Glitz, glamour and pangasius

Pangasius farmers in Vietnam are being urged not to panic following the recent collapse of Binh An Seafood Joint Stock Co. (Bianfishco), one of the country’s biggest pangasius processors. According to local press reports, the collapse has sparked fears of a domino effect, where other processors would go to the wall leaving farmers with fish on their hands that they could not sell.

However, the Vietnamese Association of Seafood Exporters and Producers (VASEP) has told the farmers that more export contracts will be signed during the next month or two. By that time, said VASEP, the demand for fish will increase rapidly, and sale prices could skyrocket due to the lack of raw material.

“The export markets will be much better in the upcoming months; by that time the demand will escalate. Therefore, it would be a blunder if farmers sell fish right now at low prices,” said Truong Dinh Hoe, secretary general of VASEP.

VASEP has estimated that the amount of pangasius currently available for processing is about 200,000 metric tons, or just 17 percent of the annual requirement of 1.2 million metric tons. “The figure is not big; therefore, farmers should not worry that their fish will be unsalable,” said Hoe.

Meanwhile, the Bianfishco saga rumbles on. While Pham Thi Dieu Hien (pictured), the company’s chairwoman and general director, is reported to be sunning herself in California — there is a report that she has been ordered back to Vietnam — her husband, Tran Van Tri, has been left carrying the can. According to local press reports, the company’s debts could be as high as USD 71.8 million. While Tri has said his family will sell 80 percent of the company to pay these off, doubts still remain about its future solvency.

There are rumors that a Dutch importer is investigating a potential takeover. Bianfishco owns three state-of-the-art processing plants. One of these is for basic filleting and freezing, one for manufacturing value-added products — not just from pangasius — and one for producing a health drink based on pangasius processing off-cuts.

Furthermore, Bianfishco has a solid export base in the United States, and with a reduction in pangasius tariffs, this is now a very attractive market. It could be an enticing prospect for a European importer, giving that company a foothold in another major pangasius market, which is only going to get bigger as U.S. importers are currently paying higher prices than their European counterparts.

One would assume that there would be some re-structuring of the Bianfishco debt burden for this to take place, but Bianfishco is regarded as being too big to be allowed to collapse completely. (The Vietnamese government has asked to be kept informed of developments.)

Analysts are reported to have said that Bianfishco’s problems are rooted in gross mismanagement rather than the global economic crisis, high inflation and high interest rates. They blame the company (in other words Hien) for unwise investments in property, stocks and short-term projects, as well as purchasing U.S. dollars, instead of investing in the company’s core activity, seafood processing and export.

Hien had already been criticized for being wasteful, spending billions of dong (the Vietnamese currency) on a ceremony to launch the company’s functional food factory, which produces the health drink. And this was before she spent a reported USD 500,000 on her son’s wedding. 

The ostentatious spending was designed to grab attention, and Hien made no bones about it. She told the media that the extravagant ceremony aimed to prove a point — that she was not in debt. Ironically, this came only a few days before the announcement that Bianfishco was insolvent.

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