Vinh Hoan CEO Ngo Vi Tam Nguyen is excited about the opportunities opening up in global markets for pangasius, her company’s premier product.
Many countries have banned the importation of Russian products as a result of that country’s invasion of Ukraine, creating shortages of cod, haddock, and pollock.
The opportunity available to Vinh Hoan has materialized in the form of a contract with Nomad Foods, which owns frozen seafood brands Birds Eye, Findus, Iglo, Ledo, and Frikom, and is one of Europe's largest frozen food companies. Vinh Hoan, along with fellow Vietnamese pangasius producers Godaco and VDTG, signed a second-straight one-year contract with Nomad to provide it with Aquaculture Stewardship Council-certified pangasius.
“It is happening already since early last year,” Tam told SeafoodSource. “Nomad and other companies are replacing some of the volume lost from Russia sanctions with pangasius from Vietnam.”
Vinh Hoan is also seeing heightened opportunities to sell into the U.S., Tam said.
“It has been happening,” she said. “Having said that, in the whitefish market, prices and availability are key.”
Chinese production has come back online after the end of the country’s zero-Covid policy in November 2022, and more whitefish is being processed there. Since many countries with sanctions against Russia don’t extend them to Russian fish processed in a third country, that could increase competition and increase whitefish availability.
Competition on fillets has been more significant than the value-added segment, and value-added products have not been as impacted by the effect of inflation on consumer purchasing in the U.S. and Europe, according to Tam.
In response, Tam said she would like to continue improving the company’s value-added sales mix. The company’s two newest products are both the result of its opening of a surimi factory in Cao Lanh, Dong Thap, Vietnam in October 2022. Using Korean and Japanese technology, Vinh Hoan is now doing pangasius surimi blocks and imitation crab sticks for both foodservice and retail. The new factory is capable of production up to 1,000 metric tons of surimi products annually.
Vinh Hoan has also moved into shrimp chips via its Sa Giang subsidiary including non-seafood items such as Thai jackfruit and red dragon fruit freeze-dried snacks and fried banana chips with flavorings. But pangasius remains the company’s focus, and Tam said she’s worried inflation is hurting the species internationally.
“Pangasius is known as a value fish, and if the product is more expensive, then it creates challenges,” she said. “We are hearing different opinions about the demand for pangasius from foodservice and retail, that maybe it could be better for foodservice than retail, but we are also thinking people are now tending to stay home more and cook more, so maybe there is more opportunity with that at retail.”
Vinh Hoan has been boosted by the resurgence of buying from China within the past one to two months, Tam said. But she said the latter half of 2023 could prove to be a difficult time as farming costs have continued to rise in Vietnam, which she expects will result in higher pricing. And continued higher prices could results in challenges on volume starting in Q4 2023, she said.
“We’ll wait and see what we happens in the next two or three months,” Tam said. “If things don’t turn around significantly, then [the] supply side will be questionable.”
Photo courtesy of Cliff White/SeafoodSource
