At the sidelines of Vietfish 2019, President Ngo Quoc Tuan elaborated on challenges ahead to bring the company up to the next level
By Zuridah Merican
Family-owned and operated, Quoc Viet is one of the pioneers in commercial shrimp farming in Vietnam. Ngo Van Nga started the company in 1996, after many years in shrimp farming and processing. Today, the company is a leading exporter of shrimp products; both vannamei and monodon shrimp in various forms, ranging from raw head-on shell-on, cooked headless, to nobashi tail blanched shrimp and peeled tail-on breaded shrimp. Raw materials come from its own farms in Ca Mau province in the Mekong Delta, south Vietnam, supplemented by other farmer ponds, also in Ca Mau. Today, Quoc Viet is among the largest integrated shrimp farming businesses, with processing and farms. Coming soon is a hatchery business.
Ngo has now passed the running of the company to his three sons, Ngo Quoc Viet, Ngo Quoc Tuan and Ngo Quoc Kiet and daughters, Ngo Thuy Kieu, Ngo Thuy Huyen and Ngo Thuy Thi. Some 13 years ago, fresh from college in 2006, Tuan took over the reins of his father shrimp farming business. Now its president, Tuan said, Since the 1980s, my father had a basic yet efficient farming model. We had long term relationships with many farmers we were working with. This model also worked well for us as well as for farmers all over Vietnam and in the rest of Asia. More than 10 years ago, this changed as the markets, consumers, retailers, distributors and NGOs started to pay more attention to the sustainability of aquaculture, in general and in shrimp, the supply chain and processing.
Among Tuan driving force for the business, is the focus towards a sustainable production system, to meet the demands of buyers. Quoc Viet has always played a leading role in Vietnam shrimp farming sector. It was a platinum sponsor at the annual Vietfish International, a gathering of seafood producers, held this year from August 29-31 in Ho Chi Minh City. Quoc Viet is also a leading supporter of the Seafood Task Force (STF) which together with IDH, sponsored a conference to garner producers to join the former in reaching for a more sustainable shrimp farming industry in Vietnam.
In this interview with AAP, Tuan elaborated on his aspirations to bring Quoc Viet up to the next level of sustainability and on the challenges ahead.
What has changed in shrimp farming in Vietnam today as compared to your father time?
During my father time, the basic farming model worked well for us and for other farms in Vietnam. Today, social and environment sustainability is important. However, as we are close to farms and markets, we saw this coming and quite early, began our journey to attain certifications. We chose to go along with market demands. We started by working to achieve VietGAP and then looked at others such as GlobalGAP and Best Aquaculture Practices (BAP). These required investments to upgrade and as we seek to apply for other certifications, we are open to investments.
We are very lucky, as our father passed on to us the great appreciation and respect for the land, sea and all its people. Carrying on my father legacy, we will continue with a genuine commitment to sustainability and the environment.
We plan to upgrade with the latest technologies and sustainable practices to reduce cost of production, produce the best quality, good looking shrimp with good taste and have 24 hours monitoring of the shrimp, environment and water. Then we will apply those technologies to the small and large scale farmers we are working with. In today industry, it is not just production, but technology.
Disease was a big problem for us. We suffered from early mortality syndrome (EMS) a few years ago but with R&D, implementation of innovative techniques, we have solved the EMS issue. The worst years were in 2014 -2015 where mortality rose to as high as 70%.
What is required from Quoc Viet to achieve these standards?
Quoc Viet has been progressing rather well in terms of volumes; we produce 10,000 tonnes per year of farmed shrimp in our farms around Ca Mau in the south. As our processing capacity is 50,000 tonnes/year of raw material, we need the small farmers. Our plant is around 3 km or 15 minutes from our farms. Today, these farmers come from around Ca Mau but when we develop the efficient farming models, we will also reach out to independent farms in neighbouring Bac Lieu and Soc Trang.
Our export markets are mainly in Europe and the US; each support different third-party certifications. Other markets such as Japan, Australia and Korea have their own programs. China has started to care about BAP. Thus, creating a sustainable business is crucial for Quoc Viet. We have a four-star BAP for the processing plant, farms, hatchery and feed which is enough to meet the requirements of some markets. In terms of expansion, we are looking at setting up a hatchery business to make sure we have a consistent supply and 100% control of the supply chain. Integration into feed production is also important for us.
What are the innovations that Quoc Viet is looking at?
We are looking into recirculation aquaculture systems, biogas, treatment of waste water, auto feeders to control feed distribution and reduce feed conversion ratios (FCR) and feed waste, sensory systems to observe shrimp health, water and environment 24/7, systems to count shrimp population in the pond and other technological developments or artificial intelligence (AI) in shrimp farming. We only have in-house R&D teams for product development, but we work closely with scientists from local and foreign universities.
Today, our own farm is still considered small compared to our total processing capacity. When we invest more and can fulfill 100% of capacity from our farms, we believe that scientists, local and overseas, will be happy to join us and work for the overall benefit of the total industry in Vietnam; us and small farmers alike.
Why is the US market important for Quoc Viet?
The US market is a stable one with large volumes. Sometimes, the price may be very competitive but on the other hand, some big retailers and distributors look at consistency in product quality and sustainable supply chain. The good news for Vietnam is that most of the major exporters receive zero tariff for antidumping duties for the US market. This is a benefit for us to continue to focus on this market.
How did Quoc Viet reach this level?
In Vietnam, we can confidently say that we are one of the top companies and have been in shrimp farming and producing for a very long time. We have extensive experience in processing high value shrimp products. My father attributed where we are today to a historical relationship with Japanese customers. He said that with Japanese buyers, the business can be good and consistent. Initially, he faced a difficult time as Japanese buyers are very discerning and have very high and tough product requirements. But the more he worked with them, he began to appreciate them and learnt a lot. They are loyal and cooperative customers. When we did well in the Japanese markets, it was then easy to expand into other markets.
We believe that low price and low quality products are not a sustainable business. We need to produce good quality products consistently at reasonable costs. The consumer will appreciate value and will pay for them. We constantly work towards developing a consistent and sustainable business model.
What are your ambitions on the farming side?
Our ambition is to raise our own shrimp farm to the highest standards in shrimp farming in Vietnam. We want to transfer knowledge and technology to all the farmers and to our future investments in bigger farms.
We need to standardise the technology and farming models at both small scale and large-scale levels. To ensure sustainability in the entire supply chain, we could take over smaller farms, especially as shrimp farming is not an easy business. But if small farmers wish to continue farming, we will then try to get them to become shareholders of the Quoc Viet shrimp farming organisation. This way we control and economically help them to improve their lives. We want to guarantee the sustainability of the shrimp industry in Vietnam.
In farm technology, today our FCR is 1.3:1 but we would like to reduce to 1.1:1. We do not intend to change culture intensity as today; whether it is extensive, semi-intensive and intensive depends on the location of farms. The Mekong region mangrove forests are UNESCO reserve environments and is valuable for our people and for earth. As a company, we will do our best during our CSR activities to protect this environment. Therefore, we are keen to maintain extensive farming of black tiger shrimp in Ca Mau and we support the government by helping small scale families to farm this shrimp. Intensive farming is a solution for the shrimp supply chain while semi-intensive farming is for some places where we cannot implement intensive farming systems. It is the government and scientists who have come up with the semi-intensive model.
What are you looking forward to?
Recently our Prime Minister expressed interest in shrimp farming as a key economic sector, which is very favourable for all stakeholders. There are plans for sustainable development that is adaptable to climate change and is environmentally friendly. There are some USD500 million open for investments from the private sector, which is already investing and developing the shrimp supply chain.
The 10-year government plan from 2020 to 2030 is to move to a hi-tech shrimp industry and large-scale eco-shrimp farming. It has targeted 710,000ha of shrimp farming (600,000ha for and 110,000ha for farming) to produce a total output of 800,000 tonnes of shrimp at a ratio of 320,000:480,000 (monodon:vannamei) by 2020. During 2021-2025, the output planned is 1.1 million tonnes at a ratio of 400,000:700,000 (monodon:vannamei) from 600,000ha for monodon and 150,000ha for vannamei shrimp farming. By 2030, the target is 1.3 million tonnes from the same area at a ratio of 550,000: 750,000 (monodon:vannamei). Our aim is to have the highest farming standards in the world.