNA). 2.8. Further changes ahead Major challenges are to be faced by the Vietnamese industry in the future, in particular, diversification and sustainability. A gap exists between industrial production, which is modern with the latest processing equipment, and small-scale production, practised in the farms around the Mekong Delta using artisan methods. In the near future, all Vietnames farms supplying international markets must be prepared to introduce quality control systems, for example, Global GAP (good aquaculture practices).

Vietnamese seafood processing factories have already begun to diversify from first-hand processing to the development of value-added products. The Government has set targets (2015 and 2020) for the fishery sector to increase diversification and improve the output of specialized products from fisheries and aquaculture. To this end, the industry hopes to have a free tariff granted to import raw materials enabling it to run to full capacity â&#x20AC;&#x201C; currently not always possible due to a shortage of catch and farm material, given the limited farm-harvesting and fishing seasons in Viet Nam. Another area yet to be dealt with by the expanding Vietnamese industry is the matter of marketing, in particular branding and public relations. This is fundamental for the sustainability of Vietnamese products which need their quality and origin recognized worldwide. The different product segments of the Vietnamese seafood industry are examined more closely below, including the fishery, farms and processing plants. 3. PANGASIUS 3.1. The catfish miracle

No other farmed fish in the past 50 years has upturned the market like the pangasius catfish from Viet Nam. While it took Norwayâ&#x20AC;&#x2122;s salmon industry about 20 years to reach an output of over 1 million tonnes per year, the farmers in the Mekong Delta who put this native catfish in their waters created an aquaculture industry of over 1 million tonnes in only a decade. The statistics are staggering: pangasius export was trivial in 1995â&#x20AC;&#x201C;97, worth only USD 1.6 million in 1997. It had increased 17.22 times to 28 000 tonnes with a value of

USD 87 million by 2002, mainly targeting the United States market (14 797 tonnes, USD 35.48 million), which accounted for 61.64% of volume and 63.04% of value. Although Viet Nam’s share in the United States catfish market was less than 2 percent, the phenomenal growth led to many difficulties for Vietnamese producers in dealing with the United States, and they faced protectionism moves, including anti-dumping files and food safety barriers. Following the anti-dumping petition against Viet Nam pangasius filed by American catfish farmers, the pangasius producers looked to introduce the species to other markets, in particular EU countries; they were successful and significantly reduced their dependence on the United States market. Indeed, just 2 months after the United States Department of Commerce announced its verdict on the petition, Viet Nam’s pangasius producers were already able to fully resume production. Investment continued and business expanded with product diversification and market enlargement. Consumers all over the world got to know Vietnamese pangasius, and Europe is now the principal market. Pangasius production and export growth are the phenomenon of the Viet Nam fisheries sector at the beginning of the third millennium. 3.2. Native of the Mekong Delta There are 20 varieties of pangasius belonging to the Schilbeidae family. They live in the Mekong and follow the rivers from the highlands in Tibet down to the Cuu Long, the “Nine Heads of the Dragon”, as the Vietnamese call their famous Delta. Pangasius fish migrate and are one of the few “white” catfish. They were crossbred from two main family members by French scientists in an aquaculture development programme during the 1980s. Nowadays only two pangasius family members are farmed in aquaculture and sold on the international markets: •

•

P. bocourti (“Basa”) is a fatty fish that needs high oxygen levels in the water. It lives and is farmed in the upper part of the River Hau in the An Giang Province of Viet Nam. It takes 12–14 months to reach the harvesting size of 1–2 kg; for this reason, only a few hundred tonnes reach the export markets. P. hypophthalmus (“Tra”) is easier to produce than P. bocourti and accounts for the main part of production. It has less fat and grows twice as fast as P. bocourti. It also requires far less oxygen and can be farmed in greater densities. P. hypophthalmus used to be called P. micronemus. The above-mentioned French scientists renamed the species and reclassified it as P. hypophthalmus. It grows in just 6–8 months to the marketable size of 1– 2 kg.

The other 18 family members of the pangasius family do not play a part in the international market and are only used by local fisheries. Viet Nam’s pangasius farming adventure began 10 years ago. The pioneering province was An Giang. Initially, farmers had to buy juveniles from the Mekong River catch in Cambodia

to put into their farms. Today, they can stock their juveniles from about 50 modern hatcheries which deliver controlled juveniles to the farms that restock the ponds twice a year after the main harvesting periods. Harvesting takes place in March (at the beginning of the rainy season in the south) and in October (at the beginning of the dry season). It is important to harvest the fish at these times, as the temperature change in the water and the change in salinity – due to the flooding of the Delta – can cause diseases in the fish. There are significant differences in the reproduction biology of the two farmed species, P. bocourti and P. hypophthalmus. A female P. bocourti produces some 50 000 to 80 000 juveniles, a female P. hypophthalmus between 500 000 and 1 million. Farming P. hypophthalmus is far easier, has greater returns and is cheaper than farming P. bocourti. The majority of farmers therefore switched in 1998 to the more cost-effective P. hypophthalmus production; nowadays only 2 percent of production is P. bocourti, the remainder is P. hypophthalmus. 3.3. From rivers to ponds The farming method affects the quality of pangasius. There are three basic methods of pangasius fish farming: houseboats, river fencing and earthen ponds. Pangasius farmers began by building houseboats on the main rivers of the Mekong Delta, the River Tien and the River Hau. In the bottom of these houseboats they constructed simple wooden cages where they reared the fish, often using homemade feed of rice bran and soybean meal as the fish is 98 percent vegetarian (1–2 percent fishmeal needed adding). In later developments, parts of the river were fenced to create larger farming areas. Both these systems have now disappeared for two main reasons: •

•

Water quality is more easily controlled in earthen ponds than in open, ecologically unstable river waters. Waste pollution is reduced with pond farming as the ponds can be used, laid still, then reused once cleaned and sanitized.

As a result, large amounts of P. hypophthalmus are today farmed in earthen ponds comparable to the systems used in the United States catfish industry. Such ponds produce very stable quality, depending whether they are open to the stream or have inland freshwater sources. Pond farming is the most cost-effective method. Pangasius in ponds are always fed with dry feed pellets made from rice bran, soybean meal and some fishmeal coming from local catches. The feed has always been and still is produced by the farmers themselves and is given to the fish in a wet form. In ponds the farmers may also use other feedstuff that can produce different tastes in the fish. Dry feed floats and the fish can feed from the top of the waters; this avoids problems with the off-flavour (muddy taste) in the meat and the off-colouring (mostly dark pink and yellow) of the fillets.

Pangasius is harvested alive using draft nets, then transported by well-boat to the processing plants. Most ponds are situated near the production plants, with the cages located just on the opposite side of the river bank. 3.4. Pangasius processing criteria Good, quality-aware producers generally educate the farmers in how to raise and treat the fish, what feed to use and how to harvest. Long-lasting contracts are made to promote the exchange of technical support and experience. In some cases, producers own the supplying farms. Modern pangasius farming uses industrial pellet feed from major suppliers, such as the United States feed mill Cargill and others who have opened subsidiaries in Viet Nam. This fish is monitored by fully integrated traceability systems when being delivered to major processors. Viet Nam is currently installing the Global GAP system, implemented at the European Seafood Exposition (ESE) in Brussels in 2009 by a working group of seafood importers, including the Dutch companies, Anova and Seafood Connection. The fish supplied is normally unsorted, but the average weight of harvested pangasius is around 1.5 kg. The fish is always delivered from the farm or pond by tank ships or by live transporters on the road. On arrival, it is immediately slaughtered by cutting the gills and letting the fish totally bleed out in a stainless steel water basin. There are strict controls on the origin and the quality of the raw material. Modern processors in Viet Nam (e.g. Agifish in An Giang) have even installed pumping systems to empty the well-boats in an animal-friendly manner into their factories. The fish yields just 30 percent, which means that for every kilogram of pangasius harvested, only 300 g remain as usable export product. This means a large amount of off-cuts: the carcass and the other leftovers are used in part to produce fish meal; the skin is sold to the cosmetics industry; and the large quantity of fat can even be reprocessed to become biofuel for cars. The filleting process is as follows: •

•

Killing and first filleting takes place mostly in a separate part of the factory – the fish has a simple bone structure but a big fat pocket under the skin, which has to be cut off. The fish is sent on a conveyor belt to be washed in a tumbling bath and then goes on automatic skinning devices . Once skinned, the fish is trimmed by hand; the brown layer of fatty meat on top is trimmed and the belly flap (which can be quite large on the fillet) is cut away. The fillet is rinsed to separate the blood from the meat, then skinned.

•

Trimming then takes place. Under the skin of the fish there is a mostly dark red fat layer to be trimmed off, and the upper layers of the fillet are cut off. The belly is also trimmed off; what is left is a white or slightly rosé or sometimes yellowish piece of boneless meat. There are different ways of trimming and the amount of belly flap cut off the fillet can influence the price. A leftover belly flap of 1.2 cm is standard; alternatively, the fillet can be “fully trimmed”, i.e. the belly is cut off entirely. When cutting away the dark fat layer, the middle section around the vein through the middle of the fillet can become very weak: it is important to not overtrim to avoid the two parts of the fillet breaking apart. After trimming there is a light-table-control of the fillets to look for bruises or parasites; the meat can then be classified as suitable or not.

The most common sizes (calibres) of pangasius fillet are: • • •

120–170 g 170–220 g > 220 g

3.5. Colour system The fish is classified according to its general appearance and, once filleted and trimmed, also on the basis of its colour. An industrial colour scheme has been developed for pangasius fillets: • • • • •

White Light pink Pink Light yellow (cream) Yellow (cream)

The different pangasius colours have different markets. White is generally considered the premium cut fillet, but light pink is gaining a big market share as a decorative fish for the retail market. These two products are very successful in the supermarket business; retailers also tend to sell these products thawed, declaring them as “fresh”. While this may be a false declaration, it does have its logic: the freshly slaughtered catfish relaxes and goes through the stages of rigor mortis during the freezing process; this means that a pangasius fillet (regenerated as a thawed product) is fresher than sea catches sold as “fresh” (as in “non-frozen”) but which are often transported long distances before reaching the retail counter. Indeed it may be very difficult – even scientifically – to tell a thawed, regenerated pangasius fillet from a fresh one. This is one of the reasons that imports of “fresh” pangasius have not been developed. The long flight route of a fresh pangasius fillet from Viet Nam to the main markets in Europe cannot outdo a deep-frozen product shipped in 20- or 40-foot containers direct to the importer’s doorstep. Pink pangasius has developed a special segment in Italy, thanks to the marketing efforts of a Venice-based importer, Fiorital, who introduced it into the market. Its success lies in the red colour, which makes the fish look bloody and gives Italian consumers the impression that this

fish is freshly slaughtered; Spanish consumers share this preference. In southern European countries, the fish is called “panga”, and its hold on the market seems to be increasingly stable. Spain is one of the leading European markets for pangasius fillet from Viet Nam. Finally, the market for yellow or cream pangasius is concentrated in Asian countries, such as Singapore. It seldom reaches European shores, with the exception of the eastern countries, such as Russia and – to some extent in the past – Poland. However, they since tired of the cream-coloured fillets and Russian and Polish importers have reverted to mostly white pangasius. Poland is one of the major markets for pangasius fillets and currently prefers the white fish to any of the coloured pangasius fillets. In short, each shade of pangasius from Viet Nam attracts its own customers. 3.6. Supporting additives and glazing Phosphates are commonly used in pangasius fillet products. The treatment is legal in Europe, but limits are imposed (0.5% per kg fish weight). There are various effects: • • •

Water is drawn into the fillet resulting in significant weight increase. The fillet takes on a shiny appearance and a soapy consistency. The fish is firmer when steamed.

However, some segments of the pangasius industry tended to overuse phosphates combined with a high percentage of glazing, resulting in weight gain of as much as 30 percent. The markets complained and the industry changed the system for the better. Nowadays, so-called “non-phosphates” based on other chemical substances (e.g. citric acid) are often used and the negative effects reduced. Treatment with water-gaining additives and glazing is an important tool in the price war underway in the pangasius markets. However, the best quality products – mostly requested by leading supermarket chains – are untreated, free of both phosphates and non-phosphates. European legislation has a general tendency to stop these treatments as the public prefers natural and organic seafood products. Various freezing methods can be applied to pangasius fillets. IQF produces the best results: the fillets are placed on a conveyor belt leading into a spiral belt freezer, where they are individually frozen. The resulting fillets have a good, uniform appearance and can be packed easily into retail-market bags of 500 g or 1 kg. In plate freezing, the fillets are packed in cartons to be block frozen. The United States “candy wrap” system is sometimes adopted: the fillets are single-wrapped in clear foil, gathered in cartons and block frozen. This method can lead to deformation of the fillets. Glazing affects the quality (and the price). Glazing is the spraying of water on the pre-frozen fish, producing weight gain. A glazing of 10 percent is considered reasonable and the product is mainly fish, not frozen water. Anything over 10 percent – and there are very creative ways to add water to the fish – simply raises the water level to reduce the price.

3.7. Market statistics Pangasius is a highly successful product worldwide. There follows an examination of the markets and statistics from 2008 and 2009. Pangasius frozen fillet exports increased continuously over a 10-year period, with the greatest increase in 2008, when the exported volume was 65.6% greater than in the previous year, reaching 640 829 tonnes, accounting for more than half (51.8%) of the total volume of Vietnamese aquatic products. In 2008, the export value of the fish increased 48.4% over 2007, exceeding USD 1 billion for the first time in its history to reach USD 1.453 billion, accounting for 32.2% of the value of the total Vietnamese fisheries exports in 2008 and coming closer to the value of shrimp exports. Some economists predict that pangasius will become the most important species in Viet Nam, destined to bring a bright future to the worldâ&#x20AC;&#x2122;s seafood markets. As in the previous 3 years, in 2008 the EU was the biggest and most important market for pangasius, importing 224 311 tonnes (an increase of 29.8% on 2007), valued at USD 581.5 million (23.8% increase); but the EU share was only 40% in terms of value, and 35.0% in terms of volume, a clear decrease from 48.0% and 44.7% in 2007. Within the EU, the German market shows the fastest growth (increase of 61.5% in volume and 49.3% in value), reaching 41 959 tonnes valued at USD 110.838 million, to become the second biggest EU importer of pangasius, after Spain (46 237 tonnes and USD 121.863 million, increasing by 28.0% and 20.6%, respectively). Germany surpassed the Netherlands (33 278 tonnes, USD 91.996 million) and Poland (37 056 tonnes, USD 81.027 million). Russia was the top importer of pangasius in 2008, in terms of both volume and value. Viet Nam exported 118 155 tonnes (increase of 142.5% on 2007), valued at USD 188.454 million (109% increase), accounting for 18.4% volume and 13.0% value of total pangasius exports. Ukraine and some other Eastern European countries saw the fastest growth in 2008. Ukraine itself gained second place (after Russia) for pangasius imports. It imported 74 359 tonnes (223.4% increase on 2007), at a value of USD 137.256 million (249.0% increase), and shared 11.6% volume and 9.4% value of total pangasius exports. There is also rapid development in the Arabian markets, especially in the Near East and North Africa. In 2008, the fastest growth was in the Egyptian market: it imported 26 630 tonnes of pangasius fillets (increase of 324.6%), valued at USD 54.918 million (increase of 224.3%), accounting for almost 4% of total pangasius exports. Southern and Central American countries are importing increasing quantities of pangasius. The leading importer is Mexico, with 23 154 tonnes (61.6% increase) and USD 59.685 million (49.1% increase) (Dzung). In 2009, Viet Namâ&#x20AC;&#x2122;s pangasius found 24 new export markets, raising the total number of markets to 110. In the first half of the year, 206 000 tonnes were exported to a value of

USD 473.9 million and MARD declared that pangasius was the export item accounting for the highest proportion of seafood exports. Viet Nam’s main consumption market remains the EU, which consumed USD 206 million in the first 6 months of 2009. While the United States market poses difficulties, exports to this market still have a considerable growth rate: a turnover of USD 45.97 million in the first half of 2009, i.e. an increase of 59.98% over the same period in 2008. Experts have predicted that pangasius exports may reach USD 1.2–1.3 billion, i.e. much higher than the level previously predicted by VASEP at USD 1 billion (VNA). Pangasius has become one of the world’s major white fish sources; it is the only freshwater aquaculture fish that is annually discussed at the International White Fish Forum; the other industrial fish stocks in review all come from sea catches. However, it is imperative to examine just how pangasius found its the way into the market and reached such a prominent position. 3.8. A cheap substitute Pangasius made its entrance into the world markets mostly by compensating for the declining sea catches, in particular in Europe. When the first pangasius came on the European market 10 years ago, it was sold not as what it really is – a catfish from the Mekong Delta – but as other species, usually of higher grade sea catches, such as dover sole. On the German market, pangasius was initially known as Meereszunge, literally “sole from the sea”. It is not from the sea at all, but from the pond, and a lot of money was unfairly made from pangasius. The fish was later sold to substitute the declining black halibut stocks, for example, in Spain, where shortages of the sea flatfish led to the rise of pangasius on the market. Pangasius also stepped in when there was supply trouble with tilapia and Nile perch from Africa, not to mention in the face of cut-backs in haddock and cod, following which pangasius became the leading “fish and chips” fare in the United Kingdom. Throughout the world, pangasius continues to be widely sold under other names; only in Europe is there stringent legislation which makes it obligatory for traders and retailers to use “pangasius” or its Latin name, P. hypophthalmus. Elsewhere, confusion reigns when it comes to the name of this Vietnamese fish. Names used include “tra and basa catfish” or “hypo basa” (from “tra”, the most widely sold P. hypophthalmus, and “basa”, a variety of P. bocourti), “sutchi”, “panga”, “white river cobbler” and “US catfish”. In parts of the United States, pangasius was even sold as “white grouper”, retailing at over USD 45/kg. The fact that pangasius had no clear identity in the market and no recognized name benefited exporters and importers, who both made a lot of money from the fact that its origins remained in the dark. While high profits are made, pangasius is actually the cheapest fish protein in the market. One kilogram of pangasius landed in the market can be bought for between USD 1.80 and USD 3.50, depending on the trimming grade, quality of the fish, presence of phosphates, colour etc.

From the start, pangasius was at the centre of a fierce price war between Vietnamese exporters: they all offered the same product and had to carve a space in the markets by cutting prices. Only in Europe does pangasius now enjoy a more or less stable price situation: between USD 2.80 and USD 3 CIF (cost, insurance, freight) landed in the market. In the leading European discount chain, the fish retails at a record low of €3.49 for a 500-g bag. No cod or salmon – let alone a real dover sole – can match this price. Pangasius is destined to remain the low-price-fare, for better or for worse. One advantage is that it is a wholesome fish that targets and reaches markets which are mostly meat-driven. But the low price policy has its victims, and these are found at the bottom of the chain: the fish farmers. 3.9. The farmers The situation of the victims of the low prices of pangasius worldwide became clear when the highly reputed Mekong University in Can Tho published its pangasius-profit research. In 2007 and early 2008, the pangasius price exceeded the production costs, and farmers could therefore make a profit from farming. However, since the end of the first quarter of 2008, fish farmers have been selling fish below cost, and since the beginning of 2009, feed prices have been increasing, with serious repercussions for pangasius farmers in the biggest aquaculture areas in Viet Nam. It was estimated that some 12 000 pangasius farming families (90 percent of fish farmers in the Delta) were losing money. According to the region’s agriculture and rural development authority, the pangasius breeding area in 2009 was 3 690 ha (60 percent less than in 2008). Fish feed accounts for 85 percent of a farm’s expenses. A survey of 431 enterprises and farmers carried out in 2007/08 by the Can Tho University Mekong Delta Development Research Institute found that pangasius export profits were divided as follows: processors (78.5%), farmers (19.4%) and traders (2.1%). Since the second quarter of 2008, however, farmers have been selling pangasius at unprofitable rates (VNA). The cost per kg for the farmer up to factory delivery is about 15 000 VND (equal to USD 0.85 approximately). Once this price is reached, the farmer breaks even, makes a small profit and can restock the ponds with new juveniles. A fairer price is 17 000 VND (USD 0.95), easily endured by the industry if the price of the pangasius fillet landed in the markets rises to USD 3.50/kg. With 30 percent yield on the fish, the processors and the chain through to retail would still make a wholesome profit. The reality is another. At harvesting (i.e. twice a year), farmers must continue to empty their ponds, because of the temperature change that makes the fish vulnerable to diseases; they cannot stop feeding their fish even when the food conversion rate calculation shows that the fish are every day more expensive. In the face of these costs, farmers are constantly cut down by the processors with the off-farm prices. Prices as low as 13 000 VND are paid by the processors and the farmer makes a loss with every kilogram of fish sold. Here lies the fuel of the price cuts which permit the processors to compete with the importers.

There is only one farmers association in the main production area in An Giang (An Giang Fish Farmers Association – AFA); it is not very strong and is highly dependent on the good will of the processors. The farming community, comprising mainly family-run farms and some bigger investors, suffers as a result and the whole industry is vulnerable to a lack of raw material for the processing plants, some of which run to 30 percent capacity as there is no fish available to fill the lines. 3.10. Farming and processing What is needed is a fair deal for the farmers through the introduction of a minimum price regulation. MARD has recommended a minimum price regulation but it has been poorly enforced to date. Processors with a responsible market approach make contracts with the farmers to guarantee prices. Many processors own the farms, for example, Agifish, the Nam Viet Company and To Chau. What is needed is clarity: correct and transparent naming and a generic marketing strategy for this important and original product from Viet Nam. There must be commitment to a responsible chain of farming and processing in the future. Positive changes are underway: Global GAP and traceability legislation for every kilogram from the pond oblige the processors to adopt an integrated system from the egg to the finished product in the container. The outlook for the Vietnamese pangasius industry is comparable to the worldwide salmon industry (e.g. Marine Harvest), in that a farmer runs his own farm as an employee of a globally operating pangasius supplier. At the beginning of 2009, the dumping case in the United States was relieved, and selected Vietnamese processors (e.g. QVD and Bianfishco) could enjoy lower tariffs when exporting to the United States. Pangasius thus returned to the map of the United States seafood business. However, the United States catfish farmers have not given up in their attempt to kick the unloved Vietnamese competition out of the market. They are now lobbying to rename pangasius “catfish”; it would thus fall under the United States Farming Act that allows comparable imports only when the same – United States style – farming and processing methods are adopted. Once this legislation is passed, pangasius would finally be wiped off the United States market as no Vietnamese pangasius industry could ever match the farming and processing methods of catfish in the United States. The United States catfish farmers do not have the capacity to satisfy the domestic market demand for catfish, and in some areas pangasius from Viet Nam is actually preferred to United States catfish. What is certain is that pangasius is here to stay. It will take an increasing share of the expanding world seafood market as sea catches are under increasing pressure. For now, pangasius remains a Vietnamese product, but other countries (e.g. Cambodia, Thailand, Malaysia, Philippines and Africa) are looking into the success of pangasius and

preparing to compete with Viet Nam for the market share. The Spanish global seafood giant, Pescanova, has already announced its plans to build up huge pangasius farming in Mozambique and other African countries. It will become essential for the Vietnamese pangasius industry to change its policy of low prices and to create a genuine long-term strategy of honest product information and reliable, sustainable and socially aware quality. The “catfish miracle” could then become a longlasting, profitable wonder. 4. SHRIMPS 4.1. Tigers and vannamei Shrimp is the major species farmed in marine and brackish waters. Black tiger and white shrimp, and more recently vannamei, generate the highest export value for Viet Nam. Viet Nam’s shrimp export sector is run by major (often global) operating processors, such as Kim Anh or Minh Phu at the tip of the Mekong Delta; in Ca Mau, shrimps are mostly sold as commodity products. Vietnamese shrimps have yet to establish a generic brand image of their own and are dependent on the stock market like the rest of the international shrimp supply, dominated by strong comeptition and fierce price battles. Vietnamese shrimps are sold deep-frozen, as are shrimp products from the competing countries, and, as in competing countries, black tiger has been the dominant variety for decades. White shrimps and white-legged shrimps (vannamei) are gaining market access, because they are cheaper to farm. Frozen shrimp is the most important commodity in Vietnamese aquatic products exports: volume of 191 553 tonnes (18.8% increase on 2007), worth over USD 1 625 billion (7.7% increase), accounting for 36.1% of the total value of aquatic products exports, although only 15% of the total volume of aquatic products shipped (Dzung). So Viet Nam’s shrimp processors are divided into those who contribute to supplying a price competitive commodity market and those who offer high-end value-added products, mostly to the Japanese market, for example, Cafatex in Can Tho or Ut Xi.2 4.2. Rice and shrimp: mother and child Viet Nam has a long tradition of shrimp farming, linked to the rhythm of the tides and rice cultivation in the Mekong Delta. The same goes for other regions, where shrimp fishing, collecting and farming are part of daily life in coastal and often rural communities. Shrimps are common throughout Viet Nam, and are farmed in the south, centre and north. A Vietnamese proverb says: “Rice and shrimp are like mother and child.”

Ut Xi is referred to later as it is a very good example and blueprint of how the whole Vietnamese shrimp industry could successfully mature in the future.

For years shrimps were an extra crop of the Vietnamese rice farmers who collected the valuable catch from their flooded fields after the rice had been harvested. This practice continues to this day in the Mekong Delta with Macrobrachium Rosenbergii, commonly known as giant freshwater prawns or rosenberg shrimps. Rosenberg shrimps are farmed mainly in ponds, lakes, paddy fields or water channels in various improved extensive, intensive or industrial farms in the Mekong Delta. The harvest season is from December until February. The prawn grows to 320 mm and 120 g. There is a good market for the whole frozen or tail-only product in the United States; they are sometimes flown out fresh to special markets, such as high-end department store outlets in Germany, France and the United Kingdom. Like black tiger and other marine shrimps, it is also processed into a variety of high-value products. There is a tradition of gathering and rearing shrimps in Viet Nam. This developed to the farming of shrimps when the Government allowed lower-yielding paddy rice fields to be used as shrimp farms. Farmers harvest as much as 1.3 tonnes of shrimps per hectare of rice paddy and 700 kg of shrimp eggs per harvest. These shrimps can fetch over 120 million VND (approximately USD 6 600); if rice were planted on the same ground, the revenue would be only 7 million VND (approximately USD 390). Shrimps are farmed all over Viet Nam, but the biggest area for shrimp farming is at the tip of the Mekong Delta, in the province of Ca Mau. In this tidal area, where the Mekong meets the sea, thousands of channels and small river estuaries allow a very natural shrimp farming operation; water is available in abundance and concrete ponds are not required to raise the crustaceans to market size. The Ca Mau area is flooded during the rainy season bringing freshwater in abundance. Furthermore, the natural rhythm of the Mekong, flowing “backwards” once a year as the seawater presses inland and floods the fields, means a good supply of brackish water allowing shrimps to grow well all year round. For this reason, Ca Mau is home to the major Vietnamese shrimp suppliers and some 60– 70 percent of black tiger production takes place in Ca Mau. Next in importance is the centre of Viet Nam around Nha Trang, Binh Dinh and Da Nang. In particular, the Cam Ranh peninsula is renowned for black tiger shrimps, where the shrimp farms are located at the seaside, where freshwater comes from the mountain streams and from the short 3-month rainy season. The shrimps grow naturally to their full size; the ponds are emptied during the winter months of November, December and January, limed and left to allow any bacteria to be killed by the strong sun, and then refilled and restocked mostly in March. Cam Ranh shrimps have a very strong colour when cooked. For all shrimps, in particular black tiger, quality improves when the salinity in the ponds is higher: the meat is firmer, the colour of the “black” tiger darker and, when cooked, redder and therefore more attractive.

The seaside shrimps are superior in quality to shrimps grown under more freshwater conditions. On the other hand, farmers prefer freshwater in the ponds as the shrimps reach market size more rapidly. The supply of juveniles for farming is secured by more than 5 000 shrimp hatcheries all over Viet Nam, of which 60 to 70 percent can be found in the Mekong Delta, the main production area. Most up-country coastal provinces farming shrimps have small numbers of local hatcheries. Annual shrimp larvae production (mainly Penaeus Monodon) is over 25 billion per year. A major trading network moves shrimp seed from the central hatcheries to coastal areas all over the country. The hatcheries are controlled by Nafiqad (World Bank Report). 4.3. Extensive farming systems Average shrimp farming production increased from 3 tonnes/ha (and crop) (1995–2000) to 4– 4.5 tonnes/ha (2000–08). Industrial shrimp farming has a high productivity of over 8 tonnes/ha. Frozen shrimp exports increased from 86 000 tonnes in 2000 to 160 500 tonnes (value of USD 1.5 billion) in 2007; the figure increased yet further in 2008: over 163 000 tonnes to a value of about USD 1.37 billion. Most frozen shrimp products for export are black tiger and white shrimp, and more recently vannamei. These three species all have rapid growth and are farmed in brackish-water ponds in high and medium tide areas. After 3 to 4 months, the average harvest size is 40–50 g, while the length of an adult female shrimp reaches 220–250 mm. The harvest is from April to September; highest production is in May, June and July. Average productivity is between 6 and 7 tonnes/ha. The shrimps are processed into various value-added products and exported as IQF products, frozen blocks, semi-blocks or semi-IQF. Other marine shrimps, such as prawn, pink shrimp and cat tigers, are caught and processed for export. The marine shrimp catching season is from February to November. The meat has a pleasant and delicious flavour and high protein content. Marine shrimp is mainly small and medium-sized, and is usually processed into value-added products and dried shrimp products for export and domestic consumption. The figures for shrimp harvests in Viet Nam are a long way from those of intensive shrimp farming. Viet Nam’s shrimp farms are not yet industrialized – a sure benefit from an ecological point of view, as many livelihoods are secured and the conditions of the shrimp farming regions conserved. While there have been some global cooperations (with foreign investment from Thailand) creating hi-tech industrial shrimp farming sites for intensive farming, in particular in central Viet Nam, they remain the exception and not the rule. There are some projects in Ca Mau for small-scale ecological shrimp farming; the policy is to keep Vietnamese shrimp farming ecofriendly.

To date, Viet Nam has not suffered an outbreak of white spot disease on the farms, and medical treatment and chemical use is moderate. A ministerial “black list” exists, naming enhancers, medical and chemical compounds which are not allowed in shrimp farming or other aquaculture operations. Viet Nam law is quite strict when it comes to use of chemicals and fertilizers. Despite Viet Nam’s policy of extensive, ecofriendly and chemical-free shrimp farming, a risk was taken with the introduction of vannamei shrimp. Although not native to Viet Nam, it was placed in the farms as it can be produced at a lower price than tigers. However, vannamei shrimps have caused a lot of trouble in the international shrimp farming community as they are vulnerable to white spot. The water temperature in the Vietnamese farms is far too high for vannamei and national and international biologist consultants and scientists have warned the shrimp farmers about placing vannamei in farms too far south. Stocks farmed there are under stringent supervision and strict control, but the last word has not yet been spoken. 4.4. Shrimp processing The demand for uniform sizes in the international shrimp markets means that most of the Vietnamese shrimp processors use middlemen. The brokers collect the harvest in bulk from the farms, sort into sizes and sell them to the industry. This system can cause problems with regard to the traceability of raw shrimps in the factories, but it cannot be easily changed. Some of the major shrimp suppliers have organized their own farms and partly supply production from their own stock. It is therefore easier to control processed products from the source and this is a direction that could be increasingly taken in the future. Shrimp processing is one of the most modern and well-equipped industries in Viet Nam. State-of-the-art equipment is installed, although some of the processing steps are still very much dependent on manual labour. The shrimps are transported in bulk to the factories, where they are sorted and classified before being IQF or block frozen, or very often further processed. Vietnamese shrimp processing takes place under hygienic conditions, a model to be followed everywhere in the world. These standards were set initially by Viet Nam’s main shrimp customers: the Japanese buyers, who influenced the high standards of the whole processing industry. A good example of a shrimp processing company is Ut Xi, literally “Little Sister Xi”. The little sister did exist: an orphan child who collected shrimps from the paddy fields during the war between Viet Nam and the United States and sold them on regional markets; when the war ended in 1975, she became an entrepreneur and opened the first farm and processing plant for shrimps. Ut Xi expanded to become an empire and now runs its own farming operations with high ecological standards established long before talk of green products began. The Japanese customers helped to install one of the most modern and stringently controlled seafood factories in all Viet Nam.

Most of the shrimps processed for the Japanese market are cut, de-veined, de-shelled (in part or completely). Even the three tail segments are sometimes neatly trimmed to give the special appearance demanded by the very picky Japanese customers. Added value is daily practice and all kinds of special cuts and sizes, cooked, breaded or coated with all kinds of tempura, are regularly supplied. Ut Xi is a model of internationally accepted business born from shrimp collecting in the paddy fields. Other companies have found their way into the market: Camimex in Cam Mau supplies “bio” shrimps to Swiss supermarkets, such as Coop; Cafatex supplies big-sized shrimps collected during the year to interested European markets. Box 1 contains a selection of Vietnamese shrimp products, including advice on how to read the special shrimp business language. Box 1 Examples of shrimp products from Viet Nam

Black tiger •

•

Head-on shell-on (HOSO) Headless shell-on (HLSO) Head-on shell-on frozen semi-block Raw HLSO block Raw skewered peeled tail on (PTO) Raw peeled & de-veined tail-on (de-veined = string-gut taken out) Breaded PTO Nobashi black tiger (nobashi = Japanese style, the shrimp is stretched) Butterfly PTO ring (butterfly = the shrimp is cut open and pressed flat) Sushi ebi fry (Japanese style, the shrimp is breaded and pre-fried in batter) Cooked peeled & de-veined tail-off Cooked peeled & de-veined tail-on

White shrimp •

•

Headless shell on Raw peeled & de-veined tail-off Raw peeled & de-veined tail-on Peeled & de-veined HLSO based (based = in glazed block form)

Courtesy of Minh Phu Company

4.4.1. International shrimp trading The main forms of presentation are: head on shell on (HOSO); shell on (SO); peeled tail on (PTO); peeled un-deveined (PUD); peeled and de-veined (P&D); butterfly tail on (BTTYTO). Sometimes a letter “F” is placed in front of the abbreviation in order to state that the shrimp comes from a farm (e.g. FSO = farm, shell on). European and Asian markets prefer HOSO (i.e. whole shrimp), while the American shrimp market prefers the other presentations. Shrimps are graded according to their count per weight. HOSO shrimps are graded in units per kilogram (e.g. 30/40, 40/50, 50/60 pieces/kg).

The standard pack is: 2 kg per box, 10 boxes in a master carton. The remaining presentations are graded in units per pound 3 (U15, 16/20, 21/25, 26/30, 31/35 etc. pieces/pound). The standard pack is a 5-pound box, 10 boxes in a master carton. The numbers in the grading code indicate maximum and minimum quantity of pieces per unit weight; “U” stands for "under" (Wikipedia). The so-called “counts” of the shrimps (basically the sizes) can change significantly when the product is soaked in phosphates and extensive glazing used. The lower the count, the more valuable the product. For example, 16/20 (i.e. 16–20 shrimps in one pound or pack) costs more than 41/50. With soaking and glazing, smaller shrimps can be upgraded to bigger shrimps and the count changed. An informed buyer enquires about the dripped count – i.e. what is in the block or pack after thawing or before the shrimps have been treated and frozen. 4.5. The market for shrimps from Viet Nam The fortunes of the Vietnamese shrimp industry in the market are conditioned by the shrimp demand in the principal markets of Japan, United States (where shrimps are actually the most consumed seafood with an annual per caput consumption of more than 1.8 kg) and Europe. However, in these markets, shrimps are not always considered “seafood” or even part of the fish market. They are used as an industrial raw material for further processing or for use in convenient frozen food items, such as pizza. It is very difficult for a supplying country like Viet Nam to get its share in the profit made from shrimps in the export markets. The industry is forced to keep prices low and competition is worldwide, not only next door. 4.5.1 Development since the 1980s Frozen and value-added products from farming dominate shrimp and prawn exports. Captured shrimps are mainly dried or added value; farmed shrimps tend to be large in size and uniform in quality. The shrimp farming subsector makes a significant contribution to Viet Nam’s seafood exports, and in the 1980–90s, the black tiger was mostly exported to Japan at low value in block frozen form. In the mid-1990s, seafood processors vigorously embraced new processing technologies, installing processing lines and applying modern production management systems in order to meet the product category and quality requirements of target markets such as the EU, United States and Japan. By 2003, Viet Nam had gone from being a nameless shrimp exporter to the supplier of 60 countries and territories. The United States and Japan together account for 70 to 80 percent of the Vietnamese shrimp export volume. Japan’s share in shrimp export value fell from 60 percent in the 1980s to approximately 40 percent in 2005, while its volume and value continued to increase. In 2008, Japan was still Viet Nam’s biggest shrimp importer with a volume of 58 533 tonnes (30.56% of total shrimp exports) to the value of USD 498.914 million (30.69%). 3

1 pound = 0.453 kg.

In 2003, Viet Nam became the fourth biggest seafood exporter to the United States and the second biggest shrimp exporter with a volume of 52 300 tonnes and value of USD 513.83 million. The shrimp anti-dumping case reduced Viet Namâ&#x20AC;&#x2122;s share in the United States and in 2004 the countryâ&#x20AC;&#x2122;s shrimp exports to this market declined in terms of both volume and value to 37 000 tonnes (29.12% decrease on 2003) and USD 397.7 million (22.59% decrease), respectively. Following the shrimp anti-dumping case, Vietnamese producers quickly shifted their target to other markets. Nevertheless, the United States still ranked second among shrimp importers from Viet Nam until 2008 with a volume of 46 829 tonnes (24.45%) and value of USD 467 279 million (28.74 %) (Duong). The Vietnamese shrimp industry aims, on the one hand, to diversify the product range and on the other, to become more competitive in the mass, price-dominated markets. A way around problems is always found as the industry continues to grow, developing along two lines: One sector builds ever bigger processing plants, installing more technology to compete successfully by cutting costs to achieve a more competitive situation in the world shrimp commodity market. Another sector specializes in increasing the range of value-added products and seeking out niche markets, for example, ecologically grown shrimps (a segment still in its infancy in Viet Nam) or hand-made products that can be sold individually, such as certain kinds of torpedo shrimp (extra large, stretched, tail on, breaded with high-end breadings, pre-baked and then sold to foodservice and sushi bar chains in Japan). 4.5.2 Market access in 2008 The two biggest markets for Vietnamese shrimp in 2008 were Japan and the United States. Japan imported 58 533 tonnes of shrimp, worth USD 498.9 million, taking 30.7% value of Vietnamese exported shrimp and almost maintaining the 2007 level, increasing only 3.8% in volume and 1.4% in value. With a share of 28.7% of total value shrimp exports, the United States took second position, importing 46 629 tonnes valued at USD 467.279 million â&#x20AC;&#x201C; an increase of 15.3% in volume but a decrease of 3% in value compared to 2007, i.e. clear evidence that the average price of Vietnamese shrimp in the United States market in 2008 was lower than the year before. With a volume of 32 727 tonnes valued at USD 234.231 million, sharing 14.4% of total shrimp exports, the EU took third position after Japan and the United States, but the EU markets showed the greatest increase in imports of shrimp from Viet Nam. In comparison with 2007, EU imports increased by more than half (51.1%) in volume and almost half (47.6%) in value. Within the EU, Germany was the biggest market (8 404 tonnes, > USD 64 million) with the highest development (+63.5% in volume, +59.4% in value). It was followed by Belgium and France, which each imported more than 4 000 tonnes valued at over USD 30 million, confirmation of the continuing trend of the EU markets to increase shrimp and prawn imports from Viet Nam.

In the Republic of Korea, development was similar to that in the United States shrimp market, increasing 17.3 percent in volume to reach 12 187 tonnes, but due to lower prices, the value remained almost at the same level as 2007, increasing by 4 percent to reach USD 84 997 million. China (including Hong Kong) showed the fastest increase (+32% in volume, +33% in value compared to 2007) to reach 6 050 tonnes and USD 48.9 million, despite a decrease in imports to Hong Kong (–10.5% in volume, –13.1% in value). Taiwan Province of China also saw fast development (+31.6% in volume, +21.3% in value), reaching 10 132 tonnes and USD 65.684 million, i.e. more or less the same level as Germany. A further success of 2008 is that, in the face of arduous market conditions caused by world finance and the economic crisis, Viet Nam diversified the markets for its shrimp products, reaching an increasing number of new markets, with sharp increases in shrimp exports to those markets: +112% in volume, +86.1% in value. The overall picture of Viet Nam’s shrimp exports clearly shows the impact of expanding vannamei farming in Viet Nam and of the increasing trend of smaller size shrimp consumption (Dzung). 4.6. Investing in shrimp’s future There is still much to gain in this industry as can be seen with the Minh Phu Cooperation, the current leader of the Vietnamese shrimp giants. In summer 2009, the company began to construct a fourth plant capable of processing some 20 000 tonnes of shrimps in the province of Hau Giang. By the first quarter of 2011, when this huge complex will be finished, some USD 22.4 million will have been invested. The new premises will provide 10 000 jobs and the company plans to generate an annual turnover of USD 180 million. Mainly local shrimp material is to be used for processing. Between January and July 2009, Minh Phu exported 7 300 tonnes of shrimps – a growth rate of about 20 percent compared to 2008. Cam Ranh Seafood, one of the major shrimp suppliers in central Viet Nam, is also adding a brand new processing plant to its portfolio, investing some USD 7 million and creating 1 200 jobs. 4.6.1 Shrimp exports in 2009 (Jan.–Jun.) During the first 6 months of 2009, Vietnamese exporters sold – in spite of the global financial and economic crisis – frozen shrimps to a value of USD 589 million – a drop of only 4.7 percent compared to 2008. The increase in volume pushed the total export volume of shrimp up by 1.8 percent to 72 288 tonnes in the first half of 2009 compared with the same period in 2008. Shrimp exports to the EU in June showed a sharp increase of 65 percent in volume to 3 728 tonnes and 48.6 percent in value to USD 24.4 million. After 3 months of declining

shrimp exports from Viet Nam to the United States due to the global economic crisis, exports picked up in April and experienced a double-digit growth rate by the end of June. In the first 6 months of 2009, Viet Nam exported 15 191 tonnes of shrimp to the United States, earning USD 147.3 million, an increase of 18.3 percent in volume and 2.1 percent in value over the same period in 2008. China has become a key market for Vietnamese shrimp: the volume exported increased rapidly from early in 2009 (VNA). There is still great potential for shrimps from Viet Nam. The challenge lies in branding and marketing to increase awareness of these catches from seas, farms and rice fields to make them the preferred choice on the international seafood market and with consumers. 5. WATER FARMS

Viet Nam’s aquaculture – water farm production at sea and inland – has seen great development in all freshwater, brackish water and marine water bodies, maintaining a climate of sustainability, environmental protection and harmony with other economic sectors. Water farming takes place almost everywhere in Viet Nam – ashore and inland. Inland lakes and streams are used for small-scale farming of carp and other freshwater species. A close connection exists between inland fisheries and semi-aquaculture, often practised in ranching systems; the juvenile fish or larvae are caught in the wild and then reared and ranched until they reach marketable sizes. The methods and species used are too numerous to list. The majority are for regional and domestic use: Viet Nam has large fish markets and a large part of the aquaculture is simply meant to serve the local markets.

This section looks at examples of semi-industrial and industrial farming and ranching methods adopted for grouper, barramundi, cobia and tilapia, as well as spiny lobster, oysters and clams. Vietnamese fishermen do not always make a distinction between fishing and farming. Juveniles are often caught, landed alive and reared to become market size fish (e.g. in grouper and spiny lobster farming). Viet Nam, with its abundance of water sources, is one of the leading inland and marine aquaculture nations in the world, destined to become even more so, as the area under aquaculture and also aquaculture production are constantly increasing:

1980 1990 2000 2008

Area (ha)

Production (tonnes)

230 000 491 700 652 000 1 030 000

300 000 1 480 000 2 450 000

Aquaculture is strongly encouraged by the Vietnamese Government and the industry board, not only for commercial but also for structural and socio-economic reasons, as the following quote from the VASEP report states: Aquaculture brings a big contribution to the national socio-economics. More than 5 million people live in tidal areas, swamp and lagoon areas of the 28 coastal provinces and cities plus the millions of farmers have created a considerable labour force for the aquaculture sector. Further, many capture fishers are also moving to the aquaculture and agriculture sector due to the decline in capture fisheries opportunities. Aquaculture production is mainly a privatesector activity, carried out by households and farms. New forms of collective aquaculture have recently been initiated in Viet Nam, for example in Ben Tre Province. Limited liability companies, foreign invested joint ventures and state-owned companies carry out the supply services such as seed, feed and technical services. (Dzung) Forms of cage and raft culture at sea are popular with high-value species, such as grouper, cobia, amberjack, red snapper, seabass, spiny lobster and even pearl oysters. The most important provinces for marine aquaculture are Quang Ninh, Thua Thien Hue, Khanh Hoa, Phu Yen and Ba Ria-Vung Tau. There are currently 30 fish species of high economic value farmed in floating and fixed cages and rafts. 5.1. Cobia The latest newcomer to Vietnamese marine aquaculture is a fish, branded by international experts as the “salmon of the future”: Rachycentron candum, known by fishermen and highsea anglers around the Pacific as “cobia”. Modern high-sea cages – referred to in Norwegian salmon farming as “polar circles” – capture this fish whose pearl white meat is used in the sushi and sashimi bars of the United States and Taiwan Province of China. The Taiwan Province of China-based company, Nha Trang Pearls, established a 950-ha sea farm off the coast of Kanh Hoa, province of Nha Trang, the famous holiday resort. The spot chosen was a sheltered bay lying between a natural island and the coast – ideal for cobia farming. The company (that already farms 1 000 tonnes/year of cobia in its own territory) invested USD 5 million to build this farming centre off the Vietnamese coast. Current 27

production in Viet Nam is about 600 tonnes/year, but they aim to reach a harvest of 20 000 tonnes in the coming years. Vietnamese aquaculture has included cobia for some years, using mainly the ranching method. That means small fish are put into farms and grown to market size (6–8 kg). The farms are found in the fishing areas of Vung Tau, in Kanh Hoa and Bin Dinh provinces, central Viet Nam, and around Hai Phong. The density in the cages is comparable to salmon farming (i.e. 14–16 kg/m3 water) and the fish are fed with pellet feed based on fish meal and fish oil. Cobia needs 2–3 kg of feed to grow 1 kg of meat. Nha Trang Pearls began farming in Kanh Hoa using brood stock brought from Taiwan Province of China and the juveniles were placed in the farm. Today the company has its own brood fish in Viet Nam. The 200 cobia parents – some as big as 40–50 kg – reproduce in Vietnamese cages, the eggs are collected and hatched. The cobia delivers a pearl white fillet that is very versatile. It has no pin bones, is easily cut from the carcass and may be used skin on or skinless. The loins are usually sold for the sashimi business. Fresh and frozen, it is exported principally to the United States and Taiwan Province of China. Cobia has a relatively high fat content of up to 20 percent in the belly; the back down to the tail is also fatty, but less so. It is suitable for smoking, can be used as a fat fish, and is ideal for rice balls in sushi and sashimi outlets. The price is high compared to other white fish. The whole round fish is sold for about USD 4/kg, fillets for USD 8 and a good cobia loin can go for up to USD 12 landed in the markets. 5.2. Grouper and barramundi Grouper farms are located in central Viet Nam around the coastline of Kanh Hoa, province of Nha Trang, and further south. Grouper juveniles 9–12 cm long are caught by Vietnamese fishermen and placed in the farms where they reach some 6–8 kg after 14 months. Reproduction takes place naturally: the fish are put in tanks at 23–26°C and they spawn without any human interference; the fertilized eggs are then collected and hatched out. Groupers are very valuable but very difficult to farm and so hardly used in the industry. Production is not sufficient to to serve distant markets, so most groupers are transported live to Hong Kong, where they reach prices of USD 50/kg. The fish is packed and cooled and the trip to China takes only 2 hours by the plane. Hong Kong is an important market for Vietnamese top-end sea-reared aquaculture products, as many Chinese consumers are prepared to pay high prices for fresh seafood. Indeed, the Asian consumer market for high-end quality products is becoming bigger and more profitable every year. An article dated October 2009 about the eating and drinking habits of China’s billionaires and “Nouveau Riche” states:

At the lavish Baroque Style Lan-Club dreamed up by the French design darling Philippe Stark revelers – all of them Chinese - are not exactly suffering: The restaurant best bottle of Cognac goes for USD 5 400, a 1995 Château-Lafitte cost USD 3 650 and a platter of fresh shellfish goes for USD 775. (VNA) Barramundi farming also exists on a small but increasing scale. The fish is supplied by Australia, farmed in Viet Nam, and then exported to Australia as “Australian” barramundi. Barramundi (Lates calcarifer) offers great potential for Vietnamese aquaculture, as it has a high-end image in the markets, yet can be farmed at reasonable prices of around USD 6/kg off the farm. Both grouper and barramundi are destined to become more important for Vietnamese seabound aquaculture. They offer new and interesting opportunities to serve the international markets at better conditions and prices. 5.3. Spiny lobsters and oysters Spiny lobster farming is highly developed, mainly in the provinces of Khanh Hoa and Phu Yen. The farming operations – totalling around 1 000 along the coast – are for the main part carried out by fishing households as a second crop and therefore tend to be small. Popular farming species are Panulirus hormatus, P. stimpsoni and P. longipes. Spiny lobster live mainly in warm water areas of Viet Nam. Small size juveniles are caught in the wild and then farmed in netting cages for about 12–18 months. Spiny lobster feed comes mostly from by-catch of small pelagics or from green-shell mussels grown by the fishermen for this purpose. Average productivity is about 45 kg per cage. Each farming household harvests an average of 50 tonnes/year of commercial spiny lobster. The spiny flower lobster is regarded as the “king of seafood” because of its high nutritional value. Its meat is firm, leathery and sweet-tasting. Spiny lobster roe is fatty, sweet-smelling and has a high protein content. It is farmed at sea mostly in central Viet Nam in Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan and Binh Thuan provinces. Spiny lobster is usually destined for export, the biggest markets being Japan and China, where they are transported by air in a state of hibernation. The live spiny lobster is cooled to around 2°C, at which point circulation slows down to hibernation. The crustacean can thus survive until it is ready for “revival” to be sold on the market as “live” spiny lobster. From north to south in Viet Nam, there live about 21 oyster species, including high economic value and large-size species, such as Crassostrea rivularis, C. belcheri, C. lugubris, C. echinata and Ostrea cucullata. The market for spiny lobsters and oysters is similar to that for groupers. They are sent mostly to the specialized Asian markets right on Viet Nam’s doorstep. Live spiny lobsters and live oysters delivered fresh from Viet Nam’s oyster beds sell for high prices in China, Korea and Japan.

Mollusk farming in general can bring both large product volume and high profits. Clams, abalone and scallops – all species of high economic value – are farmed in near-shore marine areas. There are two main species of white clam in Viet Nam and both are destined for export: Meretrix lyrata (hard clam) and M. meretrix (Asiatic hard clam). Clams are concentrated in big river estuaries and coastal areas in Can Gio (Ho Chi Minh City). To date, clam farming has developed rapidly along coastal sea banks in the provinces of Tra Vinh, Tien Giang, Ben Tre and Soc Trang. Average annual production is estimated at 60 000 to 80 000 tonnes/year and productivity is 30 to 50 tonnes/ha. The harvesting season lasts from February until May. Clam farming technologies with rafts and trellis (danf) were first introduced in Viet Nam in the 1970s through to the early 1980s. Seeds were mainly collected from the wild to be introduced for farming in suspended trellis and rafts. More recently, Viet Nam has become capable of producing its own clam seeds. Commercial farming of clams on an industrial scale was boosted by the introduction of pole farming technology: clam quality was upgraded, commercial value enhanced. As technologies have improved, annual production has gradually grown from 20 000 to nearly 50 000 tonnes/year. Clam provides important export income for provinces in southeast Viet Nam. 5.4. Clams Viet Nam’s white clams (or mussels) are harvested on the southeast coast of Viet Nam in the Mekong Delta in the peninsula of Ben Tre – famous in Viet Nam for its coconut trees and the production of coconut products. These 35 000 ha, however, are an aquaculture treasure chest on the coast of the islands of Ben Tre which form the Delta of the River Tien. White clams are grown on about 14 000 ha of these shores. The mussel beds are strictly controlled by Nafiqad to maintain standards of hygiene and water quality. International standards exist for shellfish farming. There are three categories: A, B and C, and Ben Tre is grade A, which means that the mussels and clams can be used without purification. Grades B and C require rinsing and cleaning of the shellfish, or even the use of ultraviolet light to purify the products before processing. In B and C regions of Viet Nam, mussel farming is not allowed and no certificate may be issued. Every farming area must be checked individually; any problems revealed in the test results lead to immediate closure. Nafiqad must give the go-ahead for mussels to even reach the processing premises. Producers must provide proof that they are processing shellfish exclusively from areas classified as clean by Nafiqad.

Clams grow predominantly in the shelf regions opposite the coast. They live in brackish waters with a good mix of freshwater and saltwater. Brackish water is especially found in the Mekong Delta as the region is flooded several times a year (mostly during the rainy season); there is, therefore, a good mixture of freshwater and saltwater also along the coast where the clams grow. The juvenile clams are collected and placed on special clam beds where they grow for 18 to 24 months. The clams stand on the seabed with their shells open and the sea brings them plankton and other small animals which pass through their wide open shells providing the necessary nourishment. The mussels are harvested according to the lunar calendar, and the tides are crucial to the rhythm of the harvesting. Low waters are necessary to be able to dig the clams from their beds, so the harvest takes places from the 30th to the 10th and again from the 15th to the 25th of each month. The clams are closed in the low waters; safely sealed, they are transported live to the processing premises. Clams are dredged from their beds. This is done with a kind of underwater plough dragging a net. The net collects the mussels that are dug out of their beds by the plough or dredge (as the fishermen call it). The nets are then lifted on board the harvesting ships where they are emptied. A first sorting takes place through the mesh-sizes of the nets used for dredging so that only sizes ordered by the processing plant are actually landed. The clams are sorted by size: 20–40, 40–60 and 60–80 pieces/kg. This is how they reach the markets when sold as whole clams pre-cooked in-shell. Before the clams can be processed they are put back in the water. Unloaded from the ships, the clams are placed in tanks and surrounded by bubbling water full of oxygen and containing a maximum of 3 percent salt, so that they open and any remaining sand comes out. After 6 hours of bathing the clams are sorted once more. Broken shells and other damage are detected and these clams removed. The clams are then rinsed again and placed on the cooking line which takes them, after boiling, right into the factory. The clams are shock-steamed, at about 100°C for 3 minutes, then they are ready to go. After steaming, the water extracted from the shellfish is collected, frozen and sold as a valuable mussel broth to the Japanese market. The mussels are ready to be processed and sold as different products to the various world markets. Most of the clams from Viet Nam go to southern Europe. The clams of Ben Tre sell best to Spain, Portugal and Italy, but also to the biggest European mussel market, Belgium, and to the Netherlands and France. In the factory, the cooked product is cooled down immediately. Wet ice is used to maintain a low temperature throughout processing until the shellfish land on the freezer belt to be deep frozen. There are five main products from white clams:

• • • • •

Whole in-shell vacuumed in the bag Half-shell Meat IQF Meat block deep-frozen Meat skewer

Prior to export, strict controls are necessary. Samples are taken five times to the factory laboratories and the results of the analysis must be problem-free before the product can go to the export markets. In separate work areas, the meat is removed from the clam shells and checked for shell splinters, leftover grains of sand or even little stones before being sent to the belt freezer to be IQF shock-frozen. Some of the meat is also frozen in blocks. The frozen meat is sorted by size again before being packed in bags and cartons ready to send. The common sizes offered for clam meat are: 300–500, 500–800, 800–1 000 and over 1 000 pieces/kg. 5.5. Tilapia Warm water aquaculture and Viet Nam bring one question to mind: is there any tilapia? The answer to that is: Yes, there is, but not much … yet … The farming of tilapia (Oreochromis sp.) is not very profitable for Vietnamese inland farmers. In the Mekong Delta there are some tilapia farms, usually in combination with pangasius farming; they do not harm each other, so the two fish can even be kept in the same pond. Viet Nam farms black tilapia (red tilapia is yet to be established). The fish stay small, mostly around 1 kg at harvest, i.e. suited to markets who want round fish, like Africa and southern Europe, but not profitable when filleted. The huge profits expected from pangasius prevented farming communities from going big scale into tilapia farming, with some exceptions, for example, the Alpha Sea enterprise in the vicinity of Da Nang, where one farmer with a share in a freshwater lake near the mountains established a very successful tilapia farm. The reason he began farming tilapia was that pangasius sold at such low prices, he realized that tilapia could get him a better market. Viet Nam is perfectly suited to tilapia farming: the water is there, the temperature is right. In the coming years, tilapia may well give a further boost to Vietnamese aquaculture, just as pangasius did. MARD fully supports tilapia aquaculture. Water farming at sea and inland is one of the best ways to bring employment and provide a good living, even in poor and remote rural and coastal areas. Developing aquaculture contributes to the positive shift of the structure of the rural economy, the creation of employment, the increase of income, and the improvement of living standards of both farmers and fishermen. This contributes to the building of social order and security in rural, coastal and remote areas.

Aquaculture development is therefore regarded by the Government as one of the key strategies of the fisheries sector of Viet Nam. The future programme for aquaculture includes efforts to speed up the survey, investigation, planning and programming of aquaculture projects at the national and provincial levels. Such development planning shall be carried out in combination with rational and effective use of surface water areas, providing attractive labour opportunities to the people, population relocation, and eco-environment protection. (Dzung). 6. FISHING

Over 120 000 fishing vessels – i.e. registered vessels, not counting all the round bamboo rowing boats – go fishing along the more than 3 000 km of Viet Nam’s coastline. To control such huge a fishing operation – probably one of the biggest in the world – would seem almost impossible. The much-used term, “sustainability”, must be used somewhat differently with regard to the over 2 000 different species – including those examined in detail herein – caught by these fishing operations. Viet Nam is a true fishing nation. Fishing is part of the everyday life of everyone who has a patch of water within walking or rowing distance from his house, i.e. nearly every Vietnamese. Commercial fishery goes on, but it is unorganized and highly dependent on numerous natural factors and therefore seldom reliable. For example, in central Viet Nam from November to March, very little fishing can take place as storms constantly rock the waves and the shores. Vietnamese vessels are a far cry from the hi-tech sea-going “warships” of other fishing fleets operating around the world. There is no high-speed trawling, let alone on-board freezing of

thousands of tonnes of catch. Vietnamese fishing boats are made from wooden planks and are at most 20 m long; this also applies to the tuna fleet which does high-sea fishing. Viet Nam is dominated by small-scale fisheries concentrated in near-shore areas. In 2000, offshore fishing began to develop helping to upgrade the living standards of coastal fishermen. Viet Nam boasts over 40 kinds of fishing operation, the most important of which are trawling, drift-netting, purse-seining, long lining, fixed trap and netting. Trawling accounts for the largest share (over 30 percent). The whole country has 123 609 boats engaged in fisheries operations with a total engine capacity of more than 5.4 million hp (horsepower). The fleet includes 113 400 marine fishing boats, of which 14 000 are offshore, with a total capacity of 2.5 million hp. Boats with engines of less than 90 hp account for 84 percent of all motorized boats. Fishing volume increased markedly from 700 000 tonnes in 1990 to 2.13 million tonnes in 2008. Marine capture fishing production alone reached 1 937 000 tonnes, of which 40 percent came from offshore fishing, 60 percent from near- or inshore fishing. Near-shore fishing productivity decreased substantially from 0.9 tonnes/hp in 1999 to 0.3 tonnes/hp in 2008. Figures from the Department of Capture Fisheries and Fisheries Resources Protection (DECAFIREP) under MARD reveal that at October 2008, there were 123 000 fishing boats and vessels in all coastal regions; of these, the number of motorized vessels was 95 000. The total fishing power increased at a rate of 18.3 percent per year in recent decades and the average power per vessel reached to 55 hp in 2007. There are currently more than 40 types of fishing gear commonly used in Viet Nam, divided into five groups: trawl, gill net, purse seine, long line and fixed traps. Trawling accounts for the highest proportion: over 30 percent, representing almost 51 percent of all offshore fishing vessels. Most vessels are made of wood and have a fairly short lifespan. Offshore engines are usually second-hand, therefore do not last long and fuel consumption and costs tend to be high. A study from 2005â&#x20AC;&#x201C;07 revealed the total marine resources of Viet Nam to be about 5 million tonnes and the TAC 1.8 to 2.0 million tonnes/year. At present, in-shore areas are considered stressed and fisheries resources are threatened with exhaustion. Indeed, vessels equipped with engines under 90 hp and non-motorized boats (accounting together for 84 percent of fishing vessels) fish mostly in inshore areas. In addition, there are the over 14 000 offshore fishing vessels with a total power of about 2.5 million hp, which also operate inshore. The fishing force grew rapidly while fishing grounds were limited, and the balance between fishing force and resources was consequently lost. Given this increase in vessel number and decrease in fishing ground quality, fishing productivity fell from 0.9 tonnes/hp in 1999 to 0.3 tonnes/hp in 2007. What is more, caught fishes are usually small in size and of poor quality and the proportion of trash fish is high, accounting for 40 to 50 percent in seine fishing and 70 to 80 percent in shrimp trawl in coastal areas.

The number of vessels has increased continuously and without controls since 1980. While the coast’s natural resources are gradually exhausted, the number of small-scale fishing boats continues to increase by 2 300 vessels every year, and the number of fishermen by 23 155 people a year (Dzung). Vietnamese fishermen are dependent on middlemen: processors and agents pre-finance fishing trips (supplying the diesel) and are compensated with a share of the catch. Such agreements are common and can apply to individual fishermen or to whole fishing communities. There is no established auctioning or market system in Vietnamese fisheries. The fish is landed wherever the fishermen can go ashore, and while some main harbours take fish, it is landed and sold all along the coast. Much of the catch goes to the daily fresh markets which may be local or regionally organized. Many small distributors or small wholesale enterprises wait with their cool truck somewhere on the coast and are in direct contact with the fishermen who land their directly. To control such practices is next to impossible. Fishing is pretty much “free-booting” in Viet Nam, like in the (good?) old days of European fisheries when the fisherman was a “free” man who could sell the fish to whoever he pleased. Fishery in Viet Nam represents a basic livelihood. There are regions in Viet Nam with rocky shores, e.g. Phu Yen north of Nha Trang City, where the only alternative comes from tourism (and then only if the investment is there). In the case of fisheries in Viet Nam, all the above factors have to be taken into account when examining modern-day considerations of decreasing abundance, sustainability and ecological awareness. Government bodies do their best to organize the fisheries in line with modern systems, but often the basic necessities are lacking, such as sufficient ice to take on board. The most efficient systems are often run by the processors: they are in regular contact with qualityconscious fishermen, guarantee the fishing trips and take the landings afterwards. The fishermen are, therefore, dependent on the one hand but safe on the other. It is MARD’s policy to support fisheries and install sustainable systems in the future in cooperation with leading NGOs. For example, WWF (World Wildlife Fund) is in consultation with the fishery management of Viet Nam with the aim of installing single sustainable fisheries operations, such as squid catching in the holiday resort town of Phan Thiet in central Viet Nam. Viet Nam is under pressure from European legislation which establishes rules of traceability for fishery products. Major changes must be made in Vietnamese fishery practices in the coming years, starting immediately. A new EU regulation will exclude Vietnamese seafood exporters from a lucrative export market unless a system is installed to certify who caught the fish and where. All seafood export consignments to the EU as of 31 October 2010 must be clearly labelled as to the origin of the products, including the sea area where the fish are caught and the names of the fishing boats; otherwise, entry will be refused.

This represents a great challenge for Viet Nam, as fishing grounds have not yet been zoned and defining the catching areas is not simple. Vietnamese fishermen cover wide territories, for example, fishermen in Binh Dinh province may go as far as the waters off Kien Giang province in the far south. Nguyen Xuan Nam, head of a seafood company in Nha Trang, reports that most processing companies collect materials from small wholesalers; they do not buy directly from the fishing boats. The wholesalers in turn consolidate the catch from tens or hundreds of fishing boats. Therefore, defining the origins of the products is another challenge. The authorities in Binh Thuan stated that it is very difficult for them to enforce the requirement that seafood companies trace the origin of materials because almost 9 000 boats are home-ported in the province (VNA). Viet Namâ&#x20AC;&#x2122;s fishing fleet has a huge bounty of valuable catches to offer to the world markets. The good news is that, while under strain, the waters are not actually overfished. The low-tech fishing methods adopted by the Vietnamese fleet do not permit the level of exploitation of the seas reached by the huge fleets of freezer trawlers used by modern fishing nations, such as Japan or Russia. The lining and seining methods adopted by Vietnamese fishermen do allow the fish to recover. Threats do exist, though, in particular for the reef fish living in front of the shores. Viet Nam boasts some of the worldâ&#x20AC;&#x2122;s most magnificent reef diving grounds (e.g. Nha Trang), and they are heavily fished and much used for tourism. Saving and securing these spawning grounds for Vietnamese sea fish is one of the major challenges for fisheries in the future. Such a challenge has already been successfully met in aquaculture management: saving, rebuilding and protecting the mangrove forest in the main shrimp farming area of Viet Nam in Ca Mau in the Mekong Delta. 7. SEA CATCH

Viet Nam sea catch landings are mostly seasonal. Snappers, groupers, parrotfish, leather jacket, fusiliers – whatever the boats bring is used.4 Vietnamese fisheries operate along the same lines as European fisheries some 50 years ago: fishing boats bring in a mixed catch; specialization is rare. The Vietnamese sea fish processing factories are usually situated at the landing places themselves or nearby, and they take in whatever the contracted boats land. Most of the catch is immediately filleted and deep-frozen. The state of the industry in this respect is very high – most sea fish factories have state-of-the-art processing and freezing equipment. However, the factory is often located too far from the fishing ground and on-board handling meets neither international quality standards nor the high standards of the processing facilities. The main segment of export sea catches belongs to the small number of boats that do meet these standards. These boats land tuna (also called “ocean tuna” by the locals), cuttlefish and squid, and to some extent swimming crab, which all give stable landings and export markets. 7.1. Tuna Tuna is one of the world’s most sought after catches. Pressure on this resource is relentless as more and more countries catch and process it. The main markets for tuna are Japan and the United States, and Japanese buyers pay premium prices for top quality catch. Also in Europe the consumption of tuna is rising continuously. Tuna is a very special fish in Viet Nam. Viet Nam has 1 670 ocean-going tuna fishing boats and production fluctuates between 30 000 and 42 000 tonnes. Tuna exports increased from 20 700 tonnes in 2002 to over 50 000 tonnes in 2008, when they reached a value of about USD 182 million. Tuna is the most important species in offshore fishing and there has been investment to develop a modern industrial fishery. High-sea fishing of tuna began in the 1990s. Ocean tuna fishing has developed rapidly and is concentrated in the three provinces of Binh Dinh, Phu Yen, Khanh Hoa and the marine areas of the southeast and southwest. Tuna fishermen from Nha Trang to Da Nang in the centre of Viet Nam use only long lining and they do their best to sustain the source and land a high quality catch. The main species harvested are yellow fin and big eye, hunted with wooden vessels up to 40 m long. Even Greenpeace, in its research into tuna fishing some time ago, was highly impressed about the way tuna was caught in Viet Nam. In Phu Yen, about 80 percent of the catch is yellow fin and the remainder big eye. The latter is much sought after, particularly in the Japanese market thanks to its lighter meat and higher fat content. Indeed, the best big eye and yellow fin (Grade A) goes direct from the landing place to be sold fresh on the Japanese market. A significant proportion of the catch is sent to the United States market by plane; yellow fin can be sold on Miami fish market in the United States just 60 hours after being caught. United States buyers often accept tuna catch from the 4

At the end of this report is a list of the main landings of Vietnamese fishing boats, including catching times and a list of fishes with pictures and all names: scientific, Vietnamese and English.

Vietnamese coast on a commission basis only; they pay the fishermen later on the basis of the colour of the fish and of the price reached on the market. The fishermen of Phu Yen run a fleet of 500 wooden fishing vessels. They are no longer than 30 or 40 m and their diesel engines are 60 to 150 hp. The vessels are painted in bright colours and two large magic eyes on the front frighten off the ghosts of the sea. The main catching season for tuna begins in February and runs until July or August. Catching takes place also during the rest of the year, but it is very limited because of storms . The fish is caught by long lines positioned in the waves and which can be up to 6 km long. The lines are hooked and baited, mostly with fresh squid or sometimes with flying fish caught fresh on the way to the catching grounds. The lines stay in the water for about 3 hours before being hauled in. Each fishing trip lasts about 15 days and often leads around the Truong Sa Islands in the Eastern Sea or even up to the coast of Brunei. Unlike modern vessels, the Vietnamese boats are not equipped with sonar or other electronic hi-tech fish-finding devices. One wooden vessel as used for tuna fishing costs 300 million VND (about USD 20 000). During the fishing trip itself, the cost of long lining, diesel fuel, bait and supplies must be covered. Processors pre-finance the costs of the fishing trip and are rewarded with a share from the catch. As many as 40 vessels may be under some form of contract, fishing for the processing company. The best and most successful skippers in the fleet are selected. 7.1.1. Different qualities for selected markets The price a fisherman gets for each tuna varies between USD 150 for a fish of average quality and USD 250 for the highest quality landing. On one trip a vessel catches between 15 and 20 fish each weighing between 20 and 70 kg. By-catch is also landed, such as swordfish, mahi mahi and oil fish (the latter is popular in the European market, smoked and called “butter-mackerel”). About 3 to 5 tonnes of catch can be landed in one trip. One vessel is manned by 20 to 25 fishermen and they all live with their families off the money made in this fishing operation. Nobody gets rich, but they are all quite well off. Viet Nam’s tuna fishermen are regarded as the stars of the Vietnamese fishing fleet and they get the highest pay for their fishing efforts. More than 10 000 tonnes of tuna catch are landed each year by the fishermen of Viet Nam, and these fish are much sought after and well paid. In Japan, a good loin of tuna used for sashimi can be sold for more than USD 200/kg.

Box 2 Vietnamese tuna categories:

•

One plus: Eyes clear and not milky, firm, shiny skin without cuts or bruises, light pink rosé meat, totally cleaned inside. Sold fresh.

One minus: Eyes a little milky already, no cuts or bruises, lightly red meat. Sold fresh.

Two plus: Eyes milky, some cuts or bruising, red meat. Only sold fresh on request, but regularly frozen.

Two minus or “g”: Reddish eyes (due to lack of bleeding on board), cuts and bruises on the skin or broken fins, dark red to deep red meat. Only sold frozen or for canning.

Under two minus: Frozen or canned

“One” products are also referred to as A-Grade, “Two” B-Grade. A-Grade is mostly sold fresh, B-Grade only frozen.

The tuna is cut and bled on board and gutted right away. The bleeding takes place best in a tank that has been filled with a mix of cooled water and crushed ice. Not all Vietnamese vessels have these tanks on board, so they simply ice the fish in the hold until landing. The tuna is landed 7 days after catching but sometimes, if it is very high quality fish, a pilot vessel collects the load from the catching mother ship to transport it faster to the landing place. Europe takes mostly B-grade tuna for price reasons. A-grade catch is sold for USD 15–20/kg, B-grade catch for USD 4–7/kg. Some fish is also processed for the loins which are requested mostly in the United States market. To maintain the red colour, as preferred in the United States market, the tuna loins are treated with carbon monoxide, a method that is restricted in the European market for health reasons. Right in the heart of the fishing village of Dong Tac in Phu Yen province, situated on the wild romantic rugged coast north of Nha Trang, there stands a Buddhist Pagoda temple whose outside walls are covered in beautiful colourful paintings, including one of a vessel ploughing through the waves and hunting tuna; the vessel is accompanied by a dolphin. Indeed, as in the temple painting, tuna catch and dolphins go hand in hand; this causes problems as hundreds of dolphins get killed by the drift-nets of modern fishing vessels. Viet Nam’s fishermen regard dolphins as sacred creatures and guard them during tuna catching. The fishermen believe that the dolphins will guide them during storms, to return them safely to their families. Even dolphins which die by natural causes or are stranded are buried by the whole fishing community with the highest honours, a fact that deeply moved Greenpeace members when in Viet Nam researching the country’s tuna fishing methods. Greenpeace in fact approves Viet Nam’s tuna fishermen as truly “dolphin friendly”. 7.1.2. Technological upgrading needed However, Viet Nam’s tuna industry continues to be dictated by lack of technology with regard to catching methods and handling, both on board and once landed.

Oceanic migrating tuna, including big eye, yellow fin and skipjack, as well as swordfish, are a potentially high-value export product group, captured since 1990 when long lining was introduced. However, the selling price is low and unstable for various reasons: rudimentary and incomprehensive fishing technology and equipment; small-scale operations; and backward post-harvest handling and preservation – all factors resulting in insignificant productivity, catch and value. Furthermore, the lack of value-added processing and canning technology also contributes to the modest tuna export value. The tuna exports in 2008 were 52 818 tonnes (4.27% of total seafood exports) worth USD 188.694 million (4.18%). The tuna producers of Viet Nam do not have their own trademark: market penetration capacity is limited and dependent on clients and brokers. Tuna is a resource common to numerous countries and stock is threatened. The tuna exporters are under pressure from international concerns about management, traceability and illegal, unregulated and unreported (IUU) fishing. The government of Viet Nam has therefore moved to join the global community to manage tuna fishing through its acquisition of observer status in the Western and Central Pacific Fisheries Commission (WCPFC), and it hopes to become an official member (Duong). The Vietnamese tuna fleet needs technical upgrading to be able to optimize valuable catch and become competitive in the markets of tomorrow. Tuna is scarce in the world, the management of the seas is the order of the day and, most of all, Viet Nam enjoys good tuna catches: the right technology is needed to handle nature’s bounty in a sustainable manner. According to the General Department of Customs, by mid-September 2009, Viet Nam had exported tuna to a value of USD 118 million, a 6.1 percent decrease in quantity and 15.2 percent decrease in value compared to the same period in 2008. Lebanon has seen the most sustainable growth rate in tuna imports from Viet Nam. By 15 September 2009, imports had reportedly increased by 137.6 percent compared to the same period in 2008. In the United States, Switzerland and Australia, on the other hand, imports remained constant. Viet Nam’s tuna exports to two big markets, Japan and the EU, have decreased dramatically – to Japan by 33.7 percent, to the EU by 3.2 percent – and local agriculture departments warn that they will continue to drop in the future. The Ketsana typhoon, which devastated the central region, has affected processing workshops which have suffered from material shortages. Tuna exports are to face new technical barriers. As of October 2010, the EU’s IUU regulations will take effect and the exporters of seafood consignments must possess documents showing the origin of the products. However, MARD has yet to complete the drafting of regulations for the provision of seafood origin certificates (VNA). 7.2. Cephalopods Viet Nam boasts sea catches of 25 different kinds of squid, cuttlefish and octopus, as outlined in the official report:

The cephalopods for processing all come from capture fisheries whereas the market span for the product is relatively large, ranging from Eastern and Southeast Asian countries to European countries such as Spain, Portugal and Italy. Therefore, selling price of cephalopods is rather stable. The commodity can be produced into many value-added products such as sushi and sashimi which become popular in the diets of high income populations in Japan, in particular, and Southeast Asian and Pacific countries. (Duong) One of the most famous areas for quality catches is Kien Giang on the seashore of the Mekong Delta. Kien Giang catches are famous for being very white in appearance and very firm in the meat structure and are considered the best catches of cephalopods available in Viet Nam. The Kien Giang fishermen use colourful wooden fishing vessels up to 20 m long and 180 hp. Fishing trips last 1 or 2 days and sometimes longer – up to 3 weeks, in which case pilot boats meet them at the fishing ground and bring the catch in before the mother ship returns. Some boats go for cephalopod fishery only, others mix with other species, by-catching squid, cuttlefish and octopus. When going for cephalopods the vessels often combine with trawling or net fishing. Four main kinds of cephalopod are fished: •

•

Squid (Loligo Chinensis), commonly known as mitre squid, can be detected by its rocketlike shape, small head and arrow tail fins. Soft squid (Sepiotheutis lessoniana Lesso), commonly known as big fin reef squid, has meat with a special soft and smooth texture. It has a rounder body, similar to a cuttlefish, with one long uninterrupted fin-frame around the whole body and two long tentacles left and right of the head crowned with several small ones. The body length is three times its width. Cuttlefish belonging to the Sepiidae family (Sepiella Japonica Sasaki), commonly known as Japanese spineless. It has a round body with a small head and tentacles and the fin surrounds the whole body as with soft squid. Octopus from the Octopodidae family (Octopus dollfusi), commonly known as marbled octopus.

The above cephalopods are all caught off Kien Giang, in 63 000 km2 of warm tropical unpolluted sea, where the fishermen take their ships on 2- or 3-day trips, or sometimes for as long as 2 weeks. Some of the boats even deliver as much as 300 tonnes per year and never use preservatives (except ice) to keep the catch in good condition. 7.2.1. Processing Huy Nam Factory is situated just 5 minutes from the landing place and gets its fresh catches every day right off the boat. The fresh cephalopod landings processed at the 7 000 m2 factory

during the production year are 40% squid, 25% octopus, 20% cuttlefish and 15% soft squid, all available year-round directly off the boats. This hygienic plant employs 600 workers and two main lines operate with each process taking place in a separate workshop. The receiving area is isolated from the first- and second-hand processing and from the packaging area, which is located after the freezing units. The raw octopus is brought to the factory receiving area and kept in isolating barrels covered with ice at a core temperature of 4°C. Inside the factory it is emptied out for the first washing process. The washing takes place in plastic bins filled with a 1 percent salt-water solution – an imitation of the original seawater – and a small quantity of chlorine (5 ppm) to kill any bacteria on the surface of the octopus. The temperature of the water solution is lowered to 6°C by adding wet ice. The eyes of the octopus must be clear black and shining. Discolourations and bruised or damaged skin are not acceptable. The octopus must always be handled using rubber gloves, both on board and in the factory, or it may change through mimicry to a pink or purple which does not match the very white appearance requested by the customers. The octopus is gutted through the mouth passage to avoid slitting open the body; the guts, the stomach and intestines are taken out. The ink bladder follows. Stored in the intestines of the octopus in an separate bladder, it is important that it remains intact.. The ink bladder is valuable and is sold to Japanese and Australian customers; in Italy the ink is even used to produce “pasta nera” (black noodles coloured with cephalopod ink). The entire process is performed by hand over a washing basin filled with ice; the octopus must be handled quickly to avoid raising the temperature of the octopus too high – it should stay around 5°C. Finally, the teeth are removed from the mouth directly under the tentacles. The eyes – positioned right and left next to the tentacles at the head – are also taken out to please international customers who find the eyes ugly (as the Chief of Technology at the factory explains). The octopus is washed in bins of saltwater ice and even rubbed like laundry. This may look very brutal, but it makes the skin and meat smooth and all leftover guts and pieces are cleaned out of the belly. There is also a blanching line for the cephalopods in a separate room between the two main factory workshops. The cephalopods are placed on a sieve-like tray and immersed in an electically heated stainless steel basin containing saltwater solution; they are shock-blanched for just 5 to 7 seconds and then immediately taken out again. They are then put into an ice water bath and rapidly cooled back down to the optimal temperature of around 5°C to avoid the meat becoming chewy and to keep it smooth and soft instead of tight and firm. The processing yields of the different cephalopods to obtain 1 kg of product are: •

Octopus:

1.10 kg

• •

Squid: 1.25 kg Cuttlefish: 1.60 kg

The main sizes of the different cephalopods offered by the factory and used in blocks and IQF freezing are as follows: • •

•

Octopus: 10–30 pieces/kg Squid: 10–20 pieces/kg and 40–60 pieces/kg; also 6–8/kg (mostly soft squid, generally bigger in size than mitra squid) Cuttlefish: 40–60 pieces/kg for Japanese spineless; pharaoh cuttlefish (Sepia pharaonis Ehrenberg) is graded into pieces of 100–200 g

7.2.2. Flower blocks Octopus is also exported in glazed blocks and often reaches the market “flower shaped”. Moulding the octopus into the trays is an art form in its own right requiring skilled hands. The first layer of octopus bodies is laid with the body towards the back and the tentacles towards the front, spread out to look like an open flower. This row is then covered with bodies placed upright and the tentacles spread like an open flower on top. There are usually 50 to 80 pieces of octopus per block, half below, half spread like flowers on top. The octopus block is then filled with water using a spoon-like plastic device and paying attention to pour the water directly on the bottom of the block; the flower-shaped tentacles on top are glazed minimally for protection, avoiding drowning the whole block in water. The protective water glazing seldom exceeds 10 percent, at the most 15 percent. Customers usually pay for the net fish weight and not the glazing. The block trays are placed by hand in the contact freezer and down-frozen for about 90 minutes. The requested block sizes vary depending on the cephalopods used: • • • •

Octopus: Squid: Soft squid: Cuttlefish:

0.5, 1 and 2 kg 1 and 2 kg 2 kg (fillets) 0.5 and 1 kg

The blocks go mostly to the Japanese market where the large soft squid fillets are preferred, but other squid and some cuttlefish and octopus are also sold. The Japanese market accounts for 30 percent of the volume and 40 percent of the value of Huy Nam company sales. The EU is the second biggest market for cephalopods from Kien Giang, accounting for 40 percent of the volume and 30 percent of the value of the exported goods. The main markets in Europe are (in order of importance): Italy, Germany, Spain, Portugal and the Netherlands. Huy Nam also delivers direct to supermarkets and cash and carry, such as Metro in Germany, supplying cuttlefish and squid in 1- and 2-kg bags. CIF export prices are as follows:

• • •

Squid and soft squid: Octopus: Cuttlefish:

≤ USD 8–9/kg < USD 3/kg ≤ USD 3.80 (for bigger sizes) and ≤ USD 2.80 (smaller)

The factory never uses STP (sodium tripolyphosphate) as it makes the meat chewy and gives the cephalopods an unnatural colouring. The factory managers stress that no additives are used to maintain the natural white colour of the Kien Giang catches. 7.2.3. Characteristics Viet Nam has over 100 seafood companies located along the coast and specializing in cephalopod processing. There are 53 species of cephalopods in six families; of these, three important families – Loliginidae, Sepiidae and Octopodidae – include a total of 11 species of high economic value. Loliginidae: mitre squid (Loligo chinensis), normal squid (L. edulis), Japanese squid (L. japonica) and big fin reef squid or soft squid (Sepioteuthis lessoniana). Squid live near the surface, both near and far from the shore. Sepiidae: pharaoh cuttlefish (Sepia spp., S. pharaonis), broadclub cuttlefish (S. latimanus), kislip cuttlefish (S. lycidas), golden cuttlefish (S. esculenta) and Japanese spineless – baby cuttlefish (S. japonica). Cuttlefish often live in the seabed and the middle area near the shore at depths of 30–200 m. Octopodidae: long-tentacle octopus or Maza (Cistopus indicus) and 2-eye or 4-eye octopus (Octopus dollfusi). Octopus live in the bottom and middle layers of the sea. Box 3 Catching seasons

North (Tonkin Gulf, concentrated on Thanh Hoa and Quang Ninh provinces): • Cuttlefish: Nov.–Feb. • Squid: Oct.–Feb. • Octopus: Year round

Central (Dong Hoi, Quang Ngai, Da Nang, Phu Yen, Khanh Hoa and Binh Thuan provinces): • Cuttlefish: Nov.–Feb. • Squid: June–Oct. (small and medium) Oct.–Feb. (large) • Octopus: April–Oct.

South (Vung Tau and Kien Giang provinces): • Cuttlefish: April–Dec. • Squid: April–Oct. • Baby octopus: April–June and Aug.–Dec.

Box 4 Cephalopods Products

Squid (Loligo spp.): • Whole cleaned squid • Squid fillet • Squid rings • Squid tentacles

Cuttlefish (Sepia spp.): • Frozen, whole cleaned cuttlefish • Frozen, whole cleaned baby cuttlefish • Frozen, whole cleaned baby cuttlefish skewer

Octopus (Octopus spp.): • Whole cleaned baby octopus • Frozen cut baby octopus • Frozen pulp squid cut

7.3. Crab There are 17 types of valuable swimming crab in Vietnamese waters, the most well known is the blue (sometimes also called green) swimming crab (Portunus pelagicus) – Ghe Xanh in Vietnamese. The second most well known is the three-spotted swimming crab (P. sanguinolentus) – Ghe Ba Cham in Vietnamese. The mud crab family (Scylla spp.) comprises 11 types of high-value crab in three main groups – Indo-Pacific swap crab, green mud crab and red frog crab. Swimming crabs are mostly harvested from the sea and can also be farmed at sea; they are generally a valuable catch. The mud crab family is harvested from freshwater and mainly farmed. Swimming crabs and marine crabs have an average allowable catch of around 1 000 tonnes a year. Farming of commercial crab, swimming crab and other marine fish species has developed rapidly in southern coastal provinces, and exports of crab and swimming crab products now reach over 8 000 tonnes/year to a value of approximately USD 48 million. Seaspimex specializes in processing canned crab for the United States market in Ho Chi Minh City. Seaspimex was founded 20 years ago as a state-owned processing cooperative and in 2002 became a joint stock company with private owners. The crabs are caught with fishing boats operating in Vung Tau (the famous holiday resort near Ho Chi Minh City), Kien Giang Province in the Mekong Delta, and Phan Tiet (renowned for its white beaches) and Phu Yen in central Viet Nam. Most of the crab is delivered live to the factory in seawater tanks. The fishermen put the crab straight into the tanks on board, and on landing, trucks with cooled seawater are waiting to deliver the animals to the factory door. Some catches take place in more distant waters and one or two days go by before landing, in which case either the crab must be cooked on board before landing and transportation to the

factory cooled on wet ice, or alternatively, pilot boats take the load from the fishing vessels and bring them ashore before the mother ship returns. Crabs delivered to the Seaspimex factory come in three main sizes: 30–70 g, 70–120 g and > 120 g. If the animals are delivered live, they must be steamed for 6 minutes in a hot water bath (117°C exactly) before processing. The crabs are then cooled down with rotating air-fans. It takes about 60 minutes for the raw material to reach the processing temperature. For overnight storage, a temperature of 0–4°C must be maintained. When the back shell is lifted off, the different meat is visible: white, grey and brown. The best meat is extracted from the claws, which are not enormous but longer than the front legs of an Atlantic lobster or mud crab with its rounder front legs. 7.3.1. Crab meat A crustacean connoisseur breaks the body of the crab apart and picks the white and tasty meat out of the multiple bony chambers inside. The best meat is at the top of the legs, the “shoulders” of the crab. The ladies in the factory use a knife to separate it from the shoulderholes leading to the interior of the legs. Scissors are used to open the claws and legs. The premium quality meat from the swimming crab is the brown-white claw meat, comprising 70 percent claw meat and 30 percent leg meat. Some customers request pure claw or leg, which are even more expensive. A 454-g can retails for USD 15–18. The next best qualities are the ivory white body pieces in various sized pieces: • Colossal lump: ≥7g • Jumbo lump: 4.5–7 g • Special: ≤ 2.5 g • Broken lump: < 2.5 g and the leftovers of the smallest pieces Cans are packed by hand and digitally weighed to obtain the correct weight. There must be a minimum of 454 g (i.e. 1 US pound) of meat per can. Some 0.8–1 g per pound of filling of SAPP (sodium acid pyrophosphate, NA2H2P2O7) is added to the product. This chemical prevents the crab meat from crystallizing and during pasteurization it stabilizes and maintains the natural colouring: white for body meat, brown-white for leg and claw meat. Once pasteurized, the crab cans are taken out of the hot water bath and must be immediately cooled down to 0–3°C. The cooling process lasts about 120 minutes and 5 ppm of chlorine is added to the water. The ready cans can then be taken out, checked and packed. 7.3.2. Characteristics Crab and swimming crab (Portunus spp.) are both caught and farmed in various areas of south and central Viet Nam, such as Kien Giang, Vung Tau, Can Gio and Khanh Hoa.

Box 5 Crab species

Crab 11 types of high value, in particular 3 primary types: • Indo-Pacific swamp crab • green mud crab • red frog crab

Distribution: widespread in the seas of Viet Nam, living in brackish water regions Fisheries season: April–Nov. Can also be farmed

Swimming Crab: 17 types of high value, in particular: • blue swimming crab

Distribution: widespread in the seas of Viet Nam, living in coastal regions Fisheries season: May–Feb. Can also be farmed

Box 6 Crab products and export markets

Crab: • Crab back fin covered crab meat • Crab claw wrapped rice paper • Crab claw covered with crab meat • Crab stuffed with crab meat • Block cooked crab meat • Block uncooked crab meat • Boiled crab meat

Swimming crab: • Whole alive blue swimming crab • Whole blue swimming crab • Soft-shell blue swimming crab • ½- or ¼-cut blue swimming crab

Export markets •

•

China, Hong Kong: USA, Australia: UK: Japan:

Live crab Block cooked and uncooked crab meat Whole soft-shelled crab Whole blue swimming crab, ½- or ¼-cut crab and some kinds of value-added crab, e.g. blue swimming crab section meat, crab claw wrapped in rice paper, crab claw covered with crab meat, crab farci.

7.4. Speciality products Much of the sea catch from Viet Nam is processed into special products, including the broad range of dried fish exported all over the Asian and Arab world. Nuoc Mam fish sauce from the island of Phu Quoc is widely used in Vietnamese cooking and sold the world over. This unique speciality is produced in the small island (the biggest in Viet Nam) in the Gulf of Siam, with a population of about 100 000.

The island of Phu Quoc is also a holiday resort, but is becoming famous for its anchovy sauce which has even received the “Appellation Controlée” label, giving it international brand protection. Phu Quoc’s fishermen operate approximately 110 sea-going vessels, most of which go for three varieties of anchovy: Soc Thieu, Com Sau and Com Do (the latter a small reddish fish). They are caught by a kind of purse seining method. The Hung Thanh company has produced Nuoc Mam on the island for over 100 years; it has two modern production plants and one landing point in the capital of Phu Quoc. It is vital that the raw material coming from the boats has never been touched by ice as Nuoc Mam production is a temperature-related fermenting and curing process: •

•

The fish is mixed on board: 3 parts fish weight, 1 part salt. The fish are loaded into cone-shaped barrels made from 50 2–4 m wooden planks; the opening is wider at the top and narrower at the bottom. After 3 days, the bottom of the tank is opened and the first liquid (“Boi” in Vietnamese) runs out and is collected in another tank. A bamboo woven mat is placed on top of the fish mass and on top of that a grid of crossed planks to put 10 kg/m2 pressure on the fish; it is important to achieve moderate weight but constant pressure. The Boi is then poured back over the fish and drains mostly down to the mass below, but some stays at the surface and covers the barrel opening to protect and air-seal the fish mass brewing inside. The whole opening is covered with a thin layer of salt. After 1 year, the mature sauce has accumulated at the bottom of the barrel and is ready for harvesting.

The bottling process is manual and takes place in the hygienic filling room. Plastic hoses lead from two plastic tanks containing the sauce into bottles that are then filled by hand. Each bottle is sealed with a plastic cap by means of manual pressure using a simple sealing device. The label is glued by hand on each bottle and finally a protective plastic hull is sealed around the bottle before it is put into the carton ready for dispatch. From 13 tonnes of raw fish, 2 000 litres of Nuoc Mam are produced. Current annual exports stand at about 1 million litres – 400 000 litres go to Japan and 400 000 litres to Europe, with the biggest markets in France, Belgium and Germany. 7.5. Market statistics In 2008, tuna and other marine fishes were Viet Nam’s biggest aquatic commodity exports (after shrimp and pangasius): 184 474 tonnes (14.9%) to a value of USD 602.781 million (13.37%). Tuna exports from Viet Nam did not increase in 2008, but maintained the 2007 volume of 52 818 tonnes. However, with the increase in world tuna prices, the value rose to USD

188.694 million, a 25% increase on 2007. The biggest markets for Vietnamese tuna were the EU (33.3% of total value), the United States (29.0%) and Japan (12.4%). Exports of other marine fish species reveal a similar pattern. In 2008, total export volume was 131 656 tonnes (12% increase on 2007), to a value of USD 414.087 million (23% increase). The most important markets for Vietnamese marine fishes (except tuna) were Japan (24.1%), EU (23.8%), Republic of Korea (14.5%) and the United States (10.9%). Frozen cephalopod exports increased slightly between 2007 and 2008 (5.5% in volume, 12.7% in value), accounting for 7.1% of the total value of Vietnamese fisheries exports. Exports of dried products decreased in volume (7.6%) but maintained almost the same value at over USD 318 million (0.8% decrease on 2007) (Dzung). It is without dispute that the fisheries sector poses the greatest challenge for the development of the Vietnamese seafood industry. There is still good catch available: a modern fishing fleet is needed to supply the processing industry, which is much more advanced than the fisheries. With careful harvesting, Viet Nam has the potential to make much more out of its catches, with appropriate on-board treatment to obtain quality production: this is the challenge for the future. 8. INDUSTRY 8.1. From raw processing to product ideas

The seafood industry of Viet Nam is one of the most modern in the world and ranks in the top five in various segments. The more than 500 factories located on the coast (most of which in the southern regions) are up to date, if not top style state-of-the art.

In just one decade, the industry went from that of a typical developing country to high standards of processing that often exceed comparable Western plants. All Vietnamese factories apply the HACCP system and most of them achieve modern processing standards as monitored by, for example, ISO (International Organization for Standardization) and BRC (British Retailers Consortium). Viet Nam processes pangasius in the biggest white fish factory in the world, Nam Viet (described below). It employs 30 000 people, and in just one hall 6 000 people trim fish, monitored by over a dozen TV monitors and served by top-grade conveyor belts – a kind of pangasius battleship from another planet. Bianfishco in Binh An has neat and orderly garden factories, using the latest modern equipment, but the focus is on hand-made quality destined for an up-scale market. There is also true hand-manufacturing, as in Agrex Saigon, where over 300 different products are made in separate workshops within the factory, for export to the demanding Japanese market. The reality seems almost miraculous and it is only natural to wonder how such an industry could be built in such a short time. International aid came in the form of swarms of seafood industrial consultants invited by Viet Nam from Europe, Japan and the United States to assist in the installation of the processing methods in the plants. NGOs, including DANIDA (Seaquip project), FAO and SIPPO, were invited by the Ministry of Fisheries and by VASEP to shape the industry to serve the over 150 export markets it serves today. 8.2. Riding out the boom The industry’s rapid rise to the world’s top ranks came together with the general boom in seafood demand at the beginning of the 2000s. Viet Nam managed to keep up and stay on top mainly with the two key products, pangasius catfish and shrimps. A report by Professor Dr Ngyuen Huu Dzung (Chairman of VASEP) describes the situation since the early 1960s as follows: Seafood processing has been present in Viet Nam for a very long time with traditional products like fish sauce and dried fish of all kinds, and then frozen items from the 1960s. The country has in 2008 more than 568 processing plants at industrial level, almost all of which are owned by private sector, only very few are state-owned. At the present time, more than 300 enterprises have qualified for exporting sea products to the EU, Norway, Switzerland, Canada and more than 400 factories for exporting to the United States, China, Korea and other markets. Of the total processing plants, 82% are located in the southern region, while 12% are in the central region and 6% in the north. (Dzung) If there is a single force that brought Viet Nam to the forefront of the international seafood business it is Dzung himself who, an economist by profession, was (and probably still is to some extent) the heart of the industry. Under his guidance at the realm of VASEP, the Vietnamese seafood industry went to the top of the world list of seafood suppliers.

8.3. VASEP VASEP was founded by the Government to provide the necessary know-how and international connections to allow the industry to grow according to market requirements. Box 7 contains a description of the association, taken from its own website. Box 7 VASEP

The Viet Nam Association of Seafood Exporters and Producers (VASEP) is a non-governmental organization, founded on 12th of June 1998. The main roles of VASEP are to promote the growth of Viet Nam 's seafood industry and to facilitate the smooth export of Vietnamese seafood products internationally.

VASEP is a bridge that connects Vietnamese seafood producers to customers all over the world. It provides Viet Nam 's seafood industry with essential market information; watches trends and develops national strategies for the seafood industry so that each enterprise can better determine its orientation for development; organizes and implements trade-promotion activities and on-the-job and short-term trainings; and supports the business expansion of member enterprises.

VASEP also assists its members in seeking financial and technical assistance from various sources to upgrade quality standards and add value to their seafood products. This enables members to make their products more competitive in the world market. VASEP represents and protects its members' legitimate rights and interests in regards to governmental authorities and third-party bodies.

VASEP also plays an important role in introducing Vietnamese seafood-related activities and projects to international organizations and partners so as to interest them in investing in and cooperating with Viet Nam .

VASEP members comprise the majority of the Vietnamese seafood establishments that have been approved by the EU Commission to export to the EU. Many other members have HACCP in compliance with US FDA (Food and Drug Administration) standards, which allows them to export their seafood products to the US market and others.

VASEP is a member of the following organizations: •

• • • •

Intergovernmental Organization for Marketing Information and Technology Advisory Services for Fishery Products in the Asia and Pacific Region (INFOFISH) National Fisheries Institute (NFI), United States ASEAN Aquaculture Federation (AAF) Viet Nam Chamber of Commerce and Industry (VCCI) Seafood Industries Association Singapore (SIAS)

The industry needed a HACCP programme to streamline processing operations and create one standard. Nafiqad (formerly Nafiquaved) was (and is) entitled to issue health certificates permitting the export of fisheries and aquaculture products and therefore had the power to oblige industry premises to install modern and hygienic equipment in their plants. VASEP, Nafiqad and MARD work in close collaboration with the official bodies of quality assurance and veterinary hygiene in the importing markets. Delegations from the EU, Russia, Egypt and even Latin America and other faraway importing markets make regular trips conducted by VASEP and MARD to audit the factories and to discuss, reshape and apply new regulations.

As a result of this close cooperation, hygiene crises are effectively managed with the support of the importing market authorities – with the occasional exception, such as the issue of chloramphenicol in shrimps, which arose at the beginning of 2000. 8.4. Factory categories Most processing in Viet Nam is done by manual labour: Fisheries processing companies in Viet Nam are using a lot of workers. Companies with 700 to 1 000 employees are considered small; middle-sized firms have about 2 000 people, some big companies have even more than 10 000 workers. The competition in labour force, especially the middle-level management, between the pangasius factories were high in last few years. (Dzung) Viet Nam can afford to adopt industrial manual techniques as labour costs are low – machines are far more expensive. An average factory worker earns between 1 and 3 million VND (USD 70–200) a month depending on the level of skill. All products requiring skilled processing, such as well-trimmed fish fillets, hand-laid octopus blocks and nobashi cut shrimps, can be offered by Vietnamese processors at a competitive price. When machinery is necessary, for example, in freezing technology, the best is used. The whole industry developed under the wing of VASEP and ended up looking the same: little difference in the way of processing, in the style of the industrial plants and in the style of presentation to the importing markets. The situation changed about 5 years ago when most of the former government-run factories were changed into so-called joint stock enterprises partly listed on the stock market and run by CEOs (chief executive officers) and boards of directors. Nowadays, it is the board that decides the fate of the factory and three categories are emerging: • • •

Good: aim to maintain quality Big: aim to expand and take over the competition Shiny: use marketing tools, brand concepts and special products aimed at up-market niches in the different importing markets (especially Europe).

The main driving force of the Vietnamese industry is the single director in the factory. Viet Nam is characterized by hierarchic family-based systems with orders given from top to bottom. Company directors have almost absolute power and the premises are as good as the directors who run them – there is no decision without the director. To understand the Vietnamese seafood industry, it is important to get to know the people running the companies, as – even with the application of standards (Table 1) – ultimately it is they who decide the quality and level of service.

Table 1: National and International Standards on Hygiene and Food Safety of/ Vietnamese Seafood Processing Plants in 2008 Nr.

1 2 3 4 5 6 7 8

Indicators

Meeting National Hygiene and Food Safety Standards Approved to Export Seafood to EU, Norway, Switzerland Approved to Export Seafood to Republic of Korea Approved to Export Seafood to United States Approved to Export Seafood to Canada Approved to Export Seafood to China Approved to Export Seafood to Russia Total number of industrial Seafood Processing plants

Total number in 2008 432 303 414 432 293 416 39 568

Percentage of total number of plants in % 76.0 53.3 72.8 76.0 51.6 73.2 6.0 100

Compared to 2007 in % 117 124 121 117 136 123 138 111

Source: NAFIQAD 2008 Annual Report / Dzung, VASEP

Modern processing technologies have been established. Hygiene, food safety and quality management improvement programmes are being implemented, such as HACCP and ISO 9000 standards. Many processing plants have been certified by higher and more complicated international standards, including BRC (Dzung). The head of the company runs the show in seafood processing. There are leading managing directors who pride themselves on never having visited or inspected their own production plant; they govern the industry from the office. On the other hand, women directors – who run some of the best factories in Viet Nam’s seafood industry – are more hands on. 8.5. Women and the fishery industry Women are present at every stage of the fisheries industry, from steering the trawlers to overseeing best practice processing and organizing trade, and in the seafood business the touch of a woman’s hand is akin to the handshake of the best business “man”. In Viet Nam, in particular, women have successfully run the seafood business for a very long time. A brief outline of some of Viet Nam’s key female players follows: •

•

Mrs Nguyen Thi Hong Minh (former Vice Fishery Minister of Viet Nam) was, together with Dr Nguyen Huu Dzung, for more than 10 years the driving force behind the Vietnamese seafood industry. From nothing to the world top ten in only 10 years, Mrs Minh is the mother of this “Made in Viet Nam” success story. Mrs Pham Thi Dieu Hien (Binh An Seafood JSC – Bianfishco) built an innovative new pangasius factory, a model for the entire industry (see company profile below). Mrs Nguyen Thi Anh (Song Tien Trading Co. Ltd – Sotico) runs one of Asia’s most famous clam factories and was the first to obtain permission to deliver clams into Europe. Mrs Tran Thi Hoa Binh (Cau Tre Enterprise – CTE) studied in Leipzig prior to building one of the most innovative added-value and tea production operations in the middle of Ho Chi Minh City. Mrs Nguyen Thi Thu Sac (Hai Nam Co. Ltd) runs a model enterprise for all kinds of catches and seafood from farming. Mrs Truong Thi Le Khanh (Vinh Hoan Co. Ltd) is a big name in pangasius processing and exporting; she launched a joint venture with Denmark to develop elaborate pangasius products for which she has received awards.

•

Mrs Nguyen Thi Tuyet (Camimex Co.) is a leader in the shrimp industry in Ca Mau on the tip of the Mekong Delta and she started an acclaimed project with organically grown shrimps in the mangroves. Mrs Le Thi My Linh (Agrex Saigon) – see company profile below.

8.6. Nam Viet Nam Viet (“Southern Viet Nam”) was founded by Doan Toi, a pangasius farmer who 10 years ago had a big pangasius aquaculture operation to supply the industry. Given the poor prices offered by the processors, he decided to begin his own processing and founded the first factory in 2000, followed by bigger plants in 2004, 2006 and, most recently, 2009. Toi targets the big markets. He began with the United States, followed by Europe’s main pangasius markets, the Netherlands and Spain, and is now the main supplier for the Russian and other East European markets. Doan Toi was the first Vietnamese processor to form a strategic partnership with a European importer – the Seafood Connection Group, Netherlands – and to build up the market together. Toi has also joined forces with two other (competing) major companies – Hung Vuong and Mekong Fish – to develop the Eastern markets. The factories of Nam Viet are akin to futuristic pangasius-processing spaceships. They combine modern and advanced hand labour with high-end industrial machinery-supported processing. Nam Viet (NAVICO) is now listed on the stock market in Ho Chi Minh City and accounts for 40 to 60 percent of the raw material, some of which comes from its own farming, the rest from contracted farmers. Box 8 summarizes Nam Viet; Box 9 gives a rundown on its four processing factories. Box 8 Nam Viet (NAVICO)

Location: Long Xuyen An Giang Province, Mekong Delta

Biggest pangasius processor and exporter in Viet Nam running: • four seafood freezing factories • one fishmeal plant • one packaging production facility

Total investment in factories: > USD 250 million

Export value (2008): USD 227 million (turnover USD 83 million, profit before taxes USD 25 million), i.e. 40 % of Viet Nam’s total pangasius exports.

Service and supply factories (in addition to the four processing factories): • NAVICO fishmeal plant • Factory facility for packaging material

Factories planned for 2010/11: • Added value pangasius products factory (for gelatine processed from fish skin) • Fish oil processing for human consumption

Farm sites: • 200-ha fish farm supplying 20% of raw material requirements of the four seafood processing factories

Box 9 NAVICO seafood processing factories 2

Nam Viet fish freezing factory (3 600 m , combined with Pacific Seafood, below) • Opened: September 2000 • Consumption: 300 tonnes/day raw material • Production: 100 containers/day

4 “Mycom” Thermo Jack IQF freezers, capacity 600 kg/hour, made in Japan 10 “Dantech” re-freezers, capacity 1 tonne/2 hours, made in Singapore 1 vacuum tumbler 10 “Cretel” skinning machines, made in Belgium 1 vacuum packaging machine 6 cold stores for 5 000 tonnes of product 2

Pacific Seafood freezing factory (3 600 m , combined with Nam Viet, above) • Opened: November 2004 • Consumption: 600 tonnes/day raw material • Production: 66 tonnes/day fillets

2 “Mycom” Thermo Jack IQF freezers, capacity 600 kg/hour, made in Japan 12 “Dantech” re-freezers, capacity 1 tonne/ 2 hours, made in Singapore 5 vacuum tumblers 6 “Cretel” skinning machines, made in Belgium

Atlantic Seafood freezing factory (21 000 m2) • Opened: July 2006 • Consumption: 1 000 tonnes/day raw material • Production: 333 tonnes/day

10 “Mycom” Thermo Jack IQF freezers, capacity 600 kg/hour, made in Japan 18 block freezing lines 18 “Dantech” re-freezers, capacity 1 tonne/2 hours, made in Singapore 18 vacuum tumblers 18 “Marelec” sizing machine, made in Viet Nam 22 “Cretel” skinning machines, made in Belgium 4 vacuum packaging machines 1 “Ulma” skin packing machine 6 cold stores for 10 000 tonnes of product 2

Indian Ocean freezing factory (32 000 m ) • Opened: August 2008 • Consumption: 2 100 tonnes/day raw material • Production: 750 tonnes/day • Workforce: 8 000

24 automatic filleting and trimming lines 15 “Mycom” super speed IQF freezers 25 “Dantech” re-freezers 18 contact freezers 6 cold stores to hold 24 000 tonnes of pangasius products

Four processing factories combined: • Employees: 14 000 managers, engineers and workers • Production capacity: 10 000 tonnes/month • Product output: 25 containers/day, 400–600 containers/month

8.7. Bianfishco Quality is central to the philosophy of Mrs Pham Thi Dieu Hien, General Manager of Bianfishco Pangasius Farming, Processing and Exporting Company. Ten years ago Hien opened a pangasius farm at the most beautiful spot on the River Hau running through the 55

capital of the Mekong Delta, Can Tho. Set in beautiful garden-like surroundings, it was stocked with the best pangasius juveniles and was the core of the Bianfishco Company that Hien runs today, integrating farming, processing and export with a unique quality concept. Some 200 ha of best aquaculture farming surrounded by trees, flowers and meadows opposite the processing plant on the banks of the River Hau supply 30 000 tonnes of high quality pangasius each year for the Bianfishco processing plant. The processing plant’s requirements are not entirely met and all supplying farms must follow the strict regime of “nature farming” to be accepted by the company as raw material suppliers. Bianfishco invested USD 30 million in its premises and a further USD 30 million in handselected technology from all over the world. The factory area on the opposite bank of the River Hau covers 30 000 m2; people come from Viet Nam and all over the world to admire the architecture of the fish processing plants. The factory and all administrative and service buildings are designed in a warm and human architectural style and are surrounded by gardens with flowers, trees – even little stone animals in the woods and streams. The “Disney Park” of pangasius processing, every detail seems lovingly planned. The factory itself could be said to remove some of these romantic dreams – a fully equipped, top quality processing plant with high standards of hygiene. There are 11 000 m2 of processing grounds, housing fully equipped pangasius processing lines. Box 10 provides basic figures on Bianfishco, Table 2 lists the equipment used. Box 10 Bianfishco

Farming: • Area: 40 ha • Capacity: 18 000 tonnes/year fish • Investment capital: USD 10 million

Processing: 2 • Total area: 30,000 m : − processing: 9 135 m2 − cold store: 1 271 m2 − wastewater-treatment: 1 000 m2 − office: 300 m2 − parking lot: 2 000 m2 − internal roads: 6 600 m2 − storage: 1 200 m2 − park plus pavements: 4 794 m2 •

•

Total investment (factory and manufacturing equipment): USD 20 million Factory capacity: 54 000 tonnes/year fillet products Turnover: USD 151.20 million/year Workforce: 3 200–4 000 Profit: USD 1.8–2 million/year Management staff: 60

By-products processing factory: 2 • Area: 7 500 m • Capacity: 300 tonnes/day sub-products • Total capital investment for building and equipment: USD 1.80 million • Current processing rate: 600 tonnes/day products • Processing capacity: 42 000 tonnes of raw material • Turnover: USD 60 million

Table 2: Freezing and Manufacturing Equipment: Equipment IQF freezers Contact freezers Cold stores

Screw compressors

Flat-ice machine Processing wastewater system Sorting machine Skinning machines Vacuum packing machines Carton packing machines Management productivity systems Shrink wrapper Cooling water systems Generators First filleting lines Trimming lines

Quantity (unit) 8 8 3

2 1 12 16 2 8 2 1 2 1 16 rows of tables 16 rows of tables

Capacity 500 kg per hour 970 kg per hour 2 000 tonnes (counting for total 3 cold stores) 3 600 kW per hour (counting for total 18 machines) 25 tonnes per day 1 500 m3 per day 900 kg per hour 900 kg per hour 500 kg per hour 3 600 kg per hour 120 tonnes/ per day

20 m3 1 500 KVA

Origin Japan UK Italy

Japan

France USA Belgium Belgium USA Japan Iceland EU EU EU EU & Viet Nam EU & Viet Nam

Mrs Pham Thi Dieu Hien is a hands-on manageress, who presents her cause in person. In the early days, she went around the world to dozens of exhibitions presenting her idea of top quality pangasius from Viet Nam. This is a relatively unusual approach for a fish often traded at very low prices; the business is competitive and processors, exporters and traders in Viet Nam hunt each other down, price cutting at every exhibition they attend. Hien goes against the grain. She asks her price, puts forward her idea of quality and argues when it comes to cutting pennies per kilogram: hard selling indeed in an environment of strong competition. Seemingly unbelievable, Bianfishco succeeded in creating brand awareness for its high quality pangasius, with markets and buyers in, for example, Poland, France, Germany and Spain and, recently, a branch office and production plant opening in the United States. 8.8. Agrex Saigon An examination of exported seafood commodities during 1998–2008 reveals that the seafood industry is diversifying production both horizontally (e.g. introducing more value-added shrimp products) and vertically (introducing new products). The proportion of ready-to-eat and value-added products increased from 17.5 to 35 percent in the 10-year period. 57

This trend is continuing. Value-added products are the most lucrative form of processing, in terms of both job creation, and overall profitability. The main value-added products at present are sashimi grade cuttlefish, cooked and peeled shrimp, and sophisticated fisheriesagricultural products (Dzung). District 7 in Ho Chi Minh City inhabits an industrial zone which is home to Viet Nam’s value-added seafood industry. In the heart of this district, near the river, Agrex Saigon (named after the old name of Ho Chi Minh City, Saigon) runs a 23 000 m2 factory producing high-end added-value products, mostly for the Japanese and the French market. The 20-year-old factory is neatly and perfectly run and meets all the latest standards of best processing practices under the strong and sensitive regime of Mrs Le Thi My Linh, the company’s general director, who heads some 1 200 workers of which over 1 000 are female. “Women bring the right senses for the products we make,” states Le Thi My Linh. In 1976, immediately after the war between Viet Nam and the United States, the company began as a government-run enterprise to process agricultural crops, such as rice, coffee and beans. In 1988, a seafood factory was built in the same area and is still in use today. The company went into seafood to satisfy customer demand. Agrex Saigon processes “on demand” the 300 products available on the company’s list. “We wait until we get orders and then we start,” explains Mrs Linh. This practice began with a first order from a major Japanese importer, Mitsui Company, serving mostly foodservice in Japan, their best customer to this day. The Japanese-style processing means that every production step is closely monitored in terms of traceability of raw materials used, hygiene and separation of the different production stages. The factory is on three floors with two basic processing lines: one for steamed, cooked and baked products; one for products which are processed fresh and then frozen. Each stage is undertaken in a strictly separate area: preparation, final processing and freezing. In the beginning, some 15 years ago, the Japanese sent their trainers to Saigon (now Ho Chi Minh City) and for over 2 years developed their product order until it matched the demands of Japanese style and quality. Two years ago, Agrex Saigon became a privately owned joint stock company. Current exports are to Japan (60%), Europe (21%), Korea (11%) and Australia, Hong Kong and some ASEAN (Association of Southeast Asian Nations) markets. The supermarkets of Ho Chi Minh City also stock Agrex products in the frozen counters. The turnover in 2007 was about USD 20 million and the total investment was USD 3 million. The worldwide problem of rising costs of agricultural products has also affected Viet Nam. “We must now pay some 50 to 100 percent more for basic raw materials compared to last year,” complains the general director, “but we can only raise our prices a certain amount – a very difficult situation for us to overcome at the time.” Agrex Saigon sells for export at an average price of USD 3–5/kg; prices cannot be pushed much higher, even when raw materials are expensive. The company (which is dependent for the main part on manual labour) is therefore considering installing more technology to cope

with the rising costs. It is also increasingly difficult to find good labourers as the Viet Nam economy is striving and more workforce is constantly needed for newly opened factories. The right balance must be found, however, as Agrex Saigon’s market niche remains “handand custom-made” seafood products. 8.9. Raw material requirement A booming industry can also have disadvantages. This became apparent to the Vietnamese seafood industry when the international financial crisis dealt a blow to the balance between processing and supply of raw material – indeed, Viet Nam’s production capacity is about three times greater than the volume of caught and home-grown raw material. The situation worsened when the financial problems in 2008 almsot wiped out 50 percent of the pangasius farming operations in the Mekong Delta and brought the others to the brink of bankruptcy. Leading hi-tech factories had been installed with huge investments to process even more fish to reach even more markets, but suddenly the raw material was lacking. Some factories are still only processing at 30 percent capacity at the time of writing (November 2009). VASEP began to lobby for free imports, as tariffs continue to be levied on the main products, such as shrimps and all kinds of squid, as well as white fish and tuna. According to VASEP, to exploit markets effectively, companies need to have enough materials to process. There are some 700 seafood processing companies nationwide while the domestic source can provide only 50 percent of the total materials demanded. In addition, aquatic exploitation is decreasing, as many fishermen have given up their careers due to increasing expenses, limited supply and poor profits. Some companies in Binh Thuan, Ba Ria-Vung Tau and Kien Giang said they just meet 40 to 50 percent of octopus export orders. (VNA) In the tuna industry the need for raw material from outside is particularly apparent: Viet Nam’s fishermen cannot supply the quality needed for further processing for world markets; Vietnamese boats only manage to supply fresh and canned tuna factories. Factories, such as Hai Vuong in Nha Trang, which serve the whole world with deep-frozen tuna products from steaks to loins, import on-board-frozen raw material from as far away as Africa; they then process it to re-sell it to Germany or the Netherlands. The constant lobbying of VASEP may well lead to a zero-tariff policy by the Vietnamese Government to allow the factories to run more efficiently. There are also segments of the industry promoting the takeover of Alaska Pollack processing from its Chinese competitors to increase the profitability of the Vietnamese factories. However, while these imports may save the industry in the short term, they can represent a threat for both fishermen and farmers suddenly faced with outside (often far cheaper) competition entering the country at the same rates as the domestic raw material supplies. Furthermore, the origin of the raw material – in particular for shrimp products – must be clearly declared when supplies enter for further processing in Viet Nam, not to mention the

question of double-freezing, i.e. material which arrives in deep-frozen blocks to be regenerated and IQF frozen again. Viet Nam is rightly proud of its quality legislation, which is one of the most stringent in Asia. There is a long list of harmful additives and substances whose use is forbidden on fishing boats and in farms and factories. The Government takes quality very seriously. Stringent controls need to be enforced on imported raw materials to secure the traceability of imported batches so that truthful declarations may be made. The future of the industry and its good name as a quality-conscious processing community depends on such regulations and their effective control. 9. TRADE 9.1. Strategic marketing

The Vietnamese are natural born traders. Even under government-ruled economy, thousands of small and pocket businesses flourished throughout Viet Nam: street stalls selling soup or other foodstuffs, small enterprises, mostly family-run, offering all kinds of services. The Vietnamese like to sell, and they like to bargain â&#x20AC;&#x201C; characteristics which suit the needs of the fresh market. Unlike Western trade systems, it is normal for everyone to offer identical produce, whole streets of competing furniture makers, carpenters and food stores selling the same product â&#x20AC;&#x201C; one can go from shop to shop and bargain prices. It is important to understand this background to appreciate the enormous effort made by the Vietnamese seafood trade to build a name for itself in over 150 markets in the world in just one decade. They went together, they all sold the same and they bargained prices as if they were at the local fish market at home.

9.2. Harmonious trading When the Vietnamese export assault was launched 10 years ago, VASEP created a Vietnamese “bandwagon” heading to the major world exhibitions with a group of willing processors and exporters offering their products (mostly shrimps and pangasius at first). Support came from MARD and the Ministry of Trade in the form of modest subsidies. They were also financed processors themselves and received aid from international NGOs – for example, SIPPO provided national booths where all the Vietnamese processors could exhibit and stand in small shacks headed by VASEP in the role of “Harmonious Mother of All”. This went on for years at all the main exhibition grounds, beginning with the annual Boston Seafood Exhibition in the United States, moving on to the Fish International Exhibition in Bremen, Germany or the European Seafood Exposition in Brussels, without leaving out Spain, Italy, Poland, Russia, Egypt, Brazil or Mexico – wherever there was an exhibition, the Vietnamese were the first in line. Initially, communication was difficult, as only a few of the processors and exporters employed English-speaking staff. However, the world of seafood importers gradually got to know the Vietnamese products and pangasius was the driving force. Viet Nam was literally sucked into the international seafood scene as a result of the rising demand for pangasius created by the growing shortage of white fish from wild catches. 9.3. Supply and demand The Vietnamese seafood industry is very much driven by the market demand for even more commodity products. Production increases to keep pace with demand. The focus of the Vietnamese fishery industry is on frozen products. In 2005, the processing plants had a combined capacity of 3 500 frozen tonnes per day (1 shift a day counted) and a total processing output was estimated at 1 400 000 to 1 500 000 tonnes a year. These figures do not include the production of products like fish sauce, paste and dried fish. In 2008, for the first time in its history, the fisheries processing industry processed and exported more than one million tonnes of products. It reached 1 236 344 tonnes, increased 33.7% compared to 2007, recognized the highest growth rate in the whole sector. (Dzung) Viet Nam is a supplier – not a seller – of seafood products. Most export and trade departments in the often highly modern processing enterprises see themselves as sales departments, but there is very little true selling. Reactive supplying is a more appropriate term. Vietnamese processors and exporters are very flexible when it comes to giving the customer what the customer wants, but they are not naturally innovative when it comes to driving a market with new ideas and products. This is apparent in the development of the structure of the Vietnamese seafood trade. Over 50 percent of the products sold are still pangasius and basic shrimp commodities. Pangasius is mostly delivered as a raw trimmed and deep-frozen fillet – not as a more sophisticated valueadded product. The Vietnamese seafood trade follows demand, going along with a changing market and customers’ wishes.

The mostly simple and first stage processed product range (the bread-and-butter business of the Vietnamese seafood trade) gives the country a very competitive edge in the importing markets. Most of the products are levied at low or subsidized tariff levels – imported as to-befurther-processed semi-finished products into the European Union at tariff levels of between 2 and 9 percent. Pangasius thus manages to be the lowest priced white fish source in most markets, creating strong competition for sea fish landings in the importing markets, sold for 20 to 50 percent more than their Far East competitor. 9.4. Prices Pangasius – the number one source of export and trade from Viet Nam – is a good example of the discount product strategy in the international seafood trade. At the beginning, some 10 years ago, the fish forced its way into the market with fierce price wars within the group of Vietnamese exporters. Buyers in the European market had it easy, gathering prices from all the Vietnamese suppliers offering an identical product: IQF deep-frozen pangasius fillet. They could cut the price down to the lowest level just by shopping from one supplier to the next. There were even leading processors and exporters from Viet Nam who attended the European exhibitions in order to wander from hall to hall cutting prices along the way. So each year, with the reliability of the rainy season, the price of pangasius was cut over three of four major exhibition days by an average of 30 percent. One buyer of a leading Dutch importer stated: “I just have to wait and every 10 minutes another Vietnamese pangasius trader comes along and cuts the price for 10 dollar cents compared to the one I saw 10 minutes before.” The whole business was driven by discount. The situation has now levelled slightly due to the fact that many first-hand producers have had to abandon the business, resulting in a shortage of pangasius for processing and export. Nevertheless, this fish – at USD 3/kg landed in the import market (CIF) – remains by far the cheapest available whitefish source. Sometimes, not even this price is reached; in desperate situations, farmers have “sold” into the Russian market for as little as USD 1.80. These figures require closer examination. •

•

To break even and gain a small profit of about 15 000 VND/kg (USD 0.80), the pangasius farmer must get the “minimum” price of USD 3/kg CIF. In times of desperation, farmers may not even get this price for their fish delivered live to the factory doors. As the pangasius has a yield of about 30 percent usable fillet, the incoming round fish price must be tripled to see the bottom line price for the processors, i.e. 45 000 VND (about USD 2.50). Then the colour must be considered. Pangasius comes in three to six different colours, of which only 50–60 percent are suitable for markets buying pangasius for USD 3.

It is clear that an average price of USD 3 cannot provide much profit. A fairer price would be about USD 3.50/kg CIF.

The policy of discounts which characterizes the international pangasius trade is to the detriment of the farmer and ultimately hurts the whole industry in Viet Nam. The “healthy” price of USD 3.50 would not damage the pipeline. For example, the largest discount retail chain in Europe sells a bag of top quality white pangasius fillets with only 5 percent protective glazing, no additives used, in a 500-g bag for €3.49. In other words, 1 kg of fish for about USD 10: that leaves ample scope for all parties to make a profit. 9.5. Service Viet Nam’s entry into the world markets was not always easy. The first exports to the United States – where pangasius was offered mainly as a substitute for the national icon, the United States catfish, and where Vietnamese shrimps were cheaper than those from Louisiana – resulted in two anti-dumping cases against the Vietnamese exporters (begun in 2002 and underway to this day). Millions have been spent by the Vietnamese industry board on lawyers and solicitors to fight these cases; while for shrimps the worst is over, in the case of pangasius the final outcome is yet to be reached. While not wishing to dwell on protectionism, a brief history of the Vietnamese-American seafood struggle follows. Pangasius came into the United States catfish market as a clear competitor being markedly cheaper than the national raised fish. United States catfish farmers had for years enjoyed an internal handshake agreement to sell their fish at USD 1.50/pound (1 pound = 453 g); the Vietnamese could easily match this and cut into the price. Some of the United States catfish producers were initially among the best customers of the Vietnamese processing plants, buying in cheap pangasius to re-sell it as “genuine” United States catfish on their own market. Rather than taking the chance to market their own fish, the Vietnamese industry kept quiet and enjoyed the benefits for as long as they lasted. Eventually, the catfish farmers, who have immense influence in the United States, reacted: they lobbied the Government in Washington and the DOC (Department of Commerce) to place high anti-dumping levies on Vietnamese imports; and they mounted a slander campaign against the “bad fish from Asia” accusing pangasius of “nibbling on anything it can find in the muddy waters of the Mekong”. No account was taken of the fact that United States consumers preferred pangasius to United States catfish, not only because of the price but also because of the improved taste thanks to the higher fat content. Likewise, no consideration was given to the fact that the United States catfish industry for various reasons is not able to supply market demand as it hardly surpasses 300 000 tonnes of annual farm output. Pangasius is badly needed. Viet Nam was declared a “No Market Economy” by the United States Government. This is totally misleading: the Vietnamese seafood business is the most capitalistic and competitive in the world and is absolutely free from government interference, let alone financial support. Nevertheless, the argument was accepted and pangasius from Viet Nam lost its place in the market as high levies were applied.

The greatest blow was the fact that the pangasius from Viet Nam lost the right to call itself “catfish”; only the United States Ictalurus Puncatus can now use that name. All kinds of funny names have since been invented to keep the fish in the market and some are totally misleading, for example, swai, hypo basa, basa swai, white river cobbler and white grouper. In 2008 and in 2009 (with Viet Nam’s entry into the WTO), tariffs were lowered for some producers, who now even enjoy a “zero tariff” for exports into the United States. Pangasius rapidly gained its ground, but there is no saying how long it will last. The "United States Farming Act” is now trying to put pangasius back on the catfish list. The Vietnamese would then lose their market segment – officially referred to as “like the US Original” – as they would be obliged to match the producing conditions of the United States: an impossible task. The pangasius protectionist drama (or black comedy) in the United States market is therefore far from over. The shrimp anti-dumping case went more smoothly. Viet Nam was just one of numerous competitors supplying the United States market: Thailand, India and other shrimp-producing countries suffered the same anti-dumping tariffs. The United States industry then realized it could not be self-sufficient in the long run and so in the last 2 years levies were reduced to a relatively normal and competitive level. Both cases (pangasius and shrimp) demonstrate how Viet Nam approaches marketing and sales in a reactive, not active manner. At no time during the fierce struggle was any effort made by the pangasius industry or VASEP to place a brand on either product. No effort was made to create a niche for the original and unique pangasius: rather than a valid alternative to United States catfish, it has only ever been marketed as a cheap substitute. 9.6. Target value There have been times when Vietnamese pangasius output has doubled but the profit remained the same. Marketing is an alien concept in the seafood industry, although there has been slight progress in the last 2 or 3 years. Marketing was initially regarded as nothing more than a tool to get more containers moving and one huge supplier of tuna was even heard to ask during a discussion: “How many containers can I sell by doing marketing?” There is next to no investment in marketing tools – with the exception of the shiny company catalogues all done by the same designer (even using some of the same pictures!) and sending the same message: “We all supply the same!” There is no tradition of product branding or communication. In the face of increasing competition, the price is cut; when demand is low, one waits for it to rise or, once again, the price is cut. Despite the active presence of an international operating industry board like VASEP, no strategic marketing takes place, researching markets for players who can support brands from Viet Nam and special products. Indeed, no serious effort has been made to do any generic marketing for the major products of Viet Nam. Next to no generic information is available about pangasius, and the legitimate questions asked by the market about the product are answered with low prices. Major importers in Europe have bought shiploads of pangasius while knowing nothing of the product as no one took the trouble to explain it to them.

However, in 2008, a system of Global GAP was established, leading to discussion about farming practices and aquaculture in Viet Nam. As a result, the first serious interest has been taken in pangasius, one of the top three white fish in Europe. Box 11 describes the general Vietnamese seafood exports to key markets during Januaryâ&#x20AC;&#x201C; October 2009. Box 11 Seafood exports

The sector earned USD 3.48 billion in export revenue, close to its target of USD 4.4 billion for the year, according to the Ministry of Industry and Trade. Of the total exports, shrimp and pangasius top the list, accounting for 36.9% and 32.7% in value, respectively.

The EU has become the biggest importer of fish from Viet Nam, accounting for 41.4% of the market share.

In Russia and Ukraine, markets saw a sharp fall of 67.7% and 44.5%, respectively, due to the economic downturn.

Spain (the biggest importer of pangasius in the EU) has declared that Vietnamese seafood meets EU food safety and hygiene standards. It imports an estimated 40 000 tonnes each year. While higher profits are expected as the economic downturn recedes, the removal of trade and technical barriers has also increased export growth.

The Japan-Viet Nam Economic Partnership Agreement took effect in early October, under which 86% of agricultural, forestry and aquatic products exported to Japanese markets enjoy preferential tax. To meet demand, VASEP has urged the seafood sector to supply sufficient raw materials for the processing plants. The country has 700 processing plants but they operate at less than 50% capacity due to shortage of raw materials.

VASEP has proposed that the Government cut the tax on imported seafood materials to 0%. The ministry says the sector should focus on potential markets such as Republic of Korea, which has an annual consumption of 7 300 tonnes of Vietnamese shrimp a year, and Russia, which has a high demand for pangasius. Japan and the Near East are also strong markets.

Source: VNA.

Box 12 describes the 2009 exports (compared to 2008) of the three main seafood commodities: shrimp, pangasius and tuna (as of 15 October 2009). Box 12 Exports

Shrimp. Exports reached 156 200 tonnes and USD 1.24 billion â&#x20AC;&#x201C; an increase in volume of 6.9%, but a decrease in value of 0.8%. In the first half of October 2009, exports from Viet Nam increased sharply: Switzerland (182.5%), Korea (175.9%), Canada (79.4%) and some ASEAN countries (443.9%). Meanwhile, exports to Japan, United States and Australia decreased 2.4%, 35.6% and 20%, respectively.

Pangasius. Exports reached 467 900 tonnes and USD 1.04 billion, a reduction of 9.4% in quantity and 10.1% in value. In the first half of October 2009, in some markets (e.g. Ukraine, Egypt, Russia and EU), the export value was reduced by 6.2 %, while in the United States and some countries of ASEAN, there was a marked increase of 74.5% and 51.1%. Hung Vuong Corp, Vinh Hoan Corp and Navico are the three leading export enterprises with an export turnover of USD 97.4 million, USD 88.9 million and USD 70.8 million, respectively.

Tuna. Exports reached 42 000 tonnes and USD 134.9 million, a reduction of 3.9% in quantity and 13% in value. In the first half of October 2009, positive growth was witnessed in markets, such as Canada (68.3%), Netherlands (51%), United States (16%) and Israel (3%), while imports were reduced in Germany (67.5%), Australia (59.8%), Japan (45%), Switzerland (30%) and Italy (22.3%). Source: VASEP.

To consolidate Viet Nam’s position in the world’s markets, the seafood industry and trade requires a convincing marketing strategy. The price war must be abandoned in favour of quality discussion, using marketing tools and product development to give stability and sustainability to the industry’s success. While price-cutting works in the fish market, in the export offices intelligence and strategy must be applied to decide the future of Viet Nam’s enormous seafood trade success. There are over 150 markets, representing a challenge; at present, only five markets actually generate serious profit for the Vietnamese processors and exporters. 9.7. Intricacies of trade Business in Viet Nam is not conducted in the same way as business in the West. This section describes some of the differences with the aim of improving the understanding between two cultures. First and foremost: the Vietnamese like their business. They are full-blooded, creative and flexible business characters who enjoy a challenge. They cannot be expected to know something if they have not been told; or from another point of view, everything in Viet Nam is possible as long as it is understood and agreed upon. Furthermore, nothing in Viet Nam appears to be routine, much has to be invented from scratch. Once a mutual understanding is established, the business runs to the benefit of both parties. The Vietnamese are immersed in family connections and this goes for business too. A good business partner becomes one of the family and is looked after as such. 9.7.1. Personal trade trip Viet Nam is very different from Western countries and it is important to go there in person, especially when doing business on a large scale. Sitting at home at the personal computer or even surfing the Internet extensively does not bring the experience of a personal trade trip. Not all is as it appears in Viet Nam, therefore seafood processing factories and those who run them need to be visited; manufacturing and trading conditions must be checked. Business trips can be arranged around the annual Vietfish Exhibition (in June); partners can be met at the exhibition ground and then visited at the farms, factories or other premises. Someone doing business with Viet Nam on a regular basis should go there once a year to renew the good relations and sign up the following year’s contracts. 9.7.2. Agents No market has as many agents and brokers – middlemen – as Viet Nam. It is better to buy direct. There is an extremely long list of complaints by international seafood importers who have been cheated by Vietnamese seafood agents. Middlemen may collect numerous orders, only to later pick the best and most profitable and ignore the others; they then select a factory somewhere – not always subject to proper controls – to fill the container in their best interest and not the customer’s. This can even be

done using a rented export code (with an extra 2 percent commission fee) and fake export papers. The latest trick in the agent business is to make believe that one runs a factory by creating websites with coloured photos describing non-existent factories while sitting in a rented apartment collecting orders by cell phone or e-mail. Middlemen in Viet Nam are potentially dangerous and should always be double-checked. They cost money (average commission is about 2 percent of the product value) and do not operate in the interests of the customers but adopt a take-the-money-and-run policy. Processors and exporters in Viet Nam are happy to serve the market directly. There is a list of contacts at the end of this report, and VASEP can provide a full list of genuine and trustworthy seafood factories and exporters. 9.7.3. Orders must be exact Such advice is probably appropriate for seafood trading worldwide; however, in Viet Nam it is essential that precise orders are given. All details must be included in the contracts in order to avoid misunderstanding. If an importer requests “belly flap fully trimmed”, this could well mean that belly will be left on the fish; a more specific description, such as “fully trimmed fillet – no belly left on” must be given. The exact colour of pangasius (white, light pink, pink, light yellow or yellow) , the amount of glazing on shrimps (and whether or not it is to be included in the weight), the use of additives and chemicals in processing (phosphates or non-phosphates) should all be defined. Anything left to chance can lead to unhappy surprises when the container is landed in the market of destination. Box 13 Pangasius Order (Example)

Contract No. 2 containers of 22 tonnes net [ = net weight] each of Frozen pangasius fillets, IQF [ = Individual Quick Frozen), skinless, pbo [ = partly belly on], Belly flaps trimmed [ = which means in this case some belly flap is still left on, it has just been “trimmed”] White meat, Sizes: 170–220 g/pc. [ = g/piece] and 220 g/pc., 20% glazing uncompensated [ = means water glazing added to the raw-fillet-weight], Pangasius hypophthalmus, Slightly treated [ = with phosphates or non-phosphates] according to EEC regulations, Packing: 1 × 5 kg bulk / carton with labels in English language, Destination: Bremerhaven, Germany Schedule:1 container etd [ = expedition date] until 20 November 2009; 1 container etd until 30 November 2009

9.7.4. Independent quality control Vietnamese processors do their job well. Nevertheless, as the saying goes: “Belief is good – Control is better”. If seafood is being bought from Viet Nam on a regular basis, it is worthwhile employing independent quality control. Nafiqad carries out modern checks to ensure the general hygiene conditions of the factories and also controls the general bacteriological situation of the products. It is nevertheless worthwhile having external people examine the containers during packing, verify technical and sensorial quality and check the residue and bacteriological situation. Such controls are normally not expensive and can be conducted throughout the manufacturing process. There is a list of references at the end of this report for independent control bodies not linked to processors or official administration. The price for checking one container – excluding laboratory costs – is €300–400. 9.7.5. Health certificate Every load of seafood leaving Viet Nam must obtain a health certificate issued by Nafiqad. Any seafood not bearing this certificate is not guaranteed. Following numerous problems and scandals related to poor products, Viet Nam developed a system of close monitoring of products coming from the processing plants. Any new threat is immediately taken care of by an order of the Ministry or the public health authorities. Seafood from Viet Nam gives no cause for fear, as long as the paperwork is in order, the traceability is clear and official and independent quality control is conducted to confirm the good quality of the product. It is said that pangasius may be one of the best checked fish species in the market and this is so. No other fish is subject to such stringent controls. 9.7.6. Shipping out Viet Nam is very well connected with the international shipping lines, most of which have contracted or branch offices in Ho Chi Minh City harbour. Shipping seafood from Viet Nam is not problematic. Freezing containers are usually 20- or 40-foot (holding 20 or 40 tonnes of product) and the average trip to the market is 25 to 40 days, depending on the destination. Transport costs about USD 4 000 per container. FOB (free on board) deliveries are not recommended as CIF (cost insured freight) is usually included in the selling price and it is better to leave the handling of and responsibility for the product with the Vietnamese exporters until the fish reaches its destination and the markets. Fresh products (very rarely ordered to date) can be flown out by direct airfreight containers from Ho Chi Minh City, Da Nang and Hanoi airports where product quality is guaranteed by international freight forwarders, such as Hoang Ha Company in Ho Chi Minh City, who deal in fresh tuna all over the world and run their own cold stores right at the airport.

9.7.7. Payment conditions The seafood trade in Viet Nam is conducted in US dollars and more recently also in Euros. Payment terms for first orders are normally LC (Bank Letter of Credit) at sight – a costly but safe system for the exporter to get paid. When relations between the business partners in Viet Nam and the importing markets become closer, often “cash against documents” is also accepted. Other, somewhat unorthodox deals are also made with the Vietnamese. The Russians, for example, often pay only 30 percent before the product reaches the country and then pay (it is hoped) the other 70 percent. Then there are the United States traders who buy in Vietnamese tuna catches on a commission basis and pay once they reach good (or not so good) prices depending on the colouring of the fish. 9.7.8. Currency and banking situation Since its integration into the WTO, Viet Nam has become fully adapted to the international monetary system. The most used international currencies are US dollars and Euros, but all currencies are more or less accepted. Vietnamese banks have become far more service-oriented and customer friendly in the past 3 years; there are no problems transferring money and business into Viet Nam. 9.8. Vietfish The annual Vietfish Exhibition takes place at the new modern Exhibition Centre opened in 2008 in Ho Chi Minh City, usually in June. The exhibition is jointly organized by MARD, the Ministry of Trade and VASEP. It is a very interesting and worthwhile visit for anyone looking into seafood from Viet Nam.

Box 14 Vietfish

Established in 1998, Viet Nam Fisheries Exhibition (Vietfish) is held annually in June in Ho Chi Minh City by the Viet Nam Association of Seafood Exporters and Producers (VASEP). 2

With more than 10 000 m of exhibit space, nearly 350 booths, every year Vietfish attracts approximately 170 international and local exhibitors and about 30 000 visitors from around the world.

This is an activity of VASEP to support all companies working in the fishery industry in frozen seafood, fresh, dried, processed, canned seafood and fish sauce, and some fish-related industries, such as additives, chemicals, machinery and equipment for processing, equipment for refrigeration and cold storage, equipment for packaging, information service, consulting service, professional organization and administration, government. Source: VASEP website.

Many international importers and buyers take the opportunity to come to Viet Nam once a year, spend 1 or 2 days at the exhibition and then meet their old or new business partners in the field.

9.9. Habits and customs Every country has its own style and its own mentality when it comes to business. The advice given below is based on personal experience and it should be stressed that the Vietnamese are not as simple as they look: the fact that they look so “familiar” to European and Western visitors is a potential pitfall. They are world champions in adapting to other cultures, they like business to be harmonious and they say what their counterparts like to hear – not what they actually think or even what might be “right”. 9.9.1. The same, but different Vietnamese always come in a crowd: they all do the same, offer the same, sell the same. Price differences aside, it can be very difficult to see from the outside who is a good producer and who is better left alone, as they all look the same. They are fundamentally different, however. Uniformity is a social habit in Viet Nam, an individual approach is frowned upon – the opposite of Western-style business management where the USP (unique selling point) is the focus in marketing. It is necessary to look more closely to understand what is different and what is the same.

9.9.2. Aunts and Uncles The Vietnamese love to integrate people into their world view based on family: the family system is everywhere. Even foreign partners become part of a family run by the Vietnamese. Business is going well if you are a middle-aged woman and get called “Co” (Aunt) or a middle-aged man addressed as “Chu” or “Bac” (Uncle). The Vietnamese do not like strangers and therefore choose to integrate their business partners in their seafood “family”. Beware, however, as family does not mean that everything always goes smoothly: as in every family, the fights can be fierce, but they never hurt as much as when carried on between strangers.

9.9.3. Do nothing without a Vietnamese If an importer wants to expand in the field of Vietnamese seafood, it is important to find a Vietnamese counterpart to support them in the market – not an agent, but a partner that can be a good and reliable contact to oversee the situation in Viet Nam. Vietnamese only listen – truly listen – to other Vietnamese. This is the result of their dependence throughout history on their own close relations against the rest of the world. Without Vietnamese support inside Viet Nam, an importer will remain an outsider and never truly comprehend internal situations in the Vietnamese seafood industry. Finally: learning Vietnamese is not a solution – Vietnamese are Vietnamese, no foreigner can ever become Vietnamese.

9.9.4. “Yes” It has been said that “No” does not exist in Viet Nam and there is some truth in this. The Vietnamese do not like to embarrass their counterpart with a negative answer. Pleasant as this may be, it can lead to problems as a specific request for special sizing or particular products may be answered with a “Yes” when a “No” would be more accurate.

Polite “white lies” are frequently told to avoid embarrassing a business partner, but they rarely have anything to do with reality. Another conditioning trait is that the priority is to sell what they have and to sell it today. The Vietnamese are not in the habit of worrying about the business of tomorrow as for centuries the need has been to eat every day and feed the family every day. The best approach in business is to obtain information from multiple sources and not rely on one source only. When entering business negotiations with Vietnamese seafood exporters, it is highly recommended to be better informed than them so as to cut out many of the polite “traps” set during the discussion.

9.9.5. “Sorry” The most frequently used expression in Viet Nam may well be “Xin Loi” (“Sorry”). The Vietnamese excuse almost everything – a habit that can create problems with the importing world. It is not obligatory to accept every “Sorry”, even if said sincerely. It is better to give the processor precise instructions from the very beginning, and wait for the “Xin Loi” afterwards. It should be made clear from the start that in certain respects, when it comes to product quality, technical specifications, supply and shipping dates and other crucial criteria in contracts, no “Xin Loi” can suffice.

9.9.6. Tet Everyone knows of Christmas, but very few people have heard of Tet. This family break brings Viet Nam to a halt every year for 4 full weeks from January to the beginning of February, and has often turned the hair of European seafood importers grey overnight. Tet – the Vietnamese lunar New Year festival – is the one time in the year when family members come home (often from very far afield) to celebrate that they are still alive and to catch up on a whole year. Just 3 days on the calendar become 4 weeks of family gathering, feasting and happiness. No Vietnamese is prepared to have this time spoiled, no extra pay or external pressure can force him to process seafood during this time. It is, therefore, necessary to study the calendar when relying on seafood from Viet Nam, especially pangasius, which has year round demand. In November, the coming Christmas season means peak seafood sales in Europe through to after New Year’s Eve. Sales then fall and pick up again around the carnival season in February, through Lent to Easter, which usually falls in April. In Viet Nam, there is a different situation. Christmas is celebrated for 1 day only: 24 December. Then families begin to prepare for Tet and things are quiet from December through to January until Tet starts. Once Tet begins, the emphasis is on the family reunion and the return of family members from overseas (called “Viet Kieu”) until mid-February. In practice, almost no seafood processing takes place between December and February – the very months when the European importers must get supplies for the Easter business (taking into account the 30 days required to ship the seafood orders to their doors). An informed importer purchasing seafood from Viet Nam, therefore, orders in November all they need to satisfy requirements until April of the following year. Other important considerations are that in many regions no shrimp farming takes place during the winter months and that pangasius harvesting starts again in March. It is therefore the "early birds" who catch the business and receive their Easter supplies from Viet Nam before Christmas.

9.9.7. Eating together It is said that the eating times of 11 am for lunch and 5 pm for dinner are the only laws strictly followed by the Vietnamese. An invitation to one or the other is the natural order of things. Business partners eat together, there is no getting away from this. It is not combined with hard drinking as in the Chinese culture, but an eating invitation is an essential follow-up to business talk. The Vietnamese love to socialize when eating and any importer who comes to Viet Nam and has good relations with his Vietnamese partners can be sure to celebrate a 2-hour feast when invited to lunch or dinner.

10. ECOLOGY AND ENVIRONMENT 10.1. Green is the future

The environment is a hot topic of discussion nowadays. How healthy is the planet we live on? How healthy is the food we gather? These questions make big news in the developed countries of the Western world. Children worry about whether what they eat is “environmentally friendly”, mothers are frightened about “polluted” seafood, fathers are concerned about what will happen if shrimp farming increases global warming. Such concerns are often generated by watching television programmes on the Discovery Channel, by paying attention to the daily apocalyptic news of animal protectionist groups, such as WWF, or by fighting alongside Greenpeace at home on the couch against whaling in the icy waves of Norway. The upshot is a rising demand for ecological, organic, socially and politically correct seafood products for which better prices are paid and which are demanded also from Vietnamese producers and exporters. Viet Nam has only just latched on to this movement that already covers the whole world. Most Vietnamese still look somewhat perplexed when asked about ecologically correct

behaviour, because until yesterday they did not even know that such a thing existed. But they adapt fast. The Government has placed “Green” issues at the top of the agenda, especially in the seafood industry. 10.2. “Pure”, “Blue Planet” or “Bio”? The main concern in Viet Nam regards the farming methods adopted for pangasius and shrimps in Vietnamese aquaculture and the quality of the water. Indeed, water is the main source of problems in farming and it affects, when disturbed at its natural source, everyone, not only the farming community. NGOs, organic certifiers and quality standard bearers come to Viet Nam to implement their ideas (ideas born and nurtured in the West) in the Vietnamese farming community. This cannot work. Rather, it can only work if these quality control systems are adopted on the premises at the very beginning of the processing line, i.e. the fish farms. About 5 years ago, Agifish, the leading processor of pangasius, gathered a group of about 100 farmers from AFA to found the “Agifish Pure Pangasius Union” (APPU). APPU received training from the Swiss-based SGS certification group, which installed the SG 100 System, comparable to the internationally recognized GAP method. However, importing buyers were indifferent to the efforts of APPU: the farmers followed the rules of good farming practices, but were rarely paid better prices for their fish in the importing markets. APPU still exists today and awaits recognition of its good practices. The next initiative came from the market, when Seafood Connection, the major importer of pangasius in the Netherlands, created its own brand called “Blue Planet”, setting standards which go beyond farm practices. Blue Planet certification begins with the fertilized egg and goes through the hatchery system, the farms, through to processing and the final stages of the product. The Blue Planet method is an auditing system to which producers are obliged to adhere – it is not voluntary. The controls are now based on GAP. At the European Seafood Exposition 2009 in Brussels, with the agreement of a consortium of major players in the aquaculture business and importers, Global GAP was born. Taken from the agricultural control system adopted worldwide and to great effect, in the case of fish farming the “A” stands for “Aquaculture”. A separate Global GAP standard exists for pangasius. It is manageable and intelligent, but nevertheless making pangasius farmers adopt these standards is no simple matter. Buyers in Europe, in particular in Germany, are demanding this certification on pangasius products, and some are even threatening to buy no pangasius at all if Global GAP does not become part of the product information on their retail bags. The poor Vietnamese farmers are without support. GTZ and the multinational cash and carry giant, Metro, in cooperation with the Dutch Importer, Anova, have expressed their concern and offered support, but practical assistance is required.

The crucial question concerning pangasius farming and GAP is: Who installs? and – even more difficult – Who controls? 10.3. Bio and sustainable “Bio” (biological) is the synonym for the English “Eco” (ecological). About 5 years ago, Naturland (the German eco-brand) began its search for a so-called bio-pangasius in Viet Nam. The standards applied by the Germans were somewhat questionable from the start. The Naturland group came from a background of salmon and brown trout. In Viet Nam with its warm water pangasius, they adopted criteria normally applied to coldwater fish. For example, farmers were made to process their own feed (contrary to today’s standards which specify that industrial produced feed gives greater consistency in the fish quality). Naturland also selected certain river areas as “too polluted” and others as “not yet overcrowded” – descriptions lacking in clarity. Nevertheless, a “bio” pangasius was founded, mostly for sale in the German market (Figure 7). Bio-pangasius did shake up the market a little and created quality and ecological awareness, but it made no change to the general pangasius farming situation in Viet Nam. 10.3.1. WWF in Viet Nam WWF established the Marine Stewardship Council (MSC) in fisheries and it is practically a synonym of “sustainable”. MSC fisheries are well regarded by MARD and considered the way forward in fisheries management. Some fisheries have already managed to obtain the valuable MSC label, endorsed by WWF, and it represents an open door into retail and the quality shelves of European seafood counters. Ben Tre clam fisheries were approved by WWF as sustainable, receiving MSC certification in November 2009 and becoming the first fishery in Southeast Asia to meet the organization’s sustainability and management standards. Their experience is described below. Nationally renowned Ben Tre hard clams (Meretrix lyrata) are picked by hand using metal rakes and collected in mesh sacks. Once collected, the clams are sold to domestic markets and exported to Europe, the United States, Japan, the Chinese mainland and Taiwan Province of China. Ben Tre Province boasts 65 km of coastal area and contains more than 4 800 ha of protected mangroves. In this important region of tremendous biodiversity, clam fishery plays a vital economic role. The fishery is operated by local cooperatives that provide close management and surveillance of the brood stock and harvestable clams within their area. Support and advice are provided to the cooperatives by the Ben Tre People’s Committee and the province’s Department of Agriculture and Rural Development (DARD). Ben Tre DARD and WWF cosponsored the MSC certification process, and the WWF Fisheries Officer, Nguyen Thi Dieu Thuy, declared: It is our pleasure to contribute to the first MSC certification in Viet Nam and in Southeast Asia. One of our major tasks is to harmonize economic development with the maintenance of

the natural environment. MSC certification of the Ben Tre clam fishery is such a success. Importantly, the Ben Tre fishery can now serve as a model sustainable fishery at both national and regional levels. (VNA) The Government of Viet Nam and the MSC signed a Memorandum of Understanding (MoU) in May 2005, declaring their joint commitment to sustainable fishing in the country by promoting and facilitating MSC certification. The initial agreement was for 3 years and was renewed in 2008. Other fisheries in Viet Nam are expected to obtain MSC certification like Ben Tre. In their favour is the fact that the fishing methods are the same as those used in the 1900s â&#x20AC;&#x201C; a far cry from what goes on in developed countries where high-sea freezer trawlers empty the fish stocks like Hoovers. WWF has organized a series of seminars and workshops inviting stakeholders in the different industry branches to find a way to make pangasius and shrimp farming sustainable. WWF has been working on the establishment of standards for pangasius farming since 2007. Opinions have been collected from every party involved in the pangasius farming industry, with the aim of introducing internationally accepted standards that both protect the environment and benefit society. As of 2011, the standards will be applied to two types of fish raised in Viet Nam: Tra (P. hypophthalmus) and Basa (P. bocourti). The regulations are expected to address both environmental and social issues arising from fish farming, from legal compliance to the use of land and water, water pollution, the management of feed and chemicals, safety and the health of pangasius farmers. WWF has to date organized eight seminars, gathering the opinions of over 2 000 people on how to formulate farming standards for 12 types of seafood (VNA). It has yet to be decided whether WWF will adopt Global GAP as their own standard of sustainability. The alternative is for WWF to take out its own certification system and compete with Global GAP. Until this becomes clear, farmers are not in a position to act. The installation of any certification system is a costly undertaking, a factor not to be disregarded. As highlighted by Ngyuen van Hao of the Government Aquaculture Research Institute at the Metro-GTZ meeting in Ho Chi Minh City, most pangasius farming operations are small size: 72% are < 5 ha, while 76% yield only 2 300 tonnes/year. A farm may make a profit of 1 000 VND (18 000 VND = USD 1) per kilogram of harvested fish. If a certification system costs several tens of thousands of dollars and a certifier takes another USD 10 000 to carry out the audit, the average Vietnamese fish farmer cannot afford it.

10.4. Bio shrimps Ecological seafood production in Viet Nam first took place in Ca Mau when the Vietnamese successfully rebuilt their mangrove forests at the mouth of the River Mekong following the war with the United States. Ca Mau is one of the most important areas in the Mekong Delta for shrimp farming. It covers a wide area and is done in harmony with nature. This harmony is now threatened as the drilling of wells is now commonplace amongst shrimp breeders in Ca Mau and other Mekong Delta areas. There are around 400 000 wells in the Mekong Delta and most of them belong to local families using them to meet household and irrigation needs. However, the overexploitation of groundwater for shrimp farming will push the Mekong Delta and southeastern provinces towards a critical water shortage over the next decade, experts have warned. Duong Van Vien, a lecturer from the Water Resources University, says the groundwater level in the Mekong Delta will drop to “dead” levels by 2014 if no action is taken to tackle the problem. Further warning comes from Tran Van Thanh, Deputy Director of the Soc Trang Province Department of Natural Resources and Environment: “Groundwater levels are between 12 and 14 m lower than they were 10 years ago, with the highest decrease of up to 17 m in some places.” Duong Van Ni, Director of the Hoa An Biodiversity Application Research Center, Can Tho University, stresses that it is wasteful for farmers to drill wells up to 120 m deep to extract fresh water only to mix it with seawater to produce saline water for shrimp farming. Many families in Cau Ngang and Duyen Hai districts in Tra Vinh Province use up to three wells each for household use, shrimp farms and crop irrigation. The Tanh Nien News reported of a Bac Lieu Province farmer, Nguyen Van Ut, who said he had begun pumping groundwater to his shrimp farm several years ago: “The water becomes more salty in the dry season and that can slow the growth of the shrimp. Many farmers cope with the problem by pumping groundwater into their farms,” adding that some farmers had as many as five wells for that purpose. Bio-shrimp farms have been installed in Ca Mau with the aid of SIPPO and Camimex (a processor). Although a very small-scale operation, it represents a good start. Bio-certification requires that the shrimps not be fed but that they feed themselves and are then caught unsorted, i.e. more a catching than a farming operation. The Swiss retail Group “Coop” imports all of these shrimps as a “bio” product. 10.5. The Mekong River The Mekong River Delta is probably the most sensitive ecological area in Viet Nam. It is dependent on seasonal flooding and the change from salty seawater to freshwater and the resulting mix: the brackish areas. The river transports alluvial soil which fertilizes the fields so that rice farming can take place.

The Mekong Delta is the foodstore, not only of Viet Nam, but – in terms of rice exports – of the whole world; its ecological balance is threatened. The threat does not come from aggressive industries established in this area – even the seafood processors in the Mekong have learned to build modern wastewater systems to clean their used water and return it (often of drinking water quality) to the surroundings. The main threat to the Delta is the rising population which has seen an explosion during the past decade. For example, 10 years ago around 300 000 people lived in Can Tho (the “capital” of the Mekong Delta) and its surroundings; the current population is 1.5 million. Household waste is the main problem (as it is in the rest of Viet Nam). No effective system exists to protect the groundwater and the soil from discarded waste and from the off-flows of the heavily fertilized fields. However, aquaculture also plays its part. The challenge is to take control of the Mekong Delta water system and save it from overuse through household waste, aquaculture activities and industrial (mostly chemical) pollution. The situation is described in further detail in Box 15. Box 15 Pollution in the Mekong

Groundwater in the Mekong Delta City of Can Tho is heavily polluted by contaminants released by aquaculture farms and industrial activities, according to city officials. The city’s 12 216 aquaculture farms use at least 70 billion litres of clean water per day.

The wastewater discharged into the environment by these ponds has elevated the COD (chemical oxygen demand) in the groundwater to 10 mg higher than the normal level. One litre of aquaculture wastewater contains 80 mg of COD.

The COD test is commonly used to measure the amount of organic compounds in water, and most applications of COD determine the amount of organic pollutants, making COD a useful measure of water quality.

Industrial parks and facilities have also contributed to the excess by discharging 45 million litres of wastewater per day, with one liter containing 150 mg COD. Annual tests from 1998 to 2008 showed that COD content in the Can Tho River had risen dramatically, with one litre containing only 3 mg in 1998 but 28 mg in 2007. Source: VNA

VASEP recognizes the problem and is seeking a solution: The environmental impact of aquaculture in Viet Nam has been alarming. The government has been concerned not only with environmental losses, but also with economic loss from the negative impacts on capture fisheries production. Fisheries provide more than half of the animal protein needs in the country, in addition to substantial foreign currency earnings through exports. Aquaculture is rapidly becoming an important sector of the fisheries industry, but it should not be allowed to negatively impact on the capture fisheries. (Dzung)

10.6. GMOs The rise of GMO products represents a threat to the world’s ecologically aware community, and fish and shrimp farms are not exempt. Fish that can grow in half the time, shrimps that can reach double size in half a normal growth-cycle – these are the results of genetic modification, and the chain reaction kick-started by setting these artificial organisms in natural surroundings is feared by experts all over the world. Viet Nam has recently decided to examine more closely these GMO threats and to not install these organisms in fields and ponds without scientific approval. This is excellent news for importers and consumers who want to buy seafood and agricultural produce from Viet Nam with a clear conscience. A newly-proposed food safety law should restrict the amount of genetically modified elements in food, the National Assembly of Viet Nam representatives said. Most representatives agreed with proposals in the draft law that would require stricter management of genetically modified (GMO) food, but they also criticized the law for not stipulating the maximum limits of these elements permissible in food. Genetically modified foods are those derived from genetically modified organisms that have had specific changes introduced into their DNA by genetic engineering. According to the draft law, foods using GMO materials must be certified as biologically safe by authorized agencies in the country of origin. Greenpeace, a US-based environmental conservation NGO, has described the use of GMO food and crops as “a disaster”. (Thanh Nien News) 10.7. Education and control needed There is the will to conserve the natural ecology of Viet Nam. However, the population must be made aware through education; Western standards cannot simply be imposed. Ecological awareness has been growing in Europe ever since the mid-1970s when the Green parties were founded; Viet Nam has no such public awareness, yet. It took over 30 years in Europe to install ecological habits across generations, while Viet Nam has still to begin. The good news is that the Vietnamese – including the seafood industry – adapt fast. They want to be involved in the markets where their products are handled, they want to be of service. Ecological awareness is a matter of education, beginning with the basics, such as waste management, water use and hygiene. These “normal” things that are taught at school in Europe are new to a country like Viet Nam. The political will is there to strive towards strong competitiveness while assuring sustainable development. The Ministry of Fisheries is responsible for fishing, aquaculture, processing, exporting and fishery services and adopted a long-term strategy for sustainable development to 2020. In January 2006, the Government approved its Master Plan for Development of Fisheries until 2010 and its vision until 2020, in which the sector strives to be a commodity production sector, developing rapidly and in a stable manner. Actions include: •

reduction of the number of fishing vessels;

• • • •

improvement of state management of fisheries resources; control of fisheries quality; synchronous investment in fisheries, fishermen and fishing grounds; and incentives to raise fish in the sea and apply advanced technology in fish and shrimp breeding.

Nevertheless, the Vietnamese fisheries sector continues to struggle with unsustainable development in both long-term and short-term activities (Dzung). There is no point installing ecological awareness systems in Viet Nam without appropriate controls. Global GAP, MSC and other technical, social and ethical requests placed on farming and processing systems and seafood products can only be effective if they become routine and are subject to regular checks. This is the mammoth task faced by the Vietnamese seafood sector in the years to come. 11. OUTLOOK 11.1. Sustaining the success

Finally, let us examine what the future holds for the Vietnamese seafood sector. One thing is certain: Viet Nam is one of the top ranking global seafood suppliers, yet the capacity of catch and farming opportunities is far from fully developed – even in pangasius there is still a lot to gain, not to mention farming in the sea and fishery along the coast.

The main segments are analysed below to understand how to make them sustainable, lasting and profitable. 11.2. Pangasius Studies carried out in the Mekong Delta show that Viet Nam could easily achieve 2 million tonnes of pangasius harvest every year. The water is sufficient, the fish is native to the Mekong Delta and it is farmed easily. However, water management is required and sustainable systems must be installed. To date, farming operations have been – at best – rural and they cannot cope with any “industrial” standards. Global GAP is a “blessing” for pangasius farming in Viet Nam and should be rapidly and efficiently installed. The pangasius industry should be committed to supporting the farmers: there can be no prospering seafood industry without an economically healthy fish farmer. A bottom line price must be set for the farms. There is no reason why the farming operations in Viet Nam cannot go the same way as their salmon counterparts in Norway to become fully integrated parts of the industry process. The farmers could become employees of the processing company, which in turn could be changed into a fully controlled operational branch of an integrated supply and production chain. Another important consideration is that Viet Nam is no longer alone with pangasius. The success is there for all to see and pangasius will spread to wherever farming conditions allow it. It is a major white fish source destined to compete well against white fish catches from the sea. It is, therefore, essential that the Vietnamese pangasius industry works on branding and marketing to establish awareness of their special quality and special conditions; Viet Nam is a world pioneer of pangasius and must not lose out to more aggressively marketed or cheaper competition from elsewhere. Pangasius is on the world map of white fish business and Viet Nam is at the centre of this business. Every effort must be made to make this success sustainable and help Viet Nam maintain its dominant position. 11.3. Shrimps Shrimp farming in Viet Nam has to date concentrated on black tigers, but a shift is to be made towards vannamei. The pressure on the global shrimp market will force the Vietnamese farmers (who have better and more ecological conditions than their competitors in Thailand, China or India) to introduce this white legged shrimp into their farms in order to remain competitive. In the United States, it is likely that the anti-dumping case against the Vietnamese processors will be removed and access to this major shrimp market will become easier again: It is very likely that Viet Nam will escape from the anti-dumping tariff on shrimp after the review to be held in early 2010. According to the Viet Nam Association of Seafood Exporters and Producers (VASEP), the last administration review of Viet Nam’s frozen shrimp products

exported to the United States for the period between 1 February 2007 and 31 January 2008 has been completed and shows goods signs for Viet Nam. The association said that the last review revealed some changes in comparison with the preliminary review announced in March 2009. Many more Vietnamese shrimp exporters have received anti-dumping duties of nearly zero percent. (VNA, 18 Nov. 2009) Organically grown shrimps are a great opportunity for the Vietnamese shrimp industry, and their potential has not yet been reached. The "Bio" or "Eco" movement gets stronger by the day and should push Viet Nam to use its natural conditions in the Mekong Delta and other areas (e.g. Nha Trang) to make the future of ecological shrimp farming. Adding value is another valid option for Viet Nam’s shrimp industry. The volume of shrimps for further processing can be increased and innovative shrimp products already processed for Japan can also be offered to Europe and other countries in the Western world. 11.4. Water farming To date, most of the farming in Viet Nam has taken place in freshwater or brackish water environments. Extensive seawaters remain to be conquered. While there is scope in freshwater for more tilapia farming, for example, the sea offers endless opportunities for new fish species, such as cobia or barramundi. Viet Nam’s aquaculture industry is in urgent need of diversification and sea farming offers this opportunity. The monostructural dependency on pangasius and shrimp farming could be diversified by good and environmentally aware sea farming. What is more, the sea is in a far better condition than the vulnerable freshwater source. International and domestic investors could be sought to go into this sector, as has already been done in a pilot scheme by Norwegian and Taiwanese Province of China enterprises who have placed their money and knowledge into cobia farming. Another valid option is shellfish – from abalone to blue mussels, oysters and clams – for which Viet Nam has good seawater farming conditions. The country has a varied climate: in the north, coldwater shellfish could be grown; in the south, the typical Pacific range could be farmed. 11.5. Fisheries As mentioned above, only a fraction of Viet Nam’s seas are used at present. Viet Nam boasts a huge fleet of fishing boats, 99 percent of which are not up to modern standards. This is a positive and a negative situation. It is positive for line caught, perfectly hand-handled catches that do not overfish the sources. It is negative when too many fishermen catch on the same fishing ground and the hygienic conditions on board and at the landing places do not match international standards. Sustainable fishery management is what is needed in Viet Nam. The fish stocks must be controlled through a licence system that works not only on paper, but with effective controls

once permission to fish is granted. Fishing boats that do not endanger the lives of fishermen and which enable the catch to be kept in good condition must be built. The advice of the international fishing communities must be sought and investment is needed in modern, small but safe boats. Good landing places should be built to allow a sealed line from the catch through landing, all the way to the processing plant. In particular, attention must be paid to tuna: good catch is currently wasted when not handled under the right conditions; marketing is required to build awareness of the high quality linecaught tuna of Viet Nam. In summary, tuna is a high-value declining source in the world market. Viet Nam still enjoys healthy stocks; there are, therefore, good opportunities to promote Viet Namâ&#x20AC;&#x2122;s tuna and also to obtain MSC certification. 11.6. Industry The industry in Viet Nam is destined to be increasingly driven by modern processing technologies and less dependent on manual labour, as the availability of the cheap labour force declines. Most of the factories for seafood processing are located in rural areas which are being abandoned as the population heads for large urban areas. Increased technology at all stages, from filleting to further processing, will be needed in the factories. The other crucial factor is the importing of raw material, which seems inevitable. Viet Nam runs a modern high-capacity seafood industry; sufficient quantities of fish are required for the industry to run full throttle and at a better profit, in order to make the sector prosperous and sustainable for the future. Traceability of the seafood source will then become an issue. Vietnamese processors may go into salmon or Alaska Pollack. What is more likely is that imports for processing will concentrate on products that are already exported by Viet Nam, such as shrimps and cuttlefish; the imported sources will simply allow supply to meet the high industrial processing capacity. 11.7. Trade The mainly demand-driven Vietnamese exports must change â&#x20AC;&#x201C; from simple supply to real selling. Marketing supported by market research and strategic and innovative customer service is essential. Good public relations and advertising are other requisites for the future of the Vietnamese seafood trade. Attending international exhibitions en masse was a good start and helped to create awareness of seafood from Viet Nam. Constant trade promotion, however, provides no real answer to the modern questions asked by of ethically and ecologically aware seafood consumers. There needs to be more intelligence, more communicative and experienced product quality and less bargaining. The general trend, especially in the main markets of Europe and the United States, is towards ethical marketing. Consumers ask a lot of the products in their country of origin.

Viet Nam has nothing to hide in this respect; it can answer all questions, but it must start to do so. Processors and exporters need to build up their own marketing boards and depend less on the “Mother”, VASEP, which must in turn change from a simple trade promoter to a generic marketing institute. It is imperative that these changes happen now. Too many questions are as yet unanswered by the Vietnamese seafood trade about the main fish source exported, pangasius. It needs clear naming and clear guidance so that the markets can understand what this fish is about. 11.8. Environment The environment is a key factor in the seafood sector. The seafood industry is crucial to the Vietnamese economy and the ecology is crucial to the seafood industry. The raw material – the fish – must come from a healthy environment. Viet Nam’s natural environment is still intact – more so than in many countries that set standards for ecological farming and fishing. How long this lasts depends on raising awareness in the industry, the farms and among the very people working with fish and seafood. All the stakeholders of this industry are faced with a huge administrative, control and educational task. The first steps towards GAP, for sustainable fishery and hygienic and ecological processing methods have been taken. This direction must be maintained. A healthy environment in Viet Nam is crucial, not only for seafood and agricultural production, but also for the growing tourism business. 12. CONCLUSIONS Viet Nam boasts an abundance of aquaculture resources, in both its seas and farms. It has built up a booming seafood sector in only a decade. To ensure sustainable and long-lasting success, the help and cooperation of all sectors in the seafood business in Viet Nam and abroad is required. As the famous Father of modern Viet Nam, Ho Chi Minh, declared: “ðoàn kết ñoàn kết ñại ñoàn kết.

Thành công thành công ñại thành công.” (“Everything can be achieved, when we work together!”) The miracle of Viet Nam’s liberation after a century of bloody wars, and now its entrance into international trade, has brought many benefits for the daily life of the Vietnamese. The best thing about the success of the Vietnamese fishery and agricultural sector is the fact that a country stricken by hunger and famine only a generation ago can now not only feed its own people, but supply quality food, including high-class seafood, to the whole world. FAO acknowledges this in its report about the fight against poverty and hunger: The United Nations Food and Agriculture Organization (FAO) has named Viet Nam as one of the four most successful countries in reducing hunger. The organization based its conclusions

on four main criteria – the creation of an enabling environment for economic growth and human well-being; outreach to the most vulnerable and investment in the rural poor; protection of achievements and; planning for a sustainable future. "Viet Nam coupled its open market policies with significant investment in a nationwide social security system that provides financing for health care, pensions for retirees and support for the temporarily unemployed," the report said. A nationwide social security system, investment in rural infrastructure and several targeted programmers have enabled Viet Nam to cut its poverty gap ratio (those living in poverty were deemed to be earning less that USD 1.25 per day) from 24 percent in 1993 to 11 percent in 2002, while simultaneously integrating the economy into the global market. (VNA) The “V” in Viet Nam could stand for “Victory” in the global seafood business. This Victory must now spread: to environmental awareness; to traceability to guarantee quality throughout the modern supply system; to marketing so that the whole world can learn of the “Waterland” of Viet Nam and the quality seafood available for the whole world. 13. FACTS AND FIGURES (Selected statistics) 13.1. General situation

Figure 1: Viet Nam Fishery Sector 1995 to 2008 1,000 MT

19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08

5000 4.580 Wild catch Aquaculture 4.160 4500 3.696 4000 3.432 3.074 3500 2.859 2.648 3000 2.435 2500 2.003 1.828 2000 1.5701.669 1500 1.3441.338 1000 500 0

Source: Dzung/VASEP

Table 3: Top 10 World Seafood Exporters Exporter

1 2 3 4 5 6 7 8 9 10

China Norway Thailand United States of America Denmark Canada Chile Viet Nam Spain Netherlands

1996 MioUSD 2 857 3 416 4 118 3 148 2 699 2 291 1 698 504 1 447 1 470

2006 MioUSD 8 968 5 503 5 236 4 143 3 987 3 660 3 557 3 358 2 849 2 812

Source: Dzung/VASEP (APR = Annual Production of World Supply in %)

13.1.1. Pangasius Figure 2: Pangasius Export Market Shares, 2008 EU, 40.02

Other, 16.59

China, 2.48 Egypt, 3.78 Mehico, 4.11 ASEAN, 5.21 USA, 5.41

Ukraine, 9.45

Rus sia, 12.97

Source: Duong Report

APR in % 12.1 4.9 2.4 2.8 4.0 4.8 7.7 20.9 7.0 6.7

Table 4:Viet Nam Frozen Pangasius Fillet Export in 2008 Markets

EU In which: Spain Germany The Netherlands Poland Russia Ukraine United States ASEAN In which: Singapore Thailand Mexico Egypt China In which: Hong Kong Other countries Total Source: Dzung/VASEP

Year 2008 Volume Value, Tonnes Mio USD 224 311 581 500 46 237 121 863 41 959 110 838 33 278 91 996 37 056 81 027 118 155 188 454 74 359 137 256 24 179 78 559 33 953 75 751 11 237 25 222 8 163 22 415 23 154 59 685 26 630 54 918 18 519 35 975 16 647 32 972 97 568 241 002 640 829 1 453 098

Table 5: Pangasius Export Price Situation Year 2008 Products January February March White meat 2.70 3.00 2.55 Light Pink 2.65 2.95 2.50 meat Pink meat 2.60 2.90 2.45

Products White meat Light Pink meat Pink meat

Changes compared to 2007 in % Volume Value

+29.8 +28.0 +61.5 +11.1 -3.9 +142.5 +223.4 +14.1 +0.6 -7.6 +0.7 +61.6 +324.6 +1.7 -2.9 +101.0 +65.6

April

+23.8 +20.6 +49.3 +5.2 -8.3 +109.0 +249.0 +16.2 -2.4 -9.9 -5.5 +49.1 +224.3 -7.3 -9.9 +73.4 +48.4

2.67

May 2.75

June 2.61

2.62

2.65

2.57

2.60

2.52

July 2.90

August 2.80

September 3.00

October 3.20

November 3.00

December 2.80

2.85

2.75

2.95

3.15

2.95

2.75

2.80

2.70

2.90

3.10

2.90

2.70

2.85

May 2.85

June 2.85

2.80

2.75

Table 6: Pangasius Export Price Situation Year 2009 February March Products January White meat 2.80 2.80 2.80 Light Pink 2.75 2.75 2.75 meat Pink meat 2.70 2.70 2.70

Products July White meat 2.80 Light Pink 2.75 meat Pink meat 2.70

April

August 2.65

September 2.70

October 2.39

2.6

2.65

2.34

2.55

2.60

2.29

Exporting Prices in US Dollars FOB Ho Chi Minh City Farm Prices: 17,862 VND = 1 USD

Source: Seafood from Viet Nam

13.1.2. Shrimps Table 7: Viet Nam Frozen Shrimp Export Markets in 2008 Frozen shrimp Year 2008 Volume Value, Tonnes Mio USD 58 533 498 914 46 629 467 279 32 727 234 231 8 404 64 415 4 649 34 157 4 348 33 014 12 187 84 997 7 654 70 615 7 205 72 225 10 132 65 684 6 050 48 920 2 682 21 604 3 463 26 997 1 673 12 077 2 029 19 855 4 944 35 990 191 553 1 625 707

Markets

Japan United States EU In which: Germany Belgium France Republic of Korea Australia Canada Taiwan Province of China China In which: Hong Kong ASEAN In which: Singapore Switzerland Other markets Total Source: Dzung/VASEP

Changes compared to 2007 in % Volume Value

+3.8 +15.3 +51.1 +63.5 +43.7 +49.3 +17.3 +22.1 +27.0 +31.6 +32.0 -10.5 -7.6 +12.0 -4.2 +112.0 +18.8

Figure 3: Shrimp export market shares by value, 2008 ASEAN, 1.66 Canada, Taiw an, 4.04 4.44 Sw iss, China, 1.22 3.01 Australia, 4.34

Other, 2.21

Japan, 30.69

S. Korea, 5.23

USA, 28.74

EU, 14.41

Source: Duong Report

+1.4 -3.0 +47.6 +59.4 +47.1 +45.0 +4.0 +17.0 +10.4 +21.3 +33.0 -13.1 -24.4 +1.4 -13.1 +86.1 +7.7

13.1.3. Fishing and Seafish Table 8: Viet Nam Fisheries Export Commodities in 2008 Year 2008

Commodities

Frozen shrimp Pangasius Tuna Other sea fishes Frozen cephalopods Dried seafood Other seafood Total Source: Dzung/VASEP

Volume Tonnes 191 553 640 829 52 818 131 656 86 704 32 676 100 107 1 236 344

Value, Mio USD 1 625 707 1 453 098 188 694 414 087 318 235 145 762 363 835 4 509 418

Changes compared to 2007, in % Volume Value

+18.8 +65.6 +0.0 +12.0 +5.5 -7.6 +12.7 +33.7

+7.7 +48.4 +25.0 +23.0 +12.7 -0.8 +1.7 +19.8

Table 9: Viet Nam Frozen and Fresh Tuna Export in 2008 Year 2008

Importing Country

EU In which: Italy The Netherlands Germany United States Japan Israel Mexico Taiwan Province of China China In which: Hong Kong ASEAN In which: Thailand Canada Other countries Total Source: Dzung/VASEP

Volume Tonnes 16 544 3 813 1 896 3 588 15 714 5 214 1 459 1 193 1 749 877 693 1 855 1 266 679 7 535 52 818

Value, Mio USD 62 790 15 260 10 951 9 900 54 784 23 397 6 462 5 331 4 711 3 165 2 060 2 923 1 985 2 498 22 632 188 694

Changes compared to 2007 in % Volume Value

-5.0 +26.3 +6.7 -24.9 -8.2 -5.0 +167.2 -22.2 -13.3 -24.8 -30.6 +22.1 +2.4 -8.1 +42.1 +0.0

+21.6 +41.8 +35.7 -1.4 +12.5 +33.6 +191.2 +3.4 +32.4 -5.2 +0.4 -2.4 -5.9 +19.3 +65.0 +25.0

Table 10: Viet Nam Marine Fish Products Export in 2008 (excluding Tuna) Year 2008

Markets

Japan EU In which: France Germany Belgium Republic of Korea United States ASEAN In which: Singapore Thailand China In which: Hong Kong Taiwan Province of China Russia Other countries Total Source: Dzung/VASEP

Volume Tonnes 26 735 27 787 8 851 3 175 2 660 22 614 9 060 15 612 3 782 4 909 8 105 633 7 025 1 075 13 643 131 656

Value, Mio USD 99 880 98 592 26 774 14 431 12 310 60 073 45 223 30 485 9 273 10 115 19 890 2 753 10 621 3 408 45 916 414 087

Changes compared to 2007 in % In volume In value

+18.1 +18.7 +118.6 +12.1 +5.1 -3.4 -1.7 +50.2 +36.1 +165.8 +7.2 -50.2 +27.5 -70.4 +16.0 +12.0

+26.4 +28.3 +114.5 +12.3 +0.0 +15.0 -1.5 +68.8 +87.2 +233.0 +33.1 -25.7 +24.9 -58.0 +38.6 +23.0

Table 11: Viet Nam Frozen Cephalopods Export in 2008 Importing Markets

EU In which: Italy Spain France Japan Republic of Korea Taiwan Province of China China In which: Hong Kong United States Australia ASEAN In which: Thailand Israel Other countries Total Source: Dzung/VASEP

Year 2008 Volume Value, Tonnes Mio USD 28 566 101 738 19 293 70 894 3 420 9 747 1 508 5 878 19 073 102 282 25 019 69 597 5 132 12 307 2 824 10 011 946 4 626 2 081 7 853 1 403 4 382 670 3 128 429 1 707 451 1 905 1 485 5 034 86 704 318 235

Changes compared to 2007 in % Volume Value

+17.6 +29.1 -15.8 +78.1 -1.2 -3.7 +23.1 -4.4 -10.0 +2.3 +0.2 +14.3 +35.1 +1.2 +42.8 +5.5

+26.6 +39.8 -11.3 +70.3 +2.3 +7.1 +28.1 -0.9 -13.3 +30.9 +13.8 +30.9 +55.5 +11.1 +51.7 +12.7

13.1.4. Export & Market Table 12: Viet Nam Fishery Product Export between 1990 â&#x20AC;&#x201C; 2008. Year Million USD Change in % from previous year

1990 205

1998 858.6

1999 971.1

2000 1478.6

2001 1777.5

2002 2014

2003 2199.6

2004 2400.8

2005 2738.7

2006 3358

2007 3792

2008 4562

113.1

152.3

120.2

113.3

109.2

109.1

114.1

122.6

112.9

120.3

Source: GSO/Duong Report

Figure 4:

VIET NAM SEAFOOD EXPORT GROWTH, 1997-2008 $US, Mil

5000

160

4500

140

4000

120

3500 3000

100

2500

2000

1500

1000

500 0

0 1990 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

$US Mil.

Compared to previous year, %

Source: Duong Report

Since 1995 to 2008 fisheries export has become the most prominent growth industry in Viet Nam, one of the highest export earners, increasing with an annual growth rate of 18 - 20% (Dzung)

Figure 5: Viet Nam seafood export value compared to growth rate 4,500

Export value Growth rate

3,762 3,348

2,023 1,777 1,478

2,739 2,401 2,240

60 50 40 30 20

971 780 817 550 670 456 368

10 0

19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08

5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0

Source Dzung/ VASEP

Table 13: Viet Nam Seafood Export Markets, 2008 Year 2008

Importing Markets

European Union In which: Germany Spain Italy Netherlands Belgium Japan United States Republic of Korea Russia ASEAN China In which: Hong Kong Ukraine Australia Others Total Source: Dzung/VASEP

Volume Tonnes 349 672 59 229 57 443 47 329 42 015 26 645 134 943 108 064 91 762 125 199 75 582 46 013 24 354 78 870 26 111 200 127 1 236 344

Value, Mio USD 1 144 462 207 586 157 224 156 226 140 956 108 274 828 350 744 623 300 748 217 761 195 012 157 139 79 387 156 320 135 505 629 499 4 509 418

Changes compared to 2007 in % Volume Value

+25.0 +45.3 +18.8 +18.7 +10.3 +30.7 +13.2 +8.3 -0.1 +118.9 +13.0 +0.5 -8.2 +202.6 +8.8 +74.9 +33.7

+26.0 +43.0 +16.9 +25.3 +8.5 +28.8 +11.0 +3.3 +10.0 +82.9 +9.4 +2.9 -8.9 +221.1 +12.0 +27.2 +19.8

Table 14: Viet Nam Fisheries Export Markets, January 2009 Markets

Japan United States EU In which: Germany Spain Belgium The Netherlands Italy Republic of Korea Australia China In which: Hong Kong ASEAN Canada Ukraine Other countries Total Source: Dzung/VASEP

January 2009

Volume Tonnes 6 025 5 287 19 380 4 338 3 884 1 620 1 862 1 946 5 974 1 465 2 921 1 610 5 107 977 2 908 10 740 60 783

Value Mio USD 40 082 31 322 56 530 14 102 9 341 5 940 5 533 5 483 17 298 5 972 12 152 5 749 12 209 5 103 4 788 26 707 212 162

Compared to January 2008 in % Volume In Value

-45.5 -20.7 -29.2 -24.2 -2.5 1.3 -46.1 -49.5 -35.9 -21.1 -24.8 -30.7 -12.6 -4.7 0.6 -44.3 -31.9

-29.6 -32.5 -33.1 -19.2 -4.3 -1.6 -48.0 -58.2 -30.2 -27.1 -0.2 -22.5 -16.2 -19.5 -11.5 -44.2 -30.9

Table 15: Fisheries Export Commodities in January 2009 January 2009

Commodities

Frozen shrimp Frozen Pangasius Tunas Other sea-fishes Frozen cephalopods Dried seafood Other seafood Total Source: Dzung/VASEP

Volume Tonnes 8 454 32 752 1 761 7 077 4 187 1 232 5 321 60 783

Value Mio USD 69 019 74 841 5 621 23 184 15 021 5 921 18 556 212 162

Compared to January 2008 in % Volume Value

-25.1 -22.5 -59.7 -39.9 -40.9 -51.9 -46.3 -31.9

-27.8 -22.7 -61.3 -32.0 -41.4 -43.9 -37.8 -30.9

14. PROCESSORS AND EXPORTERS (Selected Companies in Alphabetical Order) 14.1. Pangasius

AGIFISH AN GIANG FISHERIES IMPORT-EXPORT JOINT STOCK COMPANY 1234 Tran Hung Dao St, Long Xuyen City, An Giang Province, Viet Nam Phone: +84 76 38 11 485 Fax: +84 76 38 52 202 E-mail: agifishagg@hcm.vnn.vn agifish-co@hcm.vnn.vn Mr. Ngo Phuoc Hau General Director EU Code: DL 07, DL 08

BIANFISHCO BINH AN SEAFOOD JOINT STOCK COMPANY Lot 2.17 Tra Noc Industrial Park II, Can Tho City, Viet Nam Phone: +84 71 06 25 40 38 Fax: +84 71 06 25 14 02 E-mail: bianfishco@vnn.vn madamedieuhien@bianfishco.com Mrs. Pham Thi Dieu Hien General Director EU Code: DL 68, DL 462

CAI DOI VAM SEAFOOD IMPORT-EXPORT COMPANY Cai Doi Vam, Ca Mau City, Viet Nam Phone: + 84 780 388 90 54 Fax: +84.780 388 90 67 E-mail: cadovimex@hcm.vnn.vn Mrs. Pham Thi Huong General Director EU Code: DL 72 , DL 180

HUNG VUONG JOINT STOCK CORPORATION Lot No. 44 My Tho Industrial Zone, Tien Giang Province, Viet Nam. Phone: +84 73 385 42 45 Fax: +84-73 385 42 48 E-mail: info@hungvuongpanga.com Mr. Duong Ngoc Minh General Director EU Code: DL 308 , DL 386 , DL 27 , DL 21 , DL 36,DL 460, DL 60

HUNG CA COMPANY LTD. National Road 30, Binh Thanh Industrial Zone, Thanh Binh District, Dong Thap Province, Viet Nam. Phone: +84 67 354 13 59 Fax: +84 67 354 13 45 E-mail: info@hungca.vn Mr. Tran Hung General Director EU Code: DL 126

HIEP THANH SEAFOOD JOINT STOCK COMPANY National Highway 91,Thoi An Hamlet, Thoi Thuan Commune,Thot Not District, Can Tho City, Viet Nam Phone: +84 71 854 888 Fax: +84 71 855 889 E-mail: info@hiepthanhgroup.com Mr. Nguyen Van Phan General Director EU Code: DL 69, DL 432

NAM VIET JOINT STOCK COMPANY 19 D Tran Hung Dao, My Quy Ward, Long Xuyen City, An Giang Province Viet Nam Phone: +84 76 383 40 60 Fax: +84-76 383 40 54 E-mail: namvietagg@hcm.vnn.vn Mr. Doan Toi General Director EU Code: DL 152, DL 384

QVD FOOD COMPANY LTD Lot C, Sa Dec, Dong Thap Province, Viet Nam Phone: + 84 67 763 113 Fax: + 84 84 128 666 E-mail: sales@QVDSeafood.com Mr.Bui Duc Quy General Director EU Code: DL 376

VIET AN JOINT STOCK COMPANY National Road 91, Thanh An Hamlet, My Thoi Ward , Long Xuyen City, An Giang Province, Viet Nam. Phone: + 84 76 932 545 Fax : + 84 76 932 554 E-mail : anvifish@vnn.vn Mr. Luu Bach Thao General Director EU Code: DL 359, DL 75

VINH HOAN CORPORATION National Road 30, Ward 11, Cao Lanh City, Dong Thap Province, Viet Nam Phone: + 84 67 389 11 66 Fax: +84 67 389 10 62 E-mail: vh@vinhhoan.com.vn General Director: Mrs. Le Khanh EU Code: DL 61, DL 147

14.2. Shrimps

CAFATEX CORPORATION Km 2081, National Road No. 1, Chau Thanh District, Can Tho City, Can Tho Province, Viet Nam Phone: +84 71 384 61 34 Fax: +84 71 384 77 75 E-mail: mkcafatex@hcm.vnn.vn Mr. Nguyen Van Kich General Director EU Code: DL 65, DL 365 Products: Breaded, Tempura, Fritters, Marinated Shrimp, Pangasius & Scallop, Octopus, Cuttlefish..

CAMAU FROZEN SEAFOOD PROCESSING IMPORT - EXPORT CORPORATION 333 Cao Thang Street, Ward 8, Ca Mau City, Ca Mau Province, Viet Nam Phone : +84 780 383 16 00 Fax : +84 780 832 297 E-mail: camimex@hcm.vnn.vn Ms. Nguyen Thi Tuyet General Director EU Code: DL 25, DL 178, DL 351 Products: Block Frozen Shrimps, IQF Shrimps, Nobashi Shrimps, Steamed, Cooked or Blanched IQF Shrimps, Sushi Ebi, Ebi Fry shrimps.

KIM ANH COMPANY LTD. 49 National Highway 1, Ward 2, Soc Trang Township, Soc Trang Province, Viet Nam Phone. + 84 79 820 382 Fax. +84 79 822 762 E-mail: info@kimanhco.com Mr. Do Ngoc Quy General Director EU Code: DL 117 Products: Full Range Shrimp Products, Pangasius

MINH PHU SEAFOOD EXPORT IMPORT CORPORATION Ward 8 Industrial Zone, Ca Mau City, Viet Nam Phone: +84 780 838 262 Fax: +84 780 833 119 Email: minhphu@minhphu.com minhphu@hcm.vnn.vn Mr. Le Van Quang General Director EU Code: DL 145 Products: Full Range Shrimp Products

SEAPRIMEXCO VIET NAM 8 Cao Thang Street, Ward 8, Ca Mau City, Ca Mau Province Phone: +84 780 831 230 Fax: +84 780 831 861 E-mail: sales@seaprimexco.com Mr. Bui Nguyen Khanh General Director EU Code: DL 118, DL 196, DL 231 Products: Black Tiger, White, Pink shrimp , Mollusk and Fish.

UTXI AQUATIC PRODUCTS PROCESSING CORPORATION Provincial Road No.8, Tai Van Village, My Xuyen District, Soc Trang Province, Viet Nam. Phone: +84 793 852 950 Fax: +84 793 852 952 E-mail: utxi@hcm.vnn.vn Mr. Tieu Cam Chau General Director EU Code: DL 23 Products: Shrimps and Value Added

QUOC VIET PROCESSING TRADING & IMPORT EXPORT COMPANY LTD 444 Ly Thuong Kiet Street, Ward 6, Ca Mau City, Ca Mau Province, Viet Nam Phone: +84 780 383 64 54 Fax: +84 780 383 20 21 E-mail: quocviet@quocvietseafood.com.vn Mr. Ngo Van Nga General Director EU Code: DL 200 Products: Black Tiger- and Vannamei Shrimps

14.3. Sea Catches CAM RANH SEAFOOD PROCESSING ENTERPRISE 1A Nation Road, Cam Thinh Dong, Cam Ranh , Khanh Hoa Province, Viet Nam. Phone: + 84 58 386 51 41 Fax: + 84 58 386 5143 E-mail: info@camranhseafoods.com.vn Mr. Vo Ngoc Hiep General Director EU Code: DL207, HK212 Products: Vannamei prawn, Black tiger prawn, Squid, Loligo, Barramundi fillet

HAI NAM COMPANY LTD. 55 Pham Ngoc Thach Street, Ward 6, District 3, Ho Chi Minh City, Viet Nam Phone: + 84 8 38 222 730 Fax: +84 8 38 294 440 E-mail: hainam@hainam.vn Mrs. Nguyen Thu Sac General Director EU Code: DL 125, DL 356, HK 238 Products: All kinds of Sea fish, frozen and dried

HAI VUONG COMPANY LTD. (HAVUCO) Lot B, No. 1 Street, Suoi Dau Industrial Zone, Dien Khanh District , Khanh Hoa Province, Viet Nam Phone: +84 58 374 33 33 Fax: +84 58 374 33 36 E-mail: nam@haivuong.com Mr. Nguyen Xuan Nam Director & CEO EU Code: DL 318 Products: All kinds of Sea fish

KISIMEX JOINT STOCK COMPANY 39 Dinh Tien Hoang, Rach Gia City, Kien Giang Province, Viet Nam. Phone: +84 77 386 21 04 Fax: +84 77 386 26 77 E-mail: kisimex@hcm.vnn.vn Mr. Nguyen Viet Cuong General Director EU Code: DL 110, DL 120, DL144, DL 166, HK320 Products: All kinds of Sea fish

NHA TRANG FISHERIES JOINT STOCK COMPANY 194 Le Hong Phong Street, Nha Trang City, Khanh Hoa Province Phone: + 84 58 388 51 48 Fax: +84 58 388 41 58 E-mail: fisco@hcm.vnn.vn Mr. Tran Quoc Nam General Director EU Code: DL 115 Products: All kinds of Sea fish

NHA TRANG PEARLS LTD. 17B Yersin Street, Nha Trang City, Khanh Hoa Province, Viet Nam Phone: +84 58 381 75 71 Fax: +84 58 382 42 52 Website: www.cobia.com.vn Products: Cobia

NHA TRANG SEAFOODS 58B April 2nd Street, Vinh Hai Ward, Nha Trang City, Khanh Hoa Province, Viet Nam Phone: +84 58 383 10 40 Fax: +84 58 383 10 34 E-mail: ntsf@dng.vnn.vn Mr. Ngo Van Ich General Director EU Code: DL 17, Dl 90, DL 394 Products: Tuna, Mahi Mahi, Marlin, Swordfish, Crab, Octopus, Shrimps, Pangasius

SEASPIMEX 213 Hoa Binh Street, Hoa Thanh Ward, Tan Phu District, Ho Chi Minh City, Viet Nam Phone: +84 8 860 60 85 Fax: + 84 8 386 52 279 Mr. Vo Phuoc Hoa General Director E-mail: seaspimex@hcm.vnn.vn EU Code: DL 02, HK 148 Products: Crabmeat Canned and all kinds of Sea fish

SOTICO-SONG TIEN TRADING COMPANY LIMITED Tan Thuan Hamlet, Binh Duc Village , Chau Thanh District, Tien Giang Province , Viet Nam Phone: + 84 73 853 362 Fax: + 84 73 853 244 E-mail: sotifa@hcm.fpt.vn EU Code: DL 127 Mrs. Nguyen Thi Anh General Director Products: Baby clam : meat, whole, half shell- skewered. Shrimps : Scampi (freshwater shrimp), Cat Tiger, Pink, Black Tiger, White, frozen in block, IQF, skewered and tray. Cooked or raw.Cuttlefish, Squid : Whole tubes, rings in IQF and block frozen Baby octopus : IQF and block frozen. Seafood cocktail Fish: Pangasius

HUY NAM SEAFOODS COMPANY LTD Tac Cau Industrial Park , Chau Thanh District, Kien Giang Province , Viet Nam Phone: +84 77 361 61 28 Fax +84 77 361 61 29 E-mail: huynam@pmail.vnn.vn Mr. Le Tri Dung General Director EU Code : DL 344 Products: Octopus, Cephalopods, Shrimp and Prawn, Fish

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14.4. Value added products AGREXCO SAIGON EXPORT FOODSTUFFS AND AGRICULTURAL PRODUCTS JOINT STOCK COMPANY No. 10, Ben Nghe Street, Tan Thuan Dong Ward, District 7, Ho Chi Minh City, Viet Nam Phone : +84 8 377 201 88 Fax: +84 8 387 251 94 E-mail: tt-agr@hcm.fpt.vn Mrs. Le Thi My Linh General Director EU Code: DL 111 Products: Hakau, Spring roll, Breaded shrimp, Potato shrimp

CAUTRE EXPORT & PROCESSING JOINT STOCK COMPANY 125/208 Luong The Vinh Street, Tan Thoi Hoa Ward, Tan Phu District, Ho Chi Minh City, Viet Nam Phone: + 84 8 396 120 86 Fax : + 84 8 396 120 56 E-mail : telexcte@hcm.vnn.vn Mrs. Tran Thi Hoa Binh General Director EU Code: DL 103 Products: Vegetarian Wonton, Vegetarian Dumplings, Shrimp ball.

CHOLIMEX FOOD JSC No. 7 Road, Vinh Loc Industrial Zone, Ho Chi Minh City, Viet Nam Ho Chi Minh City, Viet Nam Phone: +84 8 765 33 15 Fax: +84 8 765 30 25 E-mail: cholimexfood@hcm.vnn.vn Mrs. Nguyen Thi Thoa General Director EU Code: DL 62 Products: Breaded Fish, Banana Shaped Breaded Shrimp, Breaded Butterfly Shrimp, White Panko Breaded Shrimp

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HUNG THANH PHU QUOC FISH SAUCE 5th Quarter, Duong Dong, Phu Quoc, Kien Giang , Viet Nam Phone: +84 77 384 61 24 Fax: +84 77 847 946 E-mail: hungthanhfishsauce@vnn.vn Mr. Dang Van Thoi General Director EU Code: DL 138 Products: “Nuoc Mam” Fish Sauce

VAN DUC FOOD EXPORT JOINT STOCK COMPANY Vinh Loc Industrial Park St. 2F, Lot C27/II, Binh Chanh District, Ho Chi Minh City, Viet Nam Phone: +84 8 425 30 90 Fax: +84 8 765 29 54 Mr. Le Viet Tien General Director EU Code: DL 355, DL 390 E-mail: vanduc@vanduc.com.vn Products: All kind of value added Seafood

VIET HAI FISH-ONE Co., LTD Km 2087+500 Quoc Lo 1A, Xa Long Thanh, Huyen Phung Hiep, Tinh Hau Giang Phone: +84 71 848 222 Fax: +84 71 848 999 E-mail: fishone@hcm.vnn.vn Website: www.fishone.com.vn EU Code: DL 186 Products: Value Added Seafood mainly from Shrimp

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VILFOOD COMPANY LTD Lot C38/I, Road No.7, Vinh Loc Industrial Zone, Binh Chanh District, Ho Chi Minh City, Viet Nam Phone: + 84-8 765 30 59 Fax: +84 8 765 30 60 E-mail: vilfood@vilfood.com Mrs. Nguyen Thi Thu Sac General Director EU Code: DL 176 Products: Potato PTO shrimp, Chimaki, Shrimp paste on sugar cane, Crab Farci, Shrimp shiitake, Stuffed Snail, Shrimp Hasamiage, Cabbage Roll, Shrimp Roll, Spring Roll & Net Spring Roll , Hakao, Shaomai, Wonton.

14.5. Contacts & Services Official Ministry of Agriculture and Rural Development (MARD) The Vice Minister of Fisheries 2 Ngoc Ha Street , Ba Dinh , Hanoi, Viet Nam Phone: +84 4 823 58 04 Fax: +84 4 823 03 81 E-mail: icard@agroviet.gov.vn Website: www.agroviet.gov.vn

VASEP Viet Nam Association of Seafood Exporters and Producers 10 Nguyen Cong Hoan, Ba Dinh, Hanoi , Viet Nam Phone: +84 4 377 15 055 Fax: + 84 4 377 15 084 E-mail: vasep@hn.vnn.vn Website: www.vasep.com.vn

VASEP MEDIA

Service & Consultant Brach of VASEP 218, Road No.6, Lot A, An Phu An Khanh New Urban Area, District 2, HCMC, Viet Nam . Phone: +84 8 628 10 442 Fax: +84 8 628 10 450 E-mail: vietfish@hcm.vnn.vn

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VIETFISH EXHIBITION Saigon Exhibition & Convention Center (SECC) 799 Nguyen Van Linh Parkway , District 7, Ho Chi Minh City , Viet Nam . Phone: +84 8 541 35 999 Fax: +84 8 541 35 666 Website: www.vietfish.com.vn

NAFIQAD Public Veterinary Body of Viet Nam 10 Nguyen Cong Hoan, Ba Dinh, Hanoi , Viet Nam Phone: +84 4 445 918 00 Fax: +84 4 383 172 21 E-mail: nafiqad@mard.gov.vn Website: www.nafiqa.gov.vn

VCCI Viet Nam Chamber of Commerce VCCI Building , 9 Dao Duy Anh Street , Hanoi , Viet Nam Phone: +84 4 574 20 22 Fax: +84 4 574 20 20 E-mail: webmaster@vcci.com.vn Website: www.vcci.com.vn

Science University of Can Tho Campus II, 3/2 Street, Xuan Khanh, Ninh Kieu, Can Tho City , Viet Nam Phone: +84 710 38 38 262 Fax: +84 710 38 38 474 E-mail: tpphu@ctu.edu.vn Website: www.ctu.edu.vn

Seafood University of Nha Trang 2 Nguyen Dinh Chieu Street Nha Trang City, Viet Nam Phone: +84 58 38 31 149 Fax: +84 58 38 31 147 Email: dhtsnt@vnn.vn Website: www.ntu.edu.vn

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Laboratory Services Intertek Viet Nam Ltd. Can Tho Branch M10-M13 KDT Nam Song Can Tho, Thanh Thuan, Phu Thu Ward, Cai Rang District, Can Tho City, Viet Nam Phone: +84 710 3917 886 direct line +84 710-3917 887 office (ext.123) Fax: +84 710-3917 711 E-mail: banghi.hoang@intertek.com http://www.intertek.com

SGS Viet Nam Ltd. 141 Ly Chinh Thang Street, District 3, Ho Chi Minh City , Viet Nam Phone: +84 8 39351920- 39351920 (Ext 127) Fax: +84 8 39351923 Website: www.vn. sgs.com Phuong.Duong@sgs.com

Quality Assurance Seafood Connection NL Branch Office Viet Nam Room 4A, 4th floor, Harvest Center , 12 Le Thanh Ton, District 1, Ho Chi Minh City , Viet Nam Phone: +84 8 38 23 36 40 Fax: +84 8 38 25 07 19 E-mail: honglan@seacon.vn Website: www.seacon.vn

Safe Seafood Company (SSC) 6B Dao Duy Tu Street , Van Thanh Ward , Nha Trang City , Khanh Hoa Province , Viet Nam Phone: +84 58 381 99 09 Fax: +8458 381 99 08 E-mail: ssc@safeseafood.vn

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Logistics Hoang Ha International Logistics JSC Tan Binh Industrial Zone, l0 III 22, Road 19/5A, CN III, Ho Chi Minh City , Viet Nam Phone : + 84 8 3815 5319 (16 lines) Fax : + 84 8 3815 5320 Mr. Tran Hieu Nghia General Director Email : info@hoangha.com

Consultant & Information Herby Neubacher Journalist & Seafood Consultant 26Hai Ba Trung Street , Van Thanh Ward, Nha Trang City , Viet Nam Cell phone +84 918 672 286 E-mail: herbyneubacher@yahoo.com

News Agencies Viet Nam News Agency VNA 11 Tran Hung Dao Street , Hanoi , Viet Nam Editor in Chief: Tran Mai Huong Phone: +84 4 933 23 16 Fax: +84 4 933 23 11 E-mail: vnnews@vnagency.com.vn Website: www.Viet Namnews.com.vn

Thanh Nien News Forum of the Youth Federation of Viet Nam 248 Cong Quynh Street, Distr. 1, Ho Chi Minh City , Viet Nam . Phone: +84 8 8 394 046 Fax: +84 8 8 322 025 Editor in Chief: Mr. Nguyen Quang Thong E-mail: editor@thanhniennews.com Website: thanhniennews.com

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SOURCES

My Gratitude and Special Thanks For the Help compiling this Report goes to:

The Ministry of Agriculture and Rural Development (MARD) The R.Hon. Vice Minster of Fisheries

Dr. Luong Le Phuong Ministry of Agriculture and Rural Development 2 Ngoc Ha Street, Ba Dinh, Hanoi, Viet Nam

Dr. Chau Viet To, MPA Deputy General Director International Cooperation Department Ministry of Agriculture and Rural Development 2 Ngoc Ha Street, Ba Dinh, Hanoi, Viet Nam Phone: + 84 4 44 59 21 34 Fax: +84 4 37 33 07 52 E-mail: tovietchau@yahoo.com

Seafood Connection NL Branch Office Viet Nam Mrs.Pham Thi Hong Lan Managing Director Room 4A, 4th floor, Harvest Center , 12 Le Thanh Ton, District 1, Ho Chi Minh City , Viet Nam Phone: +84 8 382 336 40 Fax: +84 8 382 507 19 E-mail: honglan@seacon.vn Website: www.seacon.vn

I.G.E.L. News Ms. Pham Thi Minh Hang (Internet Research and Documentation) E-mail: igelnews@yahoo.com

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Background Information was taken from:

“Report of Background Information on Viet Nam Fisheries and the Challenges in Development and WTO Integration Process” (Written and presented in 2008)

By Dr.Thai Thang Duong National Information Consultant

“Enhance Positive Impacts of WTO Accession on the Fisheries, Economy and Seafood Trade of Viet Nam” By Prof.Dr.Nguyen Huu Dzung Standing Vice-Chairman of the Viet Nam Association of Seafood Exporters and Producers VASEP (Report made for the FAO Project TCP/VIE/3102 D Capacity Building to enhance positive impacts of WTO Accession on the Fisheries Sector and alleviate Coastal poverty, 2008)

“Viet Nam Fisheries and Aquaculture Sector Study” Ministry of Fisheries of Viet Nam World Bank (Presented 16th February 2005)

Viet Nam News Agency (VNA) E-mail: Viet Namnews.vnagency.com.vn

Thanh Nien News Forum of the Youth Federation of Viet Nam\ E-mail: editor@thanhniennews.com Website: thanhniennews.com

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MAPS OF VIET NAM

The Mekong Delta

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SEAFISHES OF VIET NAM (Selection)

List of Sea Fishes of Viet Nam by Catching Season

II.

List of Sea Fishes of Viet Nam with Pictures and English -, Scientific- and Vietnamese Names

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List of Acronyms

AAF ASEAN Aquaculture Federation AFA An Giang Fish Farmers Association APPU Agifish Pure Pangasius Union ASEAN Association of Southeast Asian Nations BRC British Retailers Consortium CEO Chief Executive Officer CIF Cost, insurance, freight COD Chemical oxygen demand DANIDA Danish International Development Agency DARD Department of Agriculture and Rural Development DECAFIREP Department of Capture Fisheries and Fisheries Resources Protection FAO Food and Agriculture Organization of the United Nations FOB Free on board GAP Good Agriculture Practice or Good Aquaculture Practice GDP Gross domestic product GMO Genetically Modified Organism GTZ German Agency for Technical Cooperation HACCP Hazard Analysis and Critical Control Point (System) INFOFISH Intergovernmental Organization for Marketing Information and Technology Advisory Services for Fishery Products in the Asia and Pacific Region IQF Individual quick frozen ISO International Organization for Standardization IUU Illegal, unreported and unregulated MARD Ministry of Agriculture and Rural Development MOFI Ministry of Fisheries MOU Memorandum of Understanding MSC Marine Stewardship Council Nafiqad National Fisheries Quality Assurance Directorate (formerly Nafiqaved) NAVICO Nam Viet Corporation NFI National Fisheries Institute (USA) NGO Non-governmental Organization SIAS Seafood Industries Association Singapore SIPPO Swiss Import Promotion Programme TAC Total allowable catch USFDA US Food and Drug Administration USP Unique Selling Point VASEP Viet Nam Association of Seafood Exporters and Producers VCCI Viet Nam Chamber of Commerce and Industry VNA Viet Nam News Agency WCPFC Western and Central Pacific Fisheries Commission WTO World Trade Organization WWF World Wildlife Fund

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GLOBEFISH MARKET RESEARCH PROGRAMME Vol 78 Seafood Price Indices (44P.)........................................................................................APR 2005 Vol 79 World Market of Tilapia (28P.)...................................................................................APR 2005 Vol 80 Fishery Industry in Russia (70P.) ................................................................................ JUN 2005 Vol 81 Trends in European Groundfish Markets (153P.)...................................................... NOV 2005 Vol 82 Freshwater species on the European Market (119P.)...............................................DEC 2005 Vol 83 Fish Supply and Demand in the Near East Region (67P.).......................................... JAN 2006 Vol 84 The market for Nile Perch (94P.) ................................................................................APR 2006 Vol 85 Supermarkets and the Artisinal Fisheries Sector in Latin America (79P.).................APR 2006 Vol 86 Markets and Marketing of Aquaculture Finfish in Europe (50P.) ........................... AUG 2006 Vol 87 Lobster Markets (92P.) ..............................................................................................OCT 2006 Vol 88 Republic of Korea - Fishery Industry Profile (72P.) .................................................. NOV 2006 Vol 89 World Surimi Market (125P.) ................................................................................... NOV 2006 Vol 90 Market Penetration of Developing Country Seafood Products (57P.)......................APR 2008 Vol 91 Ecolabels and Marine Capture Fisheries: (52P.) .....................................................APR 2008 Vol 92 The seafood market in Italy (59P.) ..............................................................................APR 2008 Vol 93 Global Production and Marketing of Canned Tuna (44P.).........................................APR 2008 Vol 94 World Octopus Markets (65P.) ..................................................................................JUL 2008 Vol 95 The seafood market in Southern EU: Cyprus, Malta and Slovenia (46P.) ...............JUL 2008 Vol 96 The seafood market in Spain (59P.)............................................................................ NOV 2008 Vol 97 Private standards in fisheries and aquaculture:(64P.) ............................................APR 2009 Vol 98 The seafood market in Greece (33P.) .........................................................................MAR 2010 Vol 99 Vietnam seafood from waterland (111P)....................................................................MAR 2010 Vol 100 Importance of APEC in world fisheries and aquaculture (34P.) ..............................MAR 2010

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