Vietnamese shrimp company Minh Phu Seafood has outlined plans to increase both its domestic sales and its sales to China, as competition has intensified in the U.S., according to CEO Le Van Quang.
The U.S. has traditionally been a key market for Minh Phu shrimp, but in recent years, the company has faced heavy competition from firms from Ecuador and India, which have aggressively upped their sales to the U.S. by offering low prices and even tolerating losses to expand their market share, Quang said at the company’s 2024 annual stakeholders meeting in June.
Minh Phu’s sales to the U.S. fell to USD 103.4 million (EUR 96 million) in 2022 and then again to USD 100.6 million (EUR 93.5 million) in 2023, representing 16.7 percent and 22.3 percent of total sales in those years, respectively, falling from annual market shares of between 38 percent and 40 percent, respectively, in the past.
Conversely, Ecuador’s shrimp sales to the U.S. have continued to grow, with the latest data showing the country’s exports to the U.S. increased 41 percent year over year in April and May of 2024, according to a 1 July Shrimp Insights blog post.
One significant disadvantage for Minh Phu and other Vietnamese shrimp exporters is the high raw material prices that farmers in Vietnam face compared to Ecuador and India.
Production costs in Vietnam are approximately 30 percent higher than in India and Indonesia, where shrimp-farming densities are lower. As for Ecuador, Vietnam's production costs are often double those of farmers in the South American nation due to significantly lower survival rates in Vietnam.
To alleviate this, Minh Phu is banking on its new shrimp farming model, MPBio, to substantially reduce production costs, enabling the company to compete more effectively in the future.
For now, though, besides heavy competition, the U.S. has also established some of the highest standards for antibiotics and other regulations for imported shrimp.
For example, in March of this year, the U.S. Department of Commerce announced that most of Vietnam’s shrimp companies, including Minh Phu, will face a countervailing duty of 2.84 percent when shipping their products into the country.
Minh Phu is aiming for its U.S. sales to comprise around ...
