Between 20-30% of tra fish processing and exporting companies are on verge of bankruptcy this year due to a serious shortage of capital and materials.
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the Vietnam Development Bank (VDB) has advocated the association’s proposal of offering urgent financial support to tra fish companies. The bank is seeking the Prime Minister’s approval for three proposals.
The case of Binh An Seafood Joint Stock Company (Bianfishco) is an alarm for challenges in the industry
The VDB requested the PM to sign off on extensions of loans for seafood exporters in general and tra fish exporters in particular, who are coping with financial difficulties while waiting for the Government to issue regulations on dealing with export and investment credit risks. The maximum proposed extension time is two years. The VDB will co-operate with VASEP to consider companies on a case by case basis for the extension and financial assistance programmes.
The VDB has also sought the Prime Minister’s permission to offer capital to companies which have seafood processing factories and aquatic raising areas in addition to those who specialise in buying fish from producers.
The VDB has urged VASEP and concerned agencies to give support to large seafood exporters who have halted operations. According to the VDB, banks should be permitted to give debt extensions and continue providing new loans so they can resume operations.
VASEP has estimated that companies will need around VND5 trillion (USD238 million) to buy 200,000 tonnes of tra fish. The association recommended that the VDB give preferential loans to tra fish businesses who already have export contracts so that they can purchase the materials to fulfill those contracts.
More than 90% of tra fish businesses in the country are in dire need of capital and have been running at 50-70% below capacity, the vice president of VASEP, Nguyen Huu Dung, was cited by Vietnam News Agency as saying.
