Minh Phu Seafood Corporation is setting its sights on the Chinese market, aiming for a substantial increase in sales. With an initial target to boost sales to 10%, the company plans to escalate this figure to 20% and beyond. This shift comes as part of Minh Phu’s broader strategy to navigate current market challenges and capitalize on China’s vast consumer potential.

Addressing US Market Challenges

During the recent General Meeting of Shareholders, General Director Nguyen Quang provided insights into Minh Phu’s strategic direction amidst concerns about the US market and ongoing tax investigations. Minh Phu’s recent victory in an anti-dumping lawsuit has positioned the company favorably by exempting it from anti-dumping taxes, unlike its competitors. Despite this win, heightened competition from Ecuador and India, which are flooding the US market with low-priced shrimp, has prompted Minh Phu to re-evaluate its market focus.

Vietnamese shrimp producers, including Minh Phu, face significant competitive pressures due to lower success rates in shrimp farming. Vietnam’s farming success rate stands at 40%, significantly lower than India’s 70% and Ecuador’s impressive 90%. This disparity has led to higher production costs, with Vietnamese shrimp priced 30% higher than Indian shrimp and double that of Ecuadorian shrimp.

Strengthening Domestic Partnerships

On the domestic front, Minh Phu has forged successful partnerships with the Bach Hoa Xanh supermarket chain, achieving commendable sales in 2023. Looking ahead, Minh Phu anticipates even stronger collaboration in 2024, adhering to a mutual benefit principle. However, challenges remain, as unsold products are at risk of being canceled. To mitigate this, Minh Phu is working with Bach Hoa Xanh to repurchase unsold shrimp for reprocessing, ensuring stringent quality control. Additionally, Minh Phu is enhancing its marketing efforts targeting restaurants and hotels to boost domestic purchasing power.

Reflecting on the first half of 2024, Mr. Quang acknowledged that business performance has not met expectations, with weak export activity partly due to the US imposing high tariffs on China, leading to logistical bottlenecks. However, these conditions are expected to improve by July, potentially revitalizing Minh Phu’s export operations. Recruitment challenges have also impacted operations, as the company struggles to meet its workforce targets. Despite these hurdles, productivity per worker has increased, providing a silver lining.

Ambitious Goals for 2024

For 2024, Minh Phu has set ambitious targets, aiming for a production output of 70,000 tons—one and a half times higher than the previous year’s performance. The revenue goal is set at VND 18,568.7 billion (USD 730.56 million), reflecting a 72.5% increase, with a projected profit after tax of VND 1,265.7 billion (USD 49.77 million), a significant turnaround from a previous loss of VND 105.07 billion (USD 4.13 million).