MarketOpportunities

forNorwegiantechonologyprovidersandprocessors
inthepangasiusbyproductsinVietnam

Jan2014

ThisdocumenthasbeenissuedbyInnovationNorway

Office:
Hanoi
Address:
8thFloor,HanoiTower,49HaiBaTrung
Hanoi,Vietnam
Contactperson:DangPhuongLien,MarketAdvisor

Tel:

+84439742930
Fax:

+84439743303

ExecutiveSummary

VietnamistheWorldsNumber1countryinproducingandexportingpangasius.Thecatfish
isthekeyfishspeciesinVietnameseaquaculturewithannualproductionofaround1.3mil
tons (2012). They are mainly processed and exported in the form of frozen fillets which
accountforonly30%35%ofthewholefish.Thisresultsinahugevolumeofpangasiusrest
raw materials called byproducts, estimated at 800900 thousand tons per year. Many
studiesrevealthatcatfishbyproductscontainrelativelylargeconcentrationsofproteinand
oil, which are considered to have a high nutritive value for livestock. The most common
productsderivedfromcatfishbyproductsarefishoilandfishmeal.Otherpossibleproducts
include collagen, gelatin, biodiesel and fertilizer. Key players are big integrated companies
whoinvolvesinfarming,processing,exportandbyproductproduction.
This report will present a brief summary of the pangasius farming and processing industry
followedbyanoverviewofthecatfishbyproductbusiness.Itwillthenfocusonthemarket
analysis of the pangasius fish meal and fish oil segment in order to derive possible
opportunitiesforinvestmentandcooperation.
ThisreporthasbeenpreparedbyInnovationNorwayHanoiundertheKnowledgeTransfer
project.Nowarrantyorguarantee,whetherexpressorimplied,ismadewithrespecttothe
information reported or to the findings observations and conclusions expressed in this
report. Further, such information, findings, observations and conclusions are based solely
uponinformationinexistenceatthetimeofreportpreparation.

I.

VietnamFacts&Figures:

MainlandArea:

331.690km2

Coastline:

3,260km

Climate:

Tropical

Mineralresources:

Oil,naturalgas,coal,iron,zinc,bauxite,uran,etc.

Politicalregime:

Socialist Republic of Vietnam, communist party is

leadingparty.

Population:

89.7million(2012)

Populationgrowthrate:

1.0%(2011)

Laborforce:

51.4million(2011)

Birthrate:

16.83births/1,000population(2012)

Deathrate:

5.95/1,000population(2012)

Lifeexpectancy:

72.41years

Administrationdivision:

64provinces

Currency:

DONG(VND);1US$=21,246VND;1NOK=3,448VND)

GDP:

VNDTrillion2,535(2011);VNDTrillion2,950(2012);

GDPgrowthrate:

5.9%(2011),5.0%(2012)

Nationalspecialcities:

Hanoi(thecapital)andHochiminhcity

Source:www.adb.org;www.businessmonitor.com

II.

FisheriesandAquacultureIndustry:

Totalproduction(2012):

5,745milliontons

Catching:

2.633milliontons

Aquaculture:

3.112milliontons

Exportturnover(2012):

US$6.134billion(910%oftotalexportturnover)

Labourforce:

Morethan4mil

Fisheriescontributes

45%ofGDP

Pangasiusproduction&export

WorldsNo.1(Production:approx.1.26milMTper
yearandUS$1.7bilin2012exportrevenue)

Shrimpproduction&export

Worlds No. 3 (Production: 470,000 MT and

US$2.2bilin2012exportrevenue)

Source:VASEP2012

III.

PangasisusFarming&Processing

1. PangasiusFarming
The pangasius farming in Vietnam is mostly concentrated in 8 provinces in the Mekong
Delta,includingAnGiang,DongThap,CanTho,VinhLong,TienGiang,HauGiang,BenTre
andSocTrang.Thetotalareaforfarmingpangasisusinthecountryisestimatedat6,000ha.
Themostcommonformofpangasiuscultureispondfarmingthankstoitsrelativelyfaster
growthrate,betterfleshqualityandappearance.Pondtechniqueaccountsfor97%oftotal
production while the floating cage technique is only 3%. Catfish culture is carried out in 3
cropsevery2yearswithanaverageyieldof300500ton/ha/crop,dependingonthedepth
and size of the pond. A few farmers even report upto 600 ton/ha/crop in favorable years.
Averageyieldoftheindividualfarmrangesbetween450750tons/haperyear.
Pangasius farming establishments must be in compliance with Vietnamese requirements
relatedtofoodhygieneandsafetyandveterinaryhygieneconditions.Theyarealsosubject
to regular inspections and surveillance. Most farms apply international recognized
sustainable aquaculture techniques like GAP Good Aquaculture Practice or Aquaculture
StewardshipCouncilASCCertificate.
Thevariationincatfishqualityisclassifiedbycolouroftheflesh:whiteoryellow;thewhiter
thecolour,thebetterthequality.Thequalitydependsagreatdealonthefarmingcondition
suchasfeedandwaterquality.
Vietnamscatfishproductionhasbeendecreasinginrecentyearsduetothefallingpriceof
pangasiusfillet.Theoutputwasaround1,3miltonsin2012comparedtothepeakof1.5mil
tons in 2008. Production in 2013 is forecast to fall below 1 mil tons as many ponds have
been put idle when the price is still on the downward trend. The Vietnam Association of
Seafood Exporters and Producers VASEP is now discussing among its member to find
4

measures to control the production and improve the product values. Meanwhile the
government Master Plan on the development of fisheries strategies by 2020 and
orientationsto2030setatargetforpangagiusproductiontoachieve1.82.0miltonswith
theannualgrowthrateof4.8%.
2. PangasiusProcessing
There are about 70 pangasius processing factories in Vietnam. All factories comply with
nationalstandardsofhygieneincludingHACCP,GMP,SSOP.Manyofthemarequalifiedfor
exporting to the EU by meeting ISO, IFS, SQF (Safe & Quality Food), BRC, Halal, which are
certifiedby3rdpartyagencies.
Pangasiusisprimarilyprocessedforexportmarketsintheformoffrozenfillets.Keymarkets
forJanAug2013includeUSA(23%),EU(22%),ASEAN(7%),Brazil(6%).Europeanretailers
arekeentobuytheproductscertifiedbyAquacultureStewardshipCouncilASC.Currently
33 farming companies in Vietnam have obtained ASC, including Vinh Hoan Corporation,
HungVuongGroup,AgifishAnGiangFisheries,GoDangSeafood,ToChauJsc,HungCaJsc,
Anvifish,DocifishJSC,NTSFFulllistcanbeviewedattheAquacultureStewardshipCouncil
website:
http://www.ascaqua.org/index.cfm?act=tekst.item&iid=4&iids=204&lng=1.
Figure1:PangasiusfarmandPangasiusProcessingFactory

Source:PangasiusVietnamAssociation

Fishineverypondhasbeensampledandtestedoncontaminationofantibioticalresidues
by processors before harvest is allowed. Pangasius is harvested alive and transported by
tankshiptotheprocessingplants.Thefilletprocessingisalwayscompletedwithinthedayto
ensurethehighestqualityoftheproducts.
There has been a trend that processors integrate in all value chains from hatcheries,
aquaculture, processing and export. Top 10 pangasius processing and export companies
accountfor42%ofthecountrysexportvaluein2012whiletheTop20companiesaccount
for61%.Annex1presentsthelistoftop20processingandexportcompaniesin2012.

IV.

Pangasisusbyproducts

1. Overview
Pangasisusbyproductsincludehead,bone,skin,scrapmeat,finandviscera.Theseaccount
for 6065% of the total raw whole fish. The annual volume for pangasius processing is
reportedataround1.2miltons,resultingin700,000900,000tonsofrestrawmaterialsper
year.
Table1Compositionofmainparts

Parts
Fillet
Scrapmeat
Fat
Head,backbone&fins
Internalorgans
Skin
Total

Percentage
3035%
812%
810%
3237%
55.5%
88.5%
100%

Source:NhaTrangUniversity

MostofkeypangasiusprocessingfactoriesarelocatedintheMekongDelta,thustheaccess
to the rest raw materials is considered easy and convenient. The byproduct factories are
generally located next to the fillet processing plants or in the same industrial parks where
filletprocessingplantslocateinordertosecurethefreshinputs.

Recently,moreandmoreprocessingplantsstartinvestinginbyproductproductionwiththe
minimumdesignedcapacitytoconsumetheirownrawmaterials.Asthebusinessdevelops
well in the past years, several companies expand the production and purchase additional
rawmaterialsfromotherprocessorsinthelocality.Accordingtoourstudy,between1215
filletprocessingcompanieshavebyproductfactories.Theremainingprocessingcompanies
sell out rest raw materials to local market, typically in bulk to the third collector without
separatingdifferentparts.
Themostcommonproductsderivedfromthecatfishbyproductsarefishoilandfishmeal.
Some factories also produce collagen, biodiesel, fertilizer Below are the summary of the
possibleproductsmadefrompangasiusrestrawmaterials.
Fish meal: Pangasius byproducts except for viscera are generally used to make
fishmeal: both dried meal (90%) and wet meal. Several factories separate
shreddedmeatfromtherestmaterialsforotherpurposes.Itisreportedthatfish
mealproducedfromscrapmeatcontainshigherproteincontentthanonlyfrom
headandbone.Catfishbyproductmealismainlysoldtoanimalfeedproducers
suchasforpigsorducksandisconsideredahighnutritionvalueforlivestock.
Fish oil: Fish oil is produced in two types: purified and unpurified. According to
ourstudy,allfactories,exceptforHonoroadChongQingLtdChinaandTrisedco
Vietnam,canonlymakeunpurifiedoil.Theunpurifiedoilisthenusedtoreplace
palm oil in producing animal feed. Meanwhile the purified oil can be used for
cooking,mainlyintheprocessedfoodindustry.
Collagenandgelatinaremadefromcatfishskin.Itcanbeintheformofpowder
or drinks. Collagen obtains 4 proteins of molecular weight 217kDa, 185kDa,
156kDa and 104kDa (Nha Trang University report 2013). Collagen powder is
mainly used in the food and cosmetic industries. Vinh Hoan Corporation is the
pioneerinthisfieldandinajointventurewithaMalaysianpartner.Currently,it
is in the test production and commercial production is scheduled in 2015.
Meanwhile,CollagendrinkisproducedbyBinhAnSeafood.Thisisconsideredas
ahealthydrinkandisalsoexportedtoHongkong(VASEP).

Fish ball/ fish paste: several companies make fish paste or fish ball from scrap
meatforhumanuse,whicharesoldtothelocalmarket.
Biodiesel: is derived from pangasius fat. According to a study, Biodiesel made
frompangasiushastheproductioncost20%lowerthanthatfordiesel.Itisalso
consideredasgreenenergyastheCOdiffusionisjustonethirdofthelevelfrom
diesel. The only project for biodiesel was carried out by Hiep Thanh Seafood
Company and a Finish partner, which was partly funded by the EU ENERFISH
project. Its design was to provide biodiesel not only to the companys internal
cooling systems but also for local industry use. However the project has been
suspendedforoneyearnowwhentheFinishpartnerencountereddifficulties.
Fishsauce:PangasiusbyproductsarealsosoldtothirdcompaniessuchasMasan
Grouptoproducefishsauceforbothlocalconsumptionandforexport.
Fertilizer: it is said that fertilizer made from catfish is rich in protein, fat and
minerals.Thevolumeisstilllowandonlyforlocalmarket.
Dried swim bladders: Swim bladders are normally cleaned and dried by small
family businesses. One report from VASEP said the volume is estimated at 56
tonsperdayandonlyforexport.
Others: a few fish processing plants also process pangasius fin, belly, stomach
andselltorestaurantsorsupermarketsforlocalconsumption.
It is observed that none of the factories treat the diluted blood after processing, which is
thendischargedaswastewater.Someresearcherssaythedilutedbloodcontainrelatively
highconcentrateprotein(55%58%).
2. Marketanalysisforfishmealandfishoil
Thefollowingsectionwillfocusonthesupplyanddemandanalysisforfishmealandfishoil
as90%oftherestrawmaterialsisusedtomakethosetwoproducts.
2.1Supplyoffishmealandfishoil
The rest raw materials are received from the fillet processing factories and transferred by
truck to the byproduct processing factories within the day. Therefore the materials are
8

fresh when they are put into processing line. According to local fish meal and fish oil
producers, with the inputs of 1 tons of pangasius byproducts, they can extract
approximately250kgoil(25%)and200kgoffishmeal(20%).Manyfactoriessaythewater
releasedduringtheprocessstillcontainsvaluablenutritionelementsbuttheydonthavethe
solution for extracting them yet. Therefore most of them just simply discharge as waste
water while a few others attempt to sell it to fish sauce producers in the locality. The
productionprocesscanbeelaboratedinFigure1.
Figure2ProductionProcessforPangasiusFishMealandFishOil

Rest raw materials

(head, bone, skins, scrap meat)

Grinding

Cooking/ Pre-heating

Pressing

Solids

Liquid

Centrifugal

Oil recovery

Evaporating

Drying

Milling

Fish oil

Fish meal

It is said that current technologies produce rough fish meal without valueaddedtechnical
treatment.Basedonourinterviewswithseveralfactories,thetechnologyandequipmentin
catfish meal production mainly come from China. A few companies are using the Thai or
German technologies. The technologies from Thailand and Germany are said to produce
better quality of meal and consume less power than the Chinese technology. Still local
producers seem to prefer the Chinese equipment due to its lower investment costs. Price
hasbeenaverysensitiveissueinthecurrentcontextofindustrydownturnandisforecastto
remain critical in the medium run. According to one company in Can Tho province, the
German equipment cost around USD 2 mil compared to USD 300,000 for a Chinese one.
ThusthecompanychosetheChinesetechnologyeventhoughtheyknowthatthequalityof
fishmealisnotasgoodastheonemadebyGermantechnology.
Figure3ProductionlineofPangasiusFishmealandFishoil

Inaddition,thequalityoffishmealandfishoildependsalotonthetypesofinputs(withor
withoutscrapmeat)andthequalityorfreshnessofthebyproducts.Amongthefreshwater
fish,pangasiusissaidtocontainthehighestconcentrationprotein.Thebyproductswhich
include scrap meat can make fishmeal with 6062% protein while without scrap meat, the
protein content is on average 5055%. This is said to be lower than fishmeal made from
wholemarinefish(approx.70%protein)buthigherthanthefishmealmadefrommarinefish
10

headandboneonly(approx.50%protein).Thecompositionanalysesofpangasiusfishmeal
and fish oil vary largely depending on types of raw materials and the different technology
andequipmentusedbyeachfactory.Thefollowingtablesareconsolidatedfromanumber
ofcompanieswevisited.
Table2Compositionanalysisoffishmealandfishoil

Pangasiusfishmeal
parameter
specification
protein
5562%
fat
1213%max
moisture
10%max
sand&salt
5%max
ash
2325%max
tvbn
100150ppmmin
color
Lightbrown/brown
odour
specific

Pangasiusfishoil
parameter
specification
iodinevalue
6080%
impurities
0.11%max
moisture
0.21%max
acidvalue
35%max
peroxide
310%max
meltingpoint
2437Cdegree
color
lightyellow/orange
odour
specific

Figure4Fishmealandfishoilmadefrompangasiusbyproducts

Keyplayersfromthesupplysidearebigintegratedcompanieswhoinvolveinfarming,fillet
processing, byproduct processing and export. 11 enterprises among the Top 20 Pangasius
ProcessingandExportcompaniesengageinbyproductbusiness.Mostofthemarelocated
in Can tho, An Giang and Dong Thap provinces. Their byproduct production consumes
approx. 600,000 tons of the rest raw materials per year or almost two thirds of the total
amount.Table3presentsthelistofkeypangasiusbyproductproducers,inwhichwecan
11

Table3ListofKeyPangasiusfishmealandfishoilProducers
No

Companies

website

farm

processing
plant

Byproduct
MT/year

Markets

Remarks

VinhHoan
Corp

http://vinhhoan.com.vn/

yes

yes

87100

Domestic,EU,
China

HungVuong
Corp

http://www.hungvuongpa
nga.com/en

yes

yes

73700

Domestic,
China

AnvifishCo

http://www.anvifish.com/

yes

yes

50585

Domestic,
China

Navico

http://www.navicorp.com.
vn/

yes

yes

26800

Domestic,
China,India

http://www.idiseafood.co
m/

yes

yes

110000

Domestic,
China

I.D.ICorp

HungCaCo.,
Ltd

http://www.hungca.com/

yes

yes

64500

Domestic,
China

Dathaco

http://www.daithanhseafo
ods.com/

yes

yes

26800

Domestic,
China

http://cadovimex2.com.vn
/en/

yes

yes

26800

Domestic,
China,Korea

http://www.hiepthanhgro
up.com

yes

yes

55500

Currently
putonhold

http://www.godaco
seafood.com.vn/?lang=2

yes

yes

60000

Domestic,
SouthKorea,
Singapore,
China
Domestic,
China

Cadovimex

HTFood

10

11

12
13

14

Godaco

HoangLong
SeafoodCo.,
Ltd
Tafishco

http://www.hoanglongseaf
ood.com/

yes

yes

12060

http://tafishco.com.vn/

yes

yes

100,000

China,ASEAN

QuangMinh
Seafood

http://quangminhseafood.
com.vn/

yes

yes

25,000

China,Taiwan,
ASEAN

HungTriExim http://www.trihung.com.v
n/
Jsc

no

no

120,000

Domestic,
China

12

seecompaniesfromrow1to11arein2012Top20processingandexportingcompanylist.
Besides,thereareafewindependentcatfishbyproductproducersbuttheyareofsmaller
scales or operate in the form of fragmented household businesses. It is observed that the
number of small byproduct plants and household businesses have been increasing in the
lastfewyears.Theirproductionischaracterizedbylowqualityandlowpriceastheytarget
localmarketandChinesemarket.Thishasexertedcertainnegativeimpactsontheimageof
thelocalindustryandproducts.
Generalspeaking,byproductfactoriesaremakingbothfishmealandfishoil.Asmentioned
inthepreviouspart,mostofthemproduceunpurifiedoil.Thereareonlytwocompaniesin
Vietnamthatproducepurifiedoilfrompangasius.ThefirstoneisChineseownedHonoroad
ChongQingLtd.TheirfactorystartedoperationinApril2011andthecapacityis60,000tons
of raw materials per year. The second one is the Vietnamese Trisedco owned by
InternationalDevelopmentandInvestmentI.D.ICorporation.Theirfactoryiscurrentlyin
thetrialrunwiththecapacityof100,000tonsofinputsperyear.
2.1.

Demandoffishmealandfishoil

Themarketdemandforpangasiusfishmealandfishoildependsontheanimalfeedindustry
astheyareprimarilyusedasinputsforthefeedproduction.Thereforethefollowingpartwill
brieflyexplorethelocalfeedindustryandtheirdemand.
According to the Ministry of Agriculture and Rural Development, livestock farming in
Vietnamconsistsof23,000industrialfarmsand8.5millionhouseholdfarms.Thehouseholds
account for the bigger production: 65% of the pig, 70% of the chicken and 90% of cattle.
Annex2showsthelivestockproductionfortheperiodof20052010.
There has been a shift from household farming to industrial farming in recent years. The
trend has triggered the demand for industrial feed to grow at 1517% per year. Statistics
showedthatthelocaldemandforanimalfeedsin2010wasapprox.20milliontons,ofwhich
6milliontons(30%ofthetotaldemand)areimported.

13

At present, more than 200 feed factories are operating in Vietnam and 58 are foreign
investedcompanies.Theforeigninvestmentcompaniesaccountfor60%ofthetotalnational
production.Keyfeedproducers,bothlocalandinternational,arelistedinAnnex3.
Analysts say local feed ingredients can supply 3040% of the materials for the local feed
industry. Imports of feeds and feed ingredients have been on a steady rise since 2005.
AccordingtoAgromonitor,Vietnamimportsabigquantityoffishmeal,estimatedat40%of
thetotaldemandandtheimportsmainlycomefromPeru,IndiaandMalaysia.
Itshouldbenotedthat80%oftheindustrialfeedisforpigproduction.AstudybyThuyetal
2010,pangasiusfishmealcanbevaluableproteinsourcesandcompletelyreplacemarinefish
meal in the diets for pigs without affecting the digestibility and nitrogen retention. In
addition,thecatfishbyproductcanimprovetheperformanceaswellasreducethecostof
pigproduction.
Intheirstrategyto2020,theMinistryofAgricultureandRuralDevelopmenthastargetedto
increase the livestock population, particularly to 35 million pigs. Accordingly, the feed
industryistargetedtomanufacture19milliontonsoffeedswithanannualgrowthrateof
7.8%.
Figure5:Importsoffeedsandfeedingredients20052011(USDmillion)

2500

2330
2160

2000

1747

1723

2008

2009

1500
1124
1000

742
594

500

0
2005

2006

2007

2010

2011

Source:VietnamGeneralStatisticOffice
14

Ontheotherhand,alltheinterviewedcompaniessaythattheexportdemandforpangasius
fishmealandfishoilhasbeenincreasinginrecentyears.KeyexportmarketsincludeChina,
Taiwan, South Korea and ASEAN countries. The fact that China is still a traditional and
dominantmarketforVietnamesefishmealandfishoilhasexertedcertainpressureonlocal
suppliers on the price level. Therefore, good suppliers of high quality products have been
making efforts to improve the quality in order to be able to reach out to new markets,
particularlytheEUmarkets.
2.2 Marketpriceandcostfactors
PangasiusfishmealissoldlocallyataroundUS$900/tonwhiletheexportpricecanbeupto
US$1,050/ton (15% higher than domestic price). The price is significantly lower than the
marinewholefishmeal(US$1,300perton).Thepricefortherestrawmaterialsdependsa
greatdealontheexfarmcatfishprice,whichfluctuatesweekly.Atthetimeofthisreport,
themarketpriceforbyproductsrangesbetweenVND6,000VND6,500/kg(3235UScents),
whichissaidmuchhigherthanpreviousyearsasmoreandmorecompaniesjointhesupply
market.
Regarding production costs, raw materials are reported to account for 25% of the total
figure while labour accounts for 20%. The remaining is for technology, equipment
depreciationandoperationcosts.ItshouldbenotedthatVietnamhasayoungpopulation
(65%under35yearsold)andabiglaborforce(>51mil).Morethan4millionisnowworking
inthemarinesector.Locallabourisevaluatedashardworking,dedicatedandskillful.
Generally, pangasius byproduct is said to be a good source of profit for processing factories,
particularlyinthecontextoffallingpriceforfilletsduringthelastfewyears.Mostofthecompanies
reportthatthefishmealandfishoilbusinessyieldsbetterprofitandbettercashflowthanthefillet
processing business. Some factories can secure long term contracts for a half year or whole year
periodwithadvancepayment.Thepaybacktimeforinitialinvestmentsisestimatedfor3yearsifthe
companyisabletoexporttheirproducts.Nevertheless,expertssaythatthequalityoffishmeal

andfishoilisstilllow.ThatmakespriceforVietnamesepangasiusfishmealandfishoillower
thanforeigncompetitorsandtheprofitmarginissmallaswell.

15

VLegalFramework

Vietnamhasestablishednationallegislationandstandardsinordertocontrolthequalityof
pangasiusfarming,processingandaquaticfeedproduction.Thedocumentsrelatedtosuch
activitiesinclude:
FisheriesLaw
DecisionNo.1445/2013/QDTTgofthePrimeMinisterontheMasterPlanforthe
developmentofVietnamFisheriesby2020andorientationstowards2030.
Decision No. 70/2008/QDBNN dated June 5, 2008 of the Ministry of Agriculture
andRuralDevelopmentMARD,promulgatingtheRegulationonmanagementof
catfishrearingzonesandestablishments.
Decision No. 130/2008/QDBNN dated December 31, 2008, promulgating the
Regulation on control of harmful substances residues in aquaculture fish and
productsthereof.
CircularNo.03/2011/TTBNNPTNTdatedJanuary21,2011,regulatingtraceability
andrevokingaquaticproductswhichfailtoensurefoodsafetyandhygiene.
Circular No. 55/2011/TTBNNPTNT dated August 3, 2011 regulating inspection,
certificationofseafoodquality,foodsafetyandhygiene.
Circular No 14/2009/TTBNN dated March 21, 2009 guiding environmental
managementinseafoodprocessing.
QCVN 0214: 2009/BNNPTNN: National technical standard on industrial aquatic
feed producting plants Conditions for food safety and hygiene, veterinary
sanitationandenvironmentalprotection.
Sofar,thereisnospecificregulationontheproductionoffishmealandfishoilmadefrom
pangasius.
VIOpportunitiesforNorwegiancompanies
TheindustryanalysishasrevealedanumberofgoodbusinessopportunitiesforNorwegian
companiesbothasbyproductproducersandtechnologysuppliers.

16

SWOTAnalysis
Strengths

Weakness

Vietnam is the worlds 3rd largest

Abigproportionofpangasiusfarmsare

aquaculture nation. Fisheries is one of

of small scales and owned by farmers,

thekeyimportanteconomicsectors.

thus face limit access to financial

Pangasius production is huge with

sources for big investments/new

technologies.

annual output of 1.21.3 million tons,

the biggest among cultured species.

Production of fish meal and fish oil

Pangasius has been identified as a

made from pangasius byproducts is

strategic export item and received

stillfragmentedandoflowquality,low

strongsupportfromtheGovernment.

price.

Pangasius rest raw materials are

Technologies for preservation of raw

abundant, fresh and concentrated in

materials are not available, thus the

the Mekong Delta region. The catfish

byproduct processing depends on the

byproductsarerichinproteinandoil.

operationofthefilletfactories.
ExportmarketsforVietnamsfishmeal

Processing companies (with farming

activities)

are

international

familiar

business

and fish oil are limited in Asia with

with

Chinaasadominantmarket.

practices.

Prices:

Businesssizeandstructurearesuitable

Norwegian

products

and

to Norwegian structure, e.g. private

services are often regarded as more

and/orlistedcompanies,SMEsizeand

expensivethancompetitors.

verydynamic.
Norwegianmarineindustryisknownin
Vietnamasoneofthebestperformers.
Norwegian technologies are regarded
as high quality, safe and environment
friendlyfocusing.

Opportunities
WTO

membership,

Threats
Trans

Pacific

Vietnams macro economy has been

17

Partnershipagreement(expectedtobe

facingdifficultiesinthepastyears.The

completed in 2014) and upcoming

country still suffers from substantial

ASEAN Asean Economic Community in

trade and fiscal deficits, leaving the

2015 should give Vietnam greater

economy

access to both foreign markets and

economicuncertainties.

stronger

to

global

Pangasius production is on the down

capital while making Vietnamese

enterprises

vulnerable

through

size trend in 2013 as the industry is

competition.

experiencing

Master Plan for fisheries sector by

difficult

time

with

continuousfallingexportprices.

2020 set the target for aquaculture to

Vietnam is under the reform of the

reach4.5miltons,inwhich1.82.0mil

legal system, which implies instability

tonsfrompangasiusproduction.

or unpredictability of the national

Fisheriesstrategyby2020alsocreates

regulationsincertainsectors.
Curruption and kickbacks among

favorable investment environment to

attractforeigninvestors.

government officials still persist.

Demand for fish meal and fish oil as

However it should be noted that the

inputs for animal feed production is

government has been taking drastic

increasing both for local market and

measuresagainstcorruption.

forexport.

Utilization of pangasius byproducts is

still regarded as limited, resulting in
increased demand for technologies
and/or equipment for higher added
valueproductsderivedfrompangasius
restrawmaterials.
Wild catch production in Vietnam is
relatively large at 2.6 mil tons (2012),
opening up business opportunities for
theproductionofmarinefishmealand
fishoil.

18

Businesspotentialscanbeelaboratedinthefollowingparts.

1. Forbyproductproducers:
Establishment of advanced production of fish meal & fish oil: this is the right
time to enter the supply market using the abundant pangasius rest raw
materialsintheMekongDelta.Themarketsegmentshouldbehighqualityhigh
price or new products extracted from the catfish byproducts such as protein
concentrate.ThebusinesscantargetlocalmarketorAsianmarketswhicharein
bigdemandfortheiranimalfeedindustry.
R&D and production of collagen and gelatin: there is a big opportunity in
producingcollagenandgelatinfrompangasiusskin.OnlyVinhHoanGroupand
Binh An Corporation are in this market segment and they are still in the trail
productionwithsmallquantity.Themajorityofthecatfishskinisputintofish
mealandfishoilproduction.
Norwegian companies can set up wholly owned enterprises close to the sources of raw
materials in the Mekong delta. Alternatively, they can take partnership with a local
company. The most relevant local partners are pangasius producing and exporting
companies. Such companies have sound financial foundation, good international
experiencesandmostimportantlycansecurehighqualityrawmaterialsfortheproduction.
Althoughtheindustryentryisconsideredeasyforpotentialinvestors,theinstabilityofthe
legalsystemorinotherwords,frequentchangesinregulationsinVietnammayincreasethe
barriersformarketaccess.
2. For suppliers of technology and equipment: The potentials are highlighted in the
followingareas:
Improvementoffishmealqualitybyincreasingtheproteincontentsorextracting
highqualityproteinconcentrates.Severalstudiesindicatethatthroughaseriesof
valueaddedtechnicaltreatments,theproteinconcentrationcanfarexceed60%
orevencloseto70%.
Preservationofrestrawmaterials:withtechnologiesforpreservation,production
of pangasius fish meal and fish oil will not depend on the operation of fillet
19

processing output. Thus the volume and scale of processed byproducts can be
bettermanaged.
Purificationofcatfishoil.Manylocalbyproductfactoriesexpressinterestsinoil
purifyingtechnologyastheycanproducehigherqualityoilfordifferentusagesat
highermarketprices.
Utilizationofthevaluablecomponentsinthedilutedbloodwaterfromthefillet
processing.Currentlythedilutedbloodwaterisdischargedaswastewaterafter
certain treatment. According to Nha Trang Universitys study, the diluted blood
watercontainsfairlyhighproteincontentat57%60%.
Technologiesfornewproductssuchasgelatin,biodieselandfertilizerTheseare
goodopportunitiesforearlymovers.
For new advanced technology and equipment, it is common that the Norwegian suppliers
need to carry out pilot projects when penetrating the market. It is therefore strongly
recommended that the newcomers form partnership with one or some big processing
companies as well as initiate dialogues/cooperation with Norwegian establishments in
Vietnam, the Vietnam Association of Seafood Exporters and Producers VASEP or
Vietnameseresearchinstitutesintheinitialprocess.
In addition, for this market segment, price issue should always be taken into highest
consideration. Therefore, local production of parts is recommended whenever applicable.
Withtheirrelativelylowerlaborcosts(comparedtoChinaandothercountriesintheregion)
andskillfulworkers,Vietnamcanbeagoodproductionbaseforhighqualityproductswith
competitiveprice.

20

Annex1Top20PangasiusProcessingandExportingCompaniesin2012

No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Companies
VinhHoanCorp(onlypangasius)
HungVuongCorp
Agifish
AnvifishCo
Navico(pangasiusandtilapia)
I.D.ICorp
NTSFSeafoods
HungCaCo.,Ltd
Dathaco
CLFishCorp
SouthVina
Cadovimex
HTFood
Caseamex
AnPhuSeafoodJSC
BienDongSeafood
Godaco
HoangLongSeafoodCo.,Ltd
CuuLongSeafoodJSC
VinhQuangFisheriesCorp
Top20Total
IndustrialTotal

Revenue2012(US$)
154988396
111900532
91857355
82787234
58051547
58225736
50176911
43495411
43211162
42734081
42484436
42177333
37343033
34692462
34616435
33195115
31040433
27699794
25574759
25186675
1,071,438,840
1,744,000,000

Source:VASEP

21

Annex2VietnamLivestockproductionfor20052010

2005
2006
2007
2008
2009
2010

Buffalo&
Cattle
Population
Production
(mil.heads) (mil.
tonnes)
8.4
202.0
9.4
223.8
9.7
273.6
8.2
298.2
9.0
342.4
8.8
363.1

Pig

Chicken

Population
(mil.heads)

Production
Population
(mil.tonnes) (mil.heads)

Production
(mil.tonnes)

27.4
26.9
26.6
26.7
27.6
27.4

2288
2505
2663
2783
3036
3036

322
344
359
448
528
621

219.9
214.6
226.0
248.3
280.2
300.5

Source:VietnamGeneralStatisticsOffice

Annex3KeyfeedManafacturers(consolidatedlist)

Feedproducers

Foreigninvestedcompanies
Cargill(US)
CP(Thailand)
Ewos(Norway)

DeHeus(Netherland)
UniPresident(Taiwan)
Skretting/TomBoy(Norway)

Localcompanies
VICcompanyGoldenPigLtd
Proconco
VietThangFeedJsc
QuangMinhCorporation
VasafeedJsc
Dabaco
HongHaNutritionJsc(LongHai
Group)

Website

http://www.cargill.com.vn
http://www.cp.com.vn
http://www.ewos.com/wps/wcm/connect/ewos
contentvietnam/ewosvietnam
http://www.deheus.com.vn
http://www.unipresident.com.vn
http://www.skretting.vn

http://conheovang.vn/
http://conco.com.vn/
http://www.vietthangfeed.com.vn
http://qmcgroup.vn/
http://www.vasafeed.com
http://www.dabaco.com.vn
http://longhaigroup.com.vn/enGB/

22

REFERENCES
1. VietnamAssociationofSeafoodExportersandProducersreportsat
http://www.vasep.com.vn/
2. Surveyoftheproduction,processingandnutritivevalueofcatfishbyproductmealsinthe
MekongDeltaofVietnam,NguyenThiThuy,NguyenTanLoc,JELindbergandBOgle,2007
3. EvaluationofCatfishbyproductsasProteinSourcesforPigsintheMekongDeltaofVietnam,
NguyenThiThuy,2010
4. PangasiusByproductsinVietnam,NhaTrangUniversity,2013
5. VietnamFeedndustry,SwissBusinessHubASEAN/VietnamOffice,2012

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