2017 marked the 10th year IDI, a member of Sao Mai Group, joined the seafood industry of Vietnam. Despite being a latecomer to many peers, IDI has made a spectacular advance to rise to be among the best performers in the industry and played an important part in billion-dollar export revenue of Vietnamese aquatic products.
Vietnam’s pangasius exports rose over 29 per cent year on year to US$1.68 billion in the first nine months of this year. Given positive market opportunity, the value may exceed US$2 billion in 2018.
According to the Ministry of Agriculture and Rural Development, the rapidly developing world market is supporting this industry. Shipments to China increased robustly. Shipments to the EU turned more positive since July 2018. The Vietnam Association of Seafood Exporters and Producers (VASEP) said that the US Department of Agriculture (USDA) affirmed that Vietnam’s catfish quality management system meets all quality standards management of the United States and this was expected to spur pangasius export to this demanding market.
Market scenario
2017 marked the 10th year IDI, a member of Sao Mai Group, joined the seafood industry of Vietnam. Despite being a latecomer to many peers, IDI has made a spectacular advance to rise to be among the best performers in the industry. The company’s total revenue reached VND5,332 billion and its profit after tax was VND350 billion. The firm played an important part in billion-dollar export revenue of Vietnamese aquatic export sector which earned nearly US$1.8 billion in the first nine months of 2018.
Asia is the largest market for IDI, accounting for over 64 per cent of the share. This is a great advantage for IDI as this market is expected to be a big consumer of Vietnamese pangasius in the near future.
In South America, Mexico is the largest market share for IDI, generating more than US$14 million for the firm, 44.5 per cent more than 2016 and 13.5 percent of IDI’s share. IDI also accounted for 12.2 per cent of market share in Colombia and 4 per cent in Brazil.
In Europe, in 2017, the company’s export shipments more than doubled the value in 2016, reaching more than US$5.6 million. In 2018, IDI planned to approach more customers in some potential markets such as the Netherlands, England and Germany to boost sales to about US$10 million. In the United States, IDI currently exports products not subject to antidumping duties like whole fish and fish cutlet. This reaffirmed the wise approach to sustainable market development strategy. This is also a golden lesson for its peers.
In general, IDI’s market structure is quite diversified and sales growth is impressive in most major markets, far surpassing the industry.
Decisive farming cooperation
To date, IDI is among a few companies that manage to maintain cooperated farming. Joint farms are supplying nearly 80 per cent of input demands for its two production factories. With input sources in hand, IDI not only builds a very solid foundation for stockpiling and readily supplying a wide range of products in time to strategic partners. Besides, maintaining the farming area also means that the company cultivates good cooperation with farmers and receives great support from farmers. Along with maintaining the farming cooperation model, IDI is urgently pressing on new investments in active organic farming. This is an apparent and trendy path in the current context that the company had predicted.
In the coming strategy, fillets produced by IDI will be globally branded for high quality, zero prohibited substances and absolute food safety to conquer global markets. Thus, besides consolidating and developing existing markets, IDI Fish will further approach new markets such as India (1.3 billion people), Indonesia (260 million people) or Japan. Recently, CJ Group of South Korea also sought the opportunity to cooperate with IDI to plan strategies to boost sales of aquatic products and value-added products such as fishmeal, fish fat, fish oil (Ranee) fish feed to the markets that CJ owns. This cooperation is opening up many new growth opportunities for Sao Mai Group with IDI being a very important link.
While it can ensure almost 100 per cent of production inputs, control breeding fish and supply fish feeds (Sao Mai Super Feed) with reasonable price and flexible market development strategy, IDI Fish will have a year of remarkable growth, expected revenue to hit VND6,500 billion and have a significant contribution to Vietnam’s target to bring aquatic export value to US$2-2.2 billion in 2018.
QH
Quoc Hung
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Vietnamese
