BioMar looks to bolster position in global shrimp industry
He was commenting after BioMar and Vietnam’s leading shrimp hatchery Viet-UC announced yesterday, April 23, that they had signed a memorandum of understanding in relation to BioMar’s intention to become part owner and operational lead in Viet-UC's feed factory.
The non-legally binding agreement means the two companies can focus on exploring the possibilities further, in an exclusive arrangement, before official confirmation.
The companies are looking to establish a partnership developing and producing aqua feed in Vietnam. Viet-UC is one of the leading shrimp hatcheries in the world – it is aiming to build an integrated seafood group, said BioMar. The Danish group would bring its feed development capabilities, based on extensive R&D and market insights, to the alliance.
“We believe that a feed partnership with Viet-UC in Vietnam will bring important synergies to the feed business as well as the hatchery and grow-out business of Viet-UC. Both companies have a common focus on sustainability, food safety, traceability, quality and performance, which we believe will be strong drivers to strengthen and develop both companies as well as the aquaculture industry in Vietnam,” said Diaz.
BioMar is already involved in shrimp feed production in South and Central America – it has factories in Ecuador and Costa Rica, and its Aquaculture Technology Centre in Ecuador is dedicated to shrimp. A move into South East Asia, it argued, would strengthen BioMar’s position in the international shrimp sector.
Producing high quality post larvae and exploring the link between genetic and nutritional development are increasingly a focus for BioMar. “So partnering with one of the leading companies within this field in order to develop high performance feeds, concepts and value chain collaborations makes a lot of sense in order to promote a positive development of the shrimp industry,” said the CEO.
Unlocking the potential of Vietnam’s shrimp industry
The Vietnamese shrimp industry must take immediate action to keep up with fast-moving competitors, according to a report published in August 2019 by the Boston Consulting Group: A Strategic Approach to Sustainable Shrimp Production in Vietnam.
Vietnam, trailing China and Thailand, used to be the third-largest shrimp producer in the world, but nations such as India, Indonesia, and Ecuador have surpassed Vietnam in productivity. Vietnam is now the fifth-largest producer, with a global market share of about 11%, and its shrimp production is expected to increase by only about 2% in 2019, the authors noted.
Vietnam has developed a robust business model around exports, they said. Other countries, such as India, export raw shrimp to Vietnam for additional processing and reexport. “This model has been successful for many years, but it makes product traceability difficult and creates a dependency on other countries for imports.”
The Vietnamese government recently developed a master plan for expanding shrimp exports and supporting more sustainable shrimp-farming methods. To achieve these goals, shrimp producers need to make significant operational changes, reported the authors.
“Vietnamese shrimp producers can make short-term changes to improve existing systems and boost EBIT margins, but those changes would be only stopgap measures.”
New and improved farming methods—including functional feed that promotes shrimp growth and health, as well as treatment systems that improve water quality—are emerging. These methods can boost farming efficiency and EBIT margins by up to about 40% in the near term and can improve biosecurity on individual farms, found the report.
“But these short-term changes don’t address the risks inherent in the Vietnamese shrimp industry’s current business model—nor do they help the industry move toward sustainability.
“To unlock the industry’s potential, boosting productivity, increasing traceability, and conserving resources are imperatives for Vietnamese shrimp producers,” said the authors.
