Proactive and confident

In the context of the world economy always in a state of "Volatile, uncertain, complex, ambiguous" as commented by many businesses, complying with the business principle of "Do not put all your eggs in one basket" is always something that businesses thoroughly implement. Therefore, once forced to abandon a certain market, although difficulties in the beginning are inevitable, businesses are not passive and worried too much.

Not only confident in their deep processing skills, Vietnamese shrimp enterprises are also always proactive in building scenarios and strategies to change the market so as not to interrupt production and business.

Advantages of deep processing

In addition to speeding up the delivery of contracts with delivery dates from April to June as requested by partners, some businesses also predicted that there would be a strong purchase of goods during the 90-day tax deferral. However, that did not happen and even if it did, businesses would find it difficult to do so. The reason is that the shipping time from Vietnam to the US takes about 38-45 days, so businesses only have about 40-45 days to purchase and process (from the date the tax deferral decision takes effect). This is a relatively short period of time, plus the shrimp reserves are low, and the domestic supply of raw shrimp is also not much (due to the difficulties in the first farming season of the year), so domestic shrimp prices are high.

Competition in the US market is fierce, because this is the market with the lowest profit margin of all markets. However, according to Mr. Ho Quoc Luc, Chairman of Sao Ta Board of Directors, the US is still a market with a very large consumption scale. Because of the large capacity, there is a high price tolerance - meaning that if their products are of better quality, they can still sell at a price 10% higher. Therefore, businesses always try to maintain and sustain this market, in order to stabilize production, retain workers, maintain revenue, take the initiative in cash flow as well as keep up with the market.

According to businesses, the main issue is the difference in the final reciprocal tax rate between Vietnam and its competitors, not whether the tax is high or low. For example, if Vietnam's final tax rate is 23% and the tax rate for other major shrimp exporting countries (Ecuador, India, Indonesia, etc.) is 20%, Vietnamese shrimp still has a chance to compete in the US market. In the case that the 46% tax rate is maintained for Vietnamese shrimp while competitors are around 20%, it is considered that Vietnamese businesses have to "temporarily stop playing" in the US market.

Further explaining the above issue, according to businesses, although Indian or Ecuadorian shrimp is cheap, they mainly export raw shrimp, due to lack of labor and deep processing technology. Meanwhile, Vietnamese shrimp businesses have invested heavily in deep processing, meeting the standards for exporting to high-end distribution systems in the US, with high value. Also according to businesses, although the profit margin in the US market is not high, once this market is lost, the revenue and profit of businesses as well as the export turnover of the whole industry will certainly decrease. This is something that businesses do not want, but scenarios and plans for the situation of being forced to leave the US market must still be carefully prepared so as not to be passive.

Confidently redirect the market

Since Vietnamese shrimp was involved in an anti-dumping lawsuit in the US market and especially after the difficulties in shipping costs due to the impact of the COVID-19 pandemic, military conflicts, etc., most shrimp exporting enterprises have built their own strategies and scenarios and plans to change the market, so once they are forced to withdraw from the US market, they do not have to worry too much. However, enterprises also admit that adjusting sales and profit plans for 2025 is almost a must, but more importantly, finding new directions and new markets, focusing on exploiting the advantages of markets that have FTAs with Vietnam.

At the recent Annual General Meeting of Shareholders, when answering shareholders' questions about the situation of being forced to leave the US market, Sao Ta's leaders said that the scenario of not having a US market had been prepared for 5 years ago, so it certainly would not be too passive. Accordingly, if it is not possible to continue exporting to the US, Sao Ta will increase its penetration into other markets, such as Canada, Australia, Korea and especially Japan, where they have strengths compared to competitors. Sao Ta's leaders also affirmed that market expansion is not something that has just been done now, but has been done for many years. Therefore, the time to approach new markets will generally not be too long, and it could even be implemented this year.

The reason why Sao Ta leaders are confident is because they have the advantage of knowing many partners from before, being trusted by partners and being willing to expand imports if Sao Ta proactively supplies. Not only that, according to Sao Ta leaders, in many cases, they are willing to support prices to start, then develop long-term partners. Thus, the cost of accessing new markets is there, but not too large or uncontrollable. "This year, we continue to promote new markets such as Canada and Australia, which have strict import standards, but thanks to good farming areas, we are confident that we will meet the requirements. In addition, the Korean market also has the potential to increase production," Mr. Luc added.

There is still time for businesses to come up with appropriate countermeasures for their immediate goals and prepare the next steps for a long-term strategy. Hopefully, everything can still be at an acceptable level as expected by businesses so that the shrimp industry can overcome difficulties and affirm its position in the world market.

Article and photos: HOANG NHA

Source: https://baocantho.com.vn/chu-dong-va-tu-tin-a186682.html