VASEP: 'Only 30-40% of seafood businesses can recover immediately after the quarantine'

According to Vietnam Association of Seafood Exporters and Producers (VASEP), by the end of August 2021, only 30-40% of seafood businesses in the southern provinces and cities can maintain "3 on-site" (3T); about 30-40% of businesses had to stop production because they could not implement 3T. The remaining businesses have suspended production to reorganize factories for 3T.

For factories implementing 3T, the number of mobilized workers is only about 30-50% of the total workforce, the rest are laid off. As a result, processing capacity has been reduced by 50-60%. It is estimated that the overall capacity of the whole region has decreased by 60-70%.

Tien Giang, Can Tho, Hau Giang, Dong Thap are the provinces with the largest number of seafood businesses that have stopped operating entirely or temporarily to reorganize under the 3T plan.

It is worth noting that many localities have been under quarantine for too long, 3T workers are looking forward to returning home. Therefore, it is very difficult for businesses to continue implementing 3T. On the other hand, the implementation of 3T has incurred a lot of costs while production capacity is reduced, so businesses cannot continue to survive much longer without Governmental support.

The seafood businesses following "3 on-site" tries to maintain the key workforce to continue production and operation of the factory, remaining workers are temporarily laid off and paid base salary.

Other businesses shut down and laid off employees, but struggle to maintain wages for workers and employees in order to retain employees.

Particularly in the provinces of Ca Mau, Soc Trang..., a few businesses are still trying to maintain the number of workers, divide shifts, separate streams to both ensure both production and pandemic prevention, control at the factory.

According to survey results by VASEP, only 30-40% of businesses have enough capacity to resume production immediately after the end of quarantine, the remaining will face diffculties and need a long time before resuming production.

The production recovery of businesses is being greatly affected by: Broken supply chain of raw materials, difficulties in transportation; Businesses lose customers due to quarantine and delivery schedule.

In particular, it is difficult for businesses to gather labor force because workers have not been vaccinated, so they cannot go to production facilities, have returned to their hometown, are under quarantine or treated for Covid-19...

Due to the impact of social distancing, suppliers of raw materials have also reduced their operating capacity, along with travel restrictions, halting the transportation, delivery of goods and materials for seafood processing. Existing sources of raw materials at factories are only enough for short term supply. If social distancing is prolonged according to Directive 16, the supply chain will be broken and businesses will have to stop operation due to insufficient raw materials for production.

Ms. Ta Ha, a pangasius market expert of VASEP, said that due to the impact of the pandemic and social distancing regulations, seafood businesses could not mobilize raw materials, leading to congestion, prices of many seafood products have plummeted, farmers have stopped breeding…

It is forecasted that in the last months of the year, the source of raw materials from aquaculture will be 20-30% short and the price of raw materials will increase by 10-20%.

Raw materials from marine exploitation also face many difficulties because fishermen cannot go to sea, fishing ports are also limited or closed. It is expected that the source of raw materials for marine exploitation will decrease by 30-40% and the price of raw materials is expected to increase by 20-30% in the last months of this year.

Due to social distancing, by the end of August 2021, up to 40-50% of orders are delayed and about 10-15% of orders are cancelled. In addition, many importers, although still ordered for the immediate future, may consider finding alternative sources of supply.

According to surveyed businesses, in case businesses are allowed to resume normal production after quarantine eases (after September 15th), orders for the year-end holiday season are also very limited.