Vietnam’s leading pangasius company, Vinh Hoan, has aimed to allocate VND 580 billion (USD 24.7 million, EUR 22.8 million) of capital expenditures this year, down 27.5 percent from the projected totals in 2019, as the COVID-19 pandemic continues to disrupt business activities globally, the company said in its 2019 results report.
Of that total, VND 205 billion (USD 8.7 million, EUR 8 million) will be used for its new hatchery complex at Vinh Hoa in An Giang Province, an expansion project of the company's collagen factory, and a new food grade refined fish oil factory.
Vinh Hoan will continue to build nursery farms at the hatchery complex and complete necessary experiments to be ready for operation of the first phase by the end of this year.
Vinh Hoan already held a groundbreaking ceremony for the new food-grade refined fish oil factory in the Chau Thanh District of Dong Thap Province on 11 April.
The company expects to finish the expansion project of the collagen factory in July this year, with the capacity of the Vinh Hoan collagen unit increasing to 3,500 metric tons (MT) per year, it said. Vinh Hoan hopes to achieve USD 35 million (EUR 32 million) from sales of its collagen and gelatin products in 2020, up 60 percent from last year.
The pangasius producer will spend VND 30 billion (USD 1.3 million, EUR 1.2 million) building new small farms, and upgrading existing farms.
Another VND 160 billion (USD 6.8 million, EUR 6.3 million) will be allocated for a new cold-storage facility at its Vinh Phuoc plant in Dong Thap. Construction of the facility completed in January this year, a representative from Vinh Hoan told SeafoodSource on 11 May.
The remaining VND 185 billion (USD 7.9 million, EUR 7.3 million) will be used for other upgrade costs.
Vinh Hoan’s exports to China resumed from March due to a surge in demand from the retail sector and online shopping, following a drop in February due to the negative impacts from the COVID-19 pandemic.
Vinh Hoan also saw an increase in demand from the retail sector in the United States from March despite a decline in demand from restaurants and food services.
Meanwhile, demand for its pangasius in the European Union was “rather stable” because the fish is mainly sold in supermarkets.
This year the company targets to achieve accumulated sales of VND 8.6 trillion (USD 366.5 million, EUR 338 million) in a “high scenario” and VND 6.45 trillion (USD 274.8 million, EUR 253.5 million) in a “low scenario.”
Its net profit this year is projected at VND 1.063 trillion (USD 45.3 million, EUR 41.8 million) in a “high scenario” and VND 800 billion (USD 34 million, EUR 31.4 million) in “low scenario."
Vinh Hoan’s sales and net profit stood at VND 7.867 trillion (USD 335.2 million, EUR 309.2 million) and VND 1.179 trillion (USD 50.2 million, EUR 46.3 million) in 2019, respectively.
Its sales and profit plans might be affected by the possible prolonged slowdown of the global economy, an increase in tariff and non-tariff barriers, fragile exchange rates, and possible disruptions in supply chains, the company said.
Vinh Hoan earned lower net profit in the first quarter of this year due to dual impact from the falling pangasius prices and the outbreak of the COVID-19, according to its first-quarter results.
Photo by Toan Dao/SeafoodSource
