Navico seeking strategic partner, return to US export market
Nam Viet Joint Stock Company (Navico) is seeking permission from the United States’ Department of Commerce to export to the United States again after stopping shipments in the midst of the so-called “whitefish wars” that saw the U.S. raise trade barriers to pangasius from Vietnam.
Navico focused heavily on exporting pangasius to the U.S. from 2002 and became the single biggest exporter of pangasius in the U.S. in 2007. But it halted exports of pangasius to U.S. in 2014 as the U.S. moved to impose high antidumping duty on the products from Vietnam, according to Navico.
Its rapprochement with the U.S. is part of its ambitious plans to further boost Navico’s growth in the future, Doan Chi Thien, a member of Navico’s board of directors and assistant to the company’s general manager, told SeafoodSource during the 2019 Vietfish seafood expo, which took place from 29 to 31 August in Ho Chi Minh City. Thien is a son of Doan Toi, founder and chairman of Navico, currently amongst the three biggest pangasius companies in Vietnam.
“The U.S. is a huge, high-value market,” Thien said. “That would be great if we can enter it [again].”
Navico initiated contact with the U.S. Department of Commerce (DOC) in June. The company has already submitted a request to U.S. authorities to resume shipping and shipped a container for testing. The request will be reviewed in 2020. Navico expects to receive a final decision on whether or not it will be permitted to export pangasius to the U.S. in 2021, Thien said.
But Thien added the company will continue to diversify its exports and will not be dependent on any single market.
Currently, Vinh Hoan and I.D.I are by far the two largest exporters of pangasius to the U.S.
Building the biggest farm
Navico’s plan to return to the U.S., one of the most important destinations for pangasius exporters from Vietnam, came as construction activities at the company’s biggest pangasius farm at Binh Phu in Mekong Delta have gotten underway.
Navico expects to complete construction and begin operations at the farm in the second quarter of 2020, Thien said. The farm, which Navico said will be the biggest pangasius farm in Vietnam, is already more than 80 percent complete, Thien said.
Navico said in July the company has already put into operation 20 ponds growing high-quality pangasius breeds and 150 ponds raising material pangasius. The company will harvest its first pangasius out of the operating ponds at Binh Phu in October and expects to a total volume of 20,000 metric tons (MT) by the end of the year. The output will be increased to 100,000 MT in 2020 and to 250,000 MT in 2021.
Navico began work at Binh Phu on 8 January, 2019. The company said at the time it would invest VND 4 trillion (USD 172 million, EUR 150 million) to build the project, which will cover 600 hectares in An Giang Province in Mekong Delta, home to much of Vietnam’s pangasius farming sector.
The project will include 150 hectares of ponds growing high-quality pangasius breeds which is expected to provide 360 million fries each year to Navico’s and other production farms in the region. The remaining 450 hectares of farms at the facility will produce about 200,000 metric tons (MT) of pangasius for exports, Navico said, adding that the project will apply GlobalG.A.P. standards.
The project will be equipped with advanced technologies, including nano-based technology, and the Bakture activator from Japan for water treatment. The high-tech application will help protect the environment and ensure high productivity for pangasius farming, the company said.
The project will enable Navico to fulfill its closed value-chain by supplying itself with all its commercial pangasius breeds.
Capacity expansion, planned stake sale
Navico is also in the process of expanding its processing capacity to meet the expected increase in farming production. The company plans to raise its actual processing capacity to 600 MT per day by the end of this year, according to Thien.
The designed capacity at the company’s four plants is 1,200 MT per day in total. The current actual capacity is more than 500 MT per day, or 45 percent of the total. Navico will boost the capacity to about 840 MT per day in 2020, or 70 percent of the total.
The increase is attributed to higher demand for its pangasius from China, the Middle East, and India, Thien said, adding that the company currently has good money flow.
In the first half of this year, the company had sales of VND 1.975 trillion (USD 84.8 million, EUR 76.6), up 17 percent year-on-year. It pulled in a net profit of VND 353 billion (USD 15.2 million, EUR 13.7 million), up 1.8 times from the same period last year. Navico has targeted to gain sales value of VND 6 trillion (USD 257.6 million, EUR 232.7 million) and VND 700 billion (USD 30 million, EUR 27.2 million) of net profit in 2019.
The company’s leadership is considering a plan to sell part of its stake to a strategic partner as part of a restructing to help boost its business activities, Thien said, adding that the company is willing to consider partnerships with either Vietnamese or foreign companies. Thien refused to provide any timeframe for the stake sale or the size of the deal. He said either the company or his family will divest the stake – currently, the family of the company chairman, Doan Toi, owns 70 percent stake in Navico.
Another big player in Vietnam, Minh Phu, already chose Japan’s Mitsui & Co. as its strategic partner. The top shrimp company was paid VND 3.038 trillion (USD 130.3 million, EUR 114.6 million) by Mitsui & Co. in June this year in exchange for 60 million company shares.
Photo by Toan Dao/SeafoodSource