A DEVELOPMENT STRATEGY FOR THE FISHERIES INDUSTRY IN VIETNAM

by

Lai Huy Hung

A research submitted in partial fulfillment of the requirement for the degree of Master of Business Administration

Examination Committee

Dr. redric !illiam "#ierc$e% &Chairman' Dr. Hans "toessel Dr. Do Ba (hang

)ationality +re,ious Degree

*ietnamese Bachelor of Business Administration -ni,ersity of Economics Ho Chi Minh City. *ietnam

"cholarship Donor

/o,ernment of "#it$erland0"DC &"A*'

Asian 1nstitute of 2echnology "chool of Management Bang%o%. 2hailand April 3444

Acknowledgement
1 #ould li%e to express my sincere than%fulness and indebtedness to my research ad,isor Dr. redric !illiam "#ierc$e% for his guidance. ad,ice and encouragement through out the research #or%. My sincere than%s are also due to Dr. Do Ba (hang and Dr. Hans "toessel for examining the research #or% and gi,ing ,aluable comments as the members of examination committee. 1 #ould li%e to express than%s and appreciation to +rof. Hoang 5uan 2hong 6 Director of 1nstitute of isheries Economics and +lanning. Dr. 2ran Huu Chinh 6 /eneral director of 1D1C7. Miss. )guyen 2hi )ga 6 +lanning ,ice director of "cience. 2echnology and En,ironment Department. Dr. )guyen 2hanh Hung 6 ,ice dean of fisheries faculty of HCMC -ni,ersity of Agriculture and orest. for pro,iding information and inter,ie#. !ithout their helping. this research #ould not ha,e been possible. 1 #ould li%e to express my sincere gratitude to all of my teachers and others at A12 and "#iss *ietnam A12 Management De,elopment +rogram for their teaching and supporting during my course. 1 #ould li%e to express my deeply appreciation to 2he /o,ernment of "#it$erland #ho ga,e me a great chance to participate in MBA study by pro,iding financial support. "pecial #ord of appreciation goes to my parents and family for their support. endurance and encouragement throughout my study. Last but not least. special than%s to my close friend and classmates for their friendship that made my study more memorable #ith en8oyable and excitement.

ii

Ab t!"ct

Due to the resources lac%ing and to sur,i,e in the competiti,e #orld of *ietnamese fisheries industry. it is necessitated to analy$e the fisheries industry distinctly and explore factors. 2he main ob8ecti,e of this research is to formulate a de,elopment strategy for *ietnamese fisheries industry. A number of strategic formulation techniques are employed to analy$e the internal strengths and #ea%nesses. external opportunities and threats as #ell as the internal lin%ages of the industry. 1n general. *ietnamese fisheries industry has potential competiti,e ad,antages for de,elopment. 2o exploit these potential ad,antages. it necessary to rationally manage and control the balance de,elopment bet#een sub9sectors as #ell exploiting the strengths of these sectors. 1t is suggested arrays of policies and regulations for strengthen competition of fisheries industry. #hich are mainly focused on industry internal lin%ages and the rational exploitation of natural resources.

iii

TITLE PAGE

A#$NO%LEDGEMENT A&STRA#T LIST OF FIGURES LIST OF TA&LES INTRODU#TION 1.1 Background 0.1 Problem statement 0.2 Objectives 0.3 Approach to the study 0. !"pected contribution 0.# $cope o% the study 0.& Organi'ation o% the research LITERATURE REVIE% 0.( $trategic management process 0.(.1 )e%inition o% strategy 1.1.1 Process o% strategic management 0.* +oncept o% industry environment 0., -ndustry analysis 1.1.2 $tructural determinants o% industry development a. /hreat o% ne0 entry b. 1ivalry among established companies c. /he bargaining po0er o% buyer d. /he bargaining po0er o% suppliers e. /he threat o% substitute products 1.1.3 2ational determinants o% industry development a. 3actor conditions b. )emand conditions c. 1elated and supporting industries d. 3irm strategy4 structure and rivalry 1.1. $5O/ analysis INDUSTRY #HARA#TERISTI#S AND SO#IO ) E#ONOMI# STATUS OF FISHERIES INDUSTRY 0.10 Organi'ation and management 0.10.1 6inistry o% %isheries 76o3. 0.10.2 $tate organi'ation 0.10.3 8niversities 0.10. 1esearch -nstitutes 0.10.# Other institutions and agencies 0.10.& !"tension services 0.11 1egional distribution o% %isheries 0.11.1 1ed river delta

II III VII VIII ' 1 1 2 2 2 2 2 ( # * 10 10 11 12 13 13 13 1 1# 1# 1& 1& 1& '* 1* 1* 1* 1* 1, 1, 1, 20 20

iv

0.11.2 2orthern 6ountain 0.11.3 $outh central coast 0.11. $outheast area 0.11.# 6ekong 1iver )elta 0.11.& 6ountainous and 6iddle high lands 0.11.( +entral highlands 0.12 )emography 0.12.1 Population and population gro0th 0.12.2 Age structure 0.12.3 $e" structure 0.12. 9ousehold structure 0.12.# Agriculture and living land distribution 0.13 5ork%orces 0.13.1 +haracteristics 0.13.2 :abor in %ishery industry 0.13.3 3emale labor 0.1 -ncome structure 0.1# +apital structure 0.1& !conomic structure 0.1&.1 $tate O0ned sector 0.1&.2 +ollective sector 0.1&.3 Private sector 0.1&. 9ousehold sector 0.1&.# 3oreign sector 0.1( /raining and education 0.1* -ncentive programs 0.1, 9ealth care system FISHERY INDUSTRY ANALYSIS 0.20 3isheries e"ploitation 0.20.1 A;uatic resource 0.20.2 3ishing capacity 0.20.2.1 3ishing %leet capacity 0.20.2.2 +ategories o% %ishing gear 0.20.2.3 :abor in %ishing sector 0.20.3 <ield and productivity 0.20. 3resh0ater %ish e"ploitation 0.20. .1 Pond %ish e"ploitation 0.20. .2 3ish e"ploitation in lo0 land areas 0.20. .3 1iver %ish e"ploitation 0.20.# +onclusion 0.21 3isheries a;uaculture 0.21.1 5ater $ur%ace 0.21.2 :abor in A;uaculture $ector 0.21.3 /otal <ield and !"ported =alue 0.21. +ulture 6ethod 0.21. .1 3resh0ater culture

20 20 20 21 21 21 21 21 22 22 22 22 22 22 23 23 23 23 2# 2# 2# 2# 2# 2# 2# 2& 2& +, 2( 2( 2* 2* 30 31 31 33 33 33 33 3 3 3 3# 3# 3# 3#

0.21. .2 Brackish shrimp culture 0.21. .3 6arine culture 0.21.# !"tension service %or a;uaculture 0.21.#.1 Brood>stock hatchery system 0.21.#.2 3eed production 0.21.& +onclusion 0.22 3isheries Processing and 6anu%acturing 0.22.1 1a0 material 0.22.2 1a0 material processing 0.22.3 Processing and 6anu%acturing %acilities in %isheries industry 0.22. :abor in %isheries manu%acturing 0.22.# Product categories 0.22.& 3ood ;uality inspection and management 0.22.( +onclusion 0.23 3isheries trading 0.23.1 3oreign market 0.23.1.1 !"ported value 0.23.1.2 !"porting market 0.23.1.3 !"ported products 0.23.2 )omestic market 0.23.3 +onclusion STRATEGI# INFORMATION AND RE#OMMENDATIONS 0.2 $ummary o% analysis 0.2# )evelopment strategy %ormulation 0.2& 1ecommendations 0.2&.1 3isheries e"ploiting 0.2&.2 A;uaculture 0.2&.3 Processing 0.2&. 6arketing and trade 0.2&.# $upportive industry 0.2&.& ?eneral #ON#LUSIONS
:eferences Appendixes

3& 3( 3( 3( 3* 3* 0 0 1 1 3 # # & ( ( , , #0 #0 -+ #2 #2 #3 #3 # ## #( #( #* -.

vi

LIST OF FIGURES

vii

LIST OF TA&LES

viii

#/"0te! '

Int!od1ct2on

'3'

&"ckg!o1nd

*ietnam fisheries. being a long9standing one. are an important economic sector. *ietnam fisheries productions contribute yearly more than ;< of /D+ and attract a manpo#er of more than = million people. 2he total output and export ,alue of the fisheries industry continuously increase respecti,ely from >.? mill tones and -"D @@4 mill and in >;;@ to >.A mill tones and -"D ;A4mill in >;;;. 2hough ha,ing great potential. *ietnamBs fisheries sector remains underde,eloped. At present. *ietnam has only >?3 fishing ports. 33 others are in construction. Degrading ma8or infrastructures such as #ater supply. electricity and transport systems can not ser,e de,elopment of the sector. 1n recent years. foreign in,estors ha,e cancelled ?? out of ?A D1 fishery pro8ects. Merely ?< of capital for aquaculture are from foreign in,estment>. Lac%ing money and %no#ledge. farmers ha,e failed to de,elop effecti,e aquaculture. ;C.=< of fish raising areas are of extensi,e culti,ation #hich can generate lo# yields. 2ens of thousands of aquaculture farms ha,e suffered from losses and ban%ruptcy #hen their fish die or are not good enough to be exported due to lac%ing breeding technologies. *ietnam no# has >;C aqua9product processing factories. D4< of them ha,e been #or%ing for o,er ten years #ithout upgrades. Due to insufficient in,estment. most enterprises and families donEt ha,e reno,ated equipment to increase their output. 2o date. the country has only 3D enterprises qualified to export products to the European mar%et. Around A>< of aqua9product exports are sold at lo# prices. At a recent meeting of international donors for the fisheries sector. ishery Minister 2a Fuang )goc said that *ietnam #ould need around *)D =.>>3 bill in the coming time to de,elop the sector3.

43'

P!oblem t"tement

:ecently. *ietnamese go,ernment targets to raise the total output and export ,alue of fisheries industry to 3 mill tones and -"D 3.@ bill. respecti,ely. in year 34>4 =. Due to the resources lac%ing and to sur,i,e in the competiti,e #orld it is necessitated to analy$e the fisheries industry distinctly and explore factors. #hich directly or indirectly influence the impro,ement of this sector. to formulate the long9term de,elopment strategy for this industry in *ietnam.

1 2

6inistry o% /rade =ietnam economic revie0@ 1,,, 3 !conomic )evelopment 6aga'ine@ 20004 pp. 1

43+

Ob5ect26e

>. 2o describe current performance of *ietnamese fisheries industry 3. 2o identify the structure and characteristics of internal lin%ages in the fisheries industry =. 2o analy$e and determine strengths and #ea%nesses of the fisheries industry. ?. 2o identify the barriers for de,elopment of *ietnamese fisheries industry @. 2o formulate a de,elopment strategy for future de,elopment and impro,ement of the fisheries industry in *ietnam.

437

A00!o"c/ to t/e t1d8

2on9 the mission of this research is to de,elop the fisheries industry in *ietnam.

>. M2

3. Go"l ett2ng9 to formulate a de,elopment strategy =. G"t/e!2ng 2n:o!m"t2on9 primary data #ere gathered by unstructured inter,ie# #ith fishing company. middle man. technical and academic institutes. related go,ernment agencies and departments. "econdary data #ere gleaned by re,ie#ing rele,ant texts. go,ernment reports and publications. ?. D"t" "n"l8 2 9 before going to formulate the strategic plan. it is important to understand the fishery business en,ironment and this #as done #ith the help of +orterEs concept and "!72 analysis. @. Fo!m1l"t2on o: t!"teg2c 0l"n9 after data analysis and data interpretation. a suggested strategic plan is formulated.

43(

E;0ected cont!2b1t2on

1t is hoped that the research #ill be beneficial for the policy9ma%ers as #ell as for fishery business entities. 1t may also ser,e as a stimulus to boost the fisheries in the global mar%et.

43-

Sco0e o: t/e t1d8

2his study is confined at national le,el for o,erall de,elopment of the fisheries industry in *ietnam. 2he research geographically describes the fisheries industry and focus on industrial lin%age analysis. #hich can support the industry strategic formulation.

43<

O!g"n2="t2on o: t/e !e e"!c/

2he research consist of six chapters. #hich is further described as follo#G #/"0te! '9 1ntroduction chapter

#/"0te! +9 2his chapter is a re,ie# of literature particularly on the concept of strategic planning and the en,ironment of fisheries industry. #/"0te! 79 chapter = describes the performance and distribution of *ietnamese fisheries industry. and aims at understanding the de,elopment of factors #hich directly and indirectly supplements the performance of the fisheries industry in *ietnam. #/"0te! (9 1ndustry analysis bases on the existing data #ith help of +orterEs concept. "!72 matrix and cluster concept. #/"0te! -9 2his chapter is formulating a strategic plan and recommendation. #hich aims at de,eloping and impro,ing the fisheries industry in *ietnam. #/"0te! <9 Conclusion chapter F2g1!e '3 '9 F!"mewo!k o: t/e !e e"!c/

Problem identi%y

Objectives o% research

1esearch methodology

:iterature revie0

)ata gathering

)ata analysis

+ompetitive advantage 7$trengths and 0eaknesses.

!"ternal environment 7Opportunities A threats.

)evelopment strategy

3indings and recommendations 3

#/"0te! +

L2te!"t1!e Re62ew
2his chapter dues #ith the theory foundation. #hich concern on the strategic de,elopment. 1t is started #ith definition of strategic management and narro# do#n to the scope of study that focuses on strategic formulation stage. A number of industry analysis techniques #ill be examined to support the strategic formulation acti,ities.

43,

St!"teg2c m"n"gement 0!oce

43,3' De:2n2t2on o: t!"teg8

"tarting from its military root. strategy. e,er considered as Hthe science of planning and directing military operationsI. is not a ne# term. Ho#e,er. applications of this concept into business area is a brea%through idea too% place in the later half of this century. 1n the decades of >;C4s and >;D4s. most management definitions of strategy by many authors #ere emphasi$ed on the planning them as an important component. Alfred Chandler has defined strategy as H the determination of the basic long term goals and ob8ecti,es of a enterprise. and the adoption of course of action and the allocation of resources necessary for carrying out these goalsI. 2he main idea in ChandlerEs definition is that strategy in,ol,es a rational planning process. 2he organi$ation is depicted as choosing its goals. identifying courses of action &or strategy' that best enable it to achie,e its goals. and allocating resources accordingly. "imilarly. Fuinn defined strategy as H the pattern or plan that integrates an organi$ationEs ma8or goals. policies and action sequences into a cohesi,e #holeI. inally. /luec% defined strategy as Ha unified. comprehensi,e and integrated plan designed to ensure that the basic ob8ecti,es of enterprises are achie,edI. &Hill0Jones.>;A;' Ho#e,er. definitions of strategy based on planning ha,e been critici$ed. Hill and Jones indicated a ne# approach based on Henry Mint$bergEs definition of strategy as Ha pattern in a stream of decisions or actionI &Hill and Jones. >;A;'. the pattern being a product of #hate,er intended &planned' strategies are actually reali$ed and of any emergent &unplanned' strategies. Mint$bergEs concept of strategy suggests that strategy in,ol,es more than 8ust planning a course of action 1n the decades of >;A4s and >;;4s. H strategyI becomes more and more essential in business domain. 2hereby. the concept of strategy has recei,ed a great attention by ,arious authors Hax and Ma8luf &>;;>'pointed out that strategy can be seen as a multidimensional concept that in,ol,es all the critical acti,ities of the firm. pro,iding it #ith a sense unity. direction and purpose as #ell as facilitating the necessary change caused by its en,ironment &/luec%0Janch. >;AC'. Johnson and "chole &>;;=' ha,e stated the nature of corporate strategy by the characteristics usually associated #ith the #ord IstrategyI or Hstrategy decisionI

1n summary. according to them. strategy is a unified. comprehensi,e and integrated plan that relates the strategic ad,antages of the firm to the challenges of the en,ironment and that is designed to ensure that the basic ob8ecti,es of the enterprises are achie,ed through proper execution by the organi$ation &/luec%0Janch.>;AC' 2he concept of strategy has become one of e,eryday #ords of managers during the past 34 years and the practice of strategic planning is no# #idespread among large and medium si$ed companies. 2his interest in strategy #as caused by gro#ing reali$ation that the companyE s en,ironment has become progressi,ely changeable and discontinuous from the past and that as a result. ob8ecti,es alone are insufficient as decisions rules for guiding the companyEs strategic reorientation as it adapts to changing challenges. threats and opportunities.

'3'3' P!oce

o: t!"teg2c m"n"gement

"trategic management is a stream of decisions and actions that leads to the de,elopment of an effecti,e strategy or strategies to help achie,e corporate ob8ecti,es. 2he strategic management process is the #ay in #hich strategists determine ob8ecti,es and ma%e strategic decisions. Ho#e,er. strategic management is not simply the management of the process of strategic decision ma%ing. According to Cha%r,arthy &>;AC'. strategic management is the process through #hich managers ensure the long9term adaptation of their firm to its en,ironment. 1t should be also emphasi$ed that strategic management process is continuous 6 it ne,er really stops #ithin the organi$ation. Certo and +eter &>;;4' defined strategic management as Ha continuous. integrati,e process aimed at %eeping an organi$ation as a #hole appropriately matched to its en,ironmentI 2he process of strategic management in,ol,es three basic stagesG &>' strategy formulation. &3' strategy implementation. and &=' e,aluation and control. Based on context of this study. ho#e,er. the focus #ill be on the strategy formulation process St!"teg8 :o!m1l"t2on is often referred to as strategic planning or long range planning. :egardless of the long term used. the process is primarily analytical. not action oriented. As sho#n in the "trategic Management Model. the formulation process is concerned #ith de,eloping a corporationEs mission. ob8ecti,es. strategy and policies. 1n order to do this. corporate strategy ma%ers must scan both the external and internal en,ironments for needed information on strategic factors. !heelen and Hunger &>;;A' detailed the first six steps commonly found in strategy formulation are a series of interrelated acti,itiesG >. E,aluation ofG 2he corporationEs current performance results in terms of return on in,estment. profitability and so on 2he corporationEs current mission. ob8ecti,es. strategies and policies

3. Examination and e,aluation of the corporationEs strategic managers9 board of directors and top management =. "canning of external en,ironment to locate strategic opportunities and threats

?. "canning of internal corporate en,ironment to determine strategic strengths and #ea%nesses @. Analysis of the strategic factors from step = and ? to +inpoint problem areas. and :e,ie# and re,ise the corporate mission and ob8ecti,es as necessary

C. /eneration. e,aluation and selection of the best alternati,e strategy appropriate to the analysis conducted in step @ Ho#e,er. the abo,e strategy formulation process can be di,ided into 3 stages. as illustrated in the figure 3.3 2he first stage is the situation analysis. Beginning #ith an e,aluation of current performance and ending #ith the re,ie# and possible re,ision of mission and ob8ecti,es. this stage includes step > through step @ 2he second stage is the process of generation. e,aluation and selection of the best alternati,e strategy. 2his stage is step C 1n order to construct an appropriate competiti,e strategy. a IpictureI of the competiti,e en,ironment is al#ays a useful basic. 1n other #ords. there is clearly a need for competiti,e en,ironment analysis. an industry structure analysis.

&

F2g1!e +3 '9 t!"teg8 :o!m1l"t2on 0!oce

SITUATION ANALYSIS "can external En,ironment 7pportunities 2hreats

E,aluate current perform9 ance result

Examine K e,aluate the current Mission 7b8ecti,e "trategy +olicies

E,aluate strategic manager s

Analy$e competiti,e en,ironment Entry Buyers "uppliers "ubstitutes

Analy$e strategic factors in light of current situation

De,elopG Mission 7b8ecti,es

+ompetitors

"can internal En,ironment

"trengths !ea%nesses

(Source: Wheelen / Hunger, 1998)

GENERATION, EVALUATION, AND SELECTION OF THE BEST STRATEGY

43*

#once0t o: 2nd1 t!8 en62!onment

7rgani$ation can be considered as ecological entities and ,ie#ed as though they are organisms that form mutual relationship #ith their en,ironment. An organi$ationEs ability to cope #ith a changing en,ironment is probably the most important determinants of its success or failure in a free mar%et system. 2he en,ironment #here a firm exists can be classified into t#o typesG internal en,ironment and external en,ironment. According to !heelen &>;AD'. internal en,ironment consists of ,ariables that can influence the firmEs success through the strategic factors of the firm itself. 2he ,ariables are strengths and #ea%ness of the firm and it can be anticipated through the firmEs structure. culture and resources &figure 3.='

F2g1!e +3 +9 6"!2"ble o: 2nd1 t!8 en62!onment

!conomic !conomic 3actors 3actors

$O+-A: !2=-1O26!2/ 7!"ternal.

Political Political 3actors 3actors

/A$C !2=-1O26!2/ 7!"ternal. $takeholder CORE ENVIRONMENT 7-nternal. ?overnment $tructure +ulture $uppliers

+ustomers

1esources $pecial -nterest ?roup +reditors $ocial $ocial 3actors 3actors /echnological /echnological 3actors 3actors !mployeeB :abor 8nion

Source: Wheelen (1987)

External en,ironment consists of ,ariables that can influence the firmEs success by elements outside the firm. 2he ,ariables are opportunities and threats. #hich come from elements or

groups that directly affect the firmEs ma8or operation such as stoc%holders. go,ernment. customers and suppliers. 2he social en,ironment includes more general forces. #hich do not directly affect the short9run acti,ities of the organi$ation but often influence its long9run decision such as economic. socio9culture. technological and political9legal forces. Each of these en,ironments may ha,e a distinct influence on decision ma%ing and organi$ational action &Hanbric%. >;A>L Bro#n and -tterbac%. >;A@L cited from Elen%o,. >;;D' "ince there are many factors that need to be analy$ed. the executi,e must be selecti,e and concentrate on those factors. #hich are critical for the enterprise. urthermore. it is not enough for the strategist to assess only the present en,ironment. +lanning for the future is ,ery much concerned #ith the more distant future. 1n considering the factors affect on a firmEs business en,ironment. Boulton &>;A?' mentioned the ,ariety of social. political. economic. and technological forces &figure 3.?'. F2g1!e +3 79 F"cto! In:l1enc2ng t/e #om0et2t26e &1 2ne En62!onment

Tec!nolo"ical Forces

Social Forces
1a0 6aterial $ocial !"pectation $ocial 2orms $ocial Attitudes !cological +oncern

2e0 /echnology THE COMPETITIVE BUSINESS ENVIRONMENT

9ealth A $a%ety

Poli#ical Forces

Productivity

1egulatory +ontrols

+apital

Admin. +ontrol

$aving 1ate

!mploy> ment

)emo> graphic

-n%lation 1ate

2ational !conomy

"ourcesG Boulton &>;A?'

Econo ic Forces

Boulton had noted some of the social factors that affect business relate to the expectations. norms. and attitudes of the communities in #hich business #ere operated. +olitical and legal factors that de,elop out of social concerns include ecological legislation. health and safety regulations. and the resulting concerns o,er too many regulatory and administrati,e controls.

Economic issues include a gro#ing concern o,er national economic policies. inflation rates. demographic changes. and employment le,els and sa,ing rates. 2echnological forces also playing an increasing role in competition as a result of materials shortages. need for producti,ity impro,ements. plant moderni$ation. and increased in,estment in research and de,elopment. 2he gro#ing impact of these issues on business ma%es it difficult to consider them independently. or e,en to set priorities as to their important.

43.

Ind1 t!8 "n"l8 2

1n the preface to his classic #or%. Competitive Strategy, Michael +orter argued that the field of business strategy lac%ed an analytical base and contained fe# generali$able or robust insights. He also noted that economists. #hose #or% on industry and competition might ser,e as the basic for the de,elopment of such insights. +orterEs boo% pro,ide an important illustration of ho# economic reasoning can inform and de,elop useful insight for practicing managers. particularly #ith regard to strategies for dealing #ith a firmEs external en,ironment. "ince the publication of +orterEs #or% researchers in economics and strategic management ha,e made significant strides in de,eloping an understanding of both the external mar%et en,ironment of firms and their internal organi$ation.

'3'3+ St!1ct1!"l dete!m2n"nt o: 2nd1 t!8 de6elo0ment

Although the roofs of the economics of industry and mar%et competition field can be traced to the >;=4s or earlier. they had little impact on business strategy until Micheal +orter publish a series of articles in the >;D4s that cumulated in his pathbrea%ing competitive Strategy. 1n this boo%. +orter presents a con,enient frame#or% for exploring the economic factors that affect the profits of an industry. +orterEs main inno,ation is the classification of these factors into fi,e ma8or forces. A fi,e9force analysis systematically and comprehensi,ely applies economic tools to analy$e an industry in depth. 2his model can use #idely in any industry to facilitate the formulating strategies to gain competiti,e ad,antage. 2he fi,e forces model originated from #or% by +orter &>;;D'. as sho#n in the figure 3.@. 2his model focuses on fi,e forces that shape competition #ithin an industryG &>' the threat of ne# entry by potential competitorsL &3' the degree of ri,alry among established companies #ithin an industryL &=' the bargaining po#er of buyerL &?' the bargaining po#er of suppliers and &@' the threat of substitute products. 2his model can be used for positioning an organi$ation in relation to mar%et forces particularly through exploiting industry changes &+orter. >;D;L cited from Betts and 7fori. >;;?'

10

F2g1!e +3 (9 T/e Porter :26e :o!ce model

/hreat o% entry by potential competitors

Bargaining po0er o% buyers

1ivalry among established company

/hreat o% substitute products

Bargaining po0er o% suppliers

"ourceG Porter 1979 (cite rom Hill an! "one#, 1998)

+orter suggested that the strength of these forces is the threat in the ability of the companies to raise prices and earn profits. 1n contrast. the #ea%ness of these forces can be ,ie#ed as an opportunity for the companies to earn greater profits. 2he strength of the fi,e forces may change through time as industry change. 2he tas% of managers is to understand ho# change of these forces generates ne# opportunities and threats an formulate appropriate strategies a' 2hreat of ne# entry

+otential competitors are the companies that are not currently operate in the industry but ha,e capability to entry into the competition in the industry. 2hreats of ne# entrants can effect the profitability of established companies. 2he degree of potential competitors to entry the industry is depends on the barriers to entry. 2hese barriers are band loyalty. absolute cost ad,antage. economic of scale and go,ernment regulation. High barriers to entry ma%e potential competitor difficulty entry the industry since it ma%es costly for them to establish ne# companies and sur,i,e in high competition Brand loyalty is the preference of buyers in the products of the established companies. 2he established companies can create band loyalty through continuous products quality. good after9sale ser,ices. product inno,ation and price ad,antage.

11

Absolute cost ad,antage is the established companies in the cost of production due to past experience. patents. s%ill in management of materials and equipment and access to loan the money Economic of scale is the cost ad,antage that rele,ant #ith large company si$e. 2he large companies ha,e capability to dominate the price of products in the industry due to cost reductions gained through mass producing a standard out put. the ad,antage gained by spreading fixed costs o,er a large production ,olume. and larger ,olume of purchase ra# materials /o,ernment regulation is the policies that establish to protect some established companies and buyers such as patents. la# of consumerEs protection and la# of en,ironmentEs protection :i,alry among established companies

b'

Established companies are the companies that currently compete in the industry. High competition lead to threat in profitability of established companies. Mean#hile. lo# competition is the opportunity for the companies to raise prices and greater profits. 2he extent of ri,alry among established companies #ithin industry is largely a function of three factorsG the industryEs competiti,e structure. demand conditions and the height of exit barriers in the industry. Competiti,e structure refers to the number and si$e distribution of companies in an industry. "tructures ,ary from fragmented to consolidated and ha,e different influence for ri,alry. 2he fragmented industry consists of many small and medium 9si$e enterprises but non of them dominate the industry. 2his type of industry is identified as lo# barriers of entry and hard to differentiate the products. Many companies in the industry may lead the price #ar because typical products and ser,ices may conduct buyers to interest in lo# priceL consequently many companies ha,e to cut prices to maintain their mar%et share. 2his is the threat for profitability among ri,alry. 2he consolidated industry is dominated by a small number of large companies that are independent. 2he competiti,e acti,ities of one company effect the operation of others. 2he e,ent that pushing profits do#n is. if one company reduces prices of products. others can not stabili$e their prices to earn greater profits. 2he ad,antage of this industry is. if there is agreement among ri,alry to raise prices and earn more profits. 2his is disad,antage for buyers. Demand conditions are another factor of intensity of ri,alry. /ro#ing demand tends to reduce ri,alry since all companies can sell more and earn greater profits. Con,ersely. declining demand causes decrease in buying po#er and more ri,alry as companiesE fight to maintain re,enues and mar%et share. Exit barriers are the factors that %eep companies in the industry e,en #hen return are lo#. Causes of these barriers depend on economy. strategy and emotion of companies. 1n economic factor. companies may in,est in plant and equipment that ha,e no alternati,e uses and can not be sold offL it is not #orth#hile for them to lea,e the industry. 1n strategic factor. companies only need to sur,i,e under crisis condition in order to #ait for next booming of the industry that earn them continuously.

12

c'

2he bargaining po#er of buyer

Buyers affect the competition #hen they are in the position to force do#n prices. demand better ser,ice and bargain higher quality. Buyers can influence the competition by their po#er to bargain #ith the companies. 2he circumstances that buyers are most po#erful includeG d' Lo# demand from buyers that allo# them to dominate supplier Buyers purchase large quantity. they can bargain for price reduction High supply from companies so buyers ha,e se,eral choices to purchase !hen suppliers depend on the buyers for large percentage of their total orders Buyers ha,e capability to produce the products themsel,es 2he bargaining po#er of suppliers

"uppliers affect the competition #hen they are able to force up prices. reduce the quality and ser,ice of the input they supply. As #ith buyers. suppliers can influence the competition by their po#er to bargain #ith companies. 2he circumstances that suppliers are most po#erful includeG !hen there is small group of them sell the product to many companies !hen there are no competiti,e products !hen their products are differentiated that it is costly for a company to s#itch from one supplier to another !hen the companyEs industry is not an important customer of them. 2hey can ha,e little incenti,e to reduce prices or impro,e quality 2he threat of substitute products

e'

"ubstitute products are the products that can ser,e the similar ser,ice or quality. 2hreat of them can conduct companies to limit prices and earn greater profits. 1f substitutes are #ea%. such as high prices or quality is not meet consumersE requirement. it is opportunity for companies to raise prices and earn more additional profits. Among the fi,e forces. Besan%o et al$&>;;C' mentioned internal ri,alry as the central factor because it may be affected by each of the other forces. He also pointed out se,eral limitations of this frame#or%. %ir#t, it i# not e#pecially concern &ith the magnitu!e or gro&th o !eman!$ 'he rame&or( a##ume# that !eman! i# #u iciently large or irm# to )e pro ita)le un!er the mo#t avora)le competitive con!ition#$

13

'he #econ!, rame&or( !oe# not e*plicitly account or the role o the government, e*cept &hen the government i# the #upplier or )uyer$ 'he government a# regulator can pro oun!ly a ect in!u#try pro ita)ility, an! coul! )e con#i!ere! a #i*th orce$ 'he thir!, the ive+ orce# analy#i# i# ,ualitative$ %or e*ample, an analy#i# o in!u#try #tructure may #ugge#t that the threat o entry i# high, )ut the rame&or( provi!e# little gui!ance a)out ho& to e#timate the pro)a)ility o entry$ -ecau#e thi# i# ,ualitative, the rame&or( i# e#pecially u#e ul or a##e##ing tren!# . that i#, or !etermining &hether in!u#try pro ita)ility i# li(ely to increa#e or !ecrea#e$

'3'37 N"t2on"l dete!m2n"nt o: 2nd1 t!8 de6elo0ment

Many discussions. debates. and #riting are made to explain the national competiti,eness. More recently. the re,ie# has gained fa,or that competiti,eness is dri,en by go,ernment policy. 2he best and suitable concept of conflicting at the national le,el is producti,ity &+orter. >;;4'. +roducti,ity is the prime determinant of a nationEs long run standard of li,ing. )o nation can be competiti,e in all aspects. 2he idea is to assemble the nationEs limited pool of human and other resources into the best producti,e #ay. He argues that competition ad,antage originates in the local en,ironment in #hich the firm is based. 2his conclusion is based on the detailed case studies of numerous industries that appeared in his boo% 2he Competiti,e Ad,antage of )ations. Li%e nelson and !inter. +orter ,ie#s competition as part of an e,olution process. irms initially gain competiti,e ad,antages by altering the basic of competition. 2hey do so not 8ust by recogni$ing the existence of ne# mar%ets or technologies but by mo,ing aggressi,ely to exploit these opportunities. 2hey sustain their ad,antages by in,esting to impro,e existing sources of ad,antage and to create ne# ones. A firmEs home nation plays a critical role in shaping managerEs perception about the opportunities that can be exploitedL in supporting the accumulation of ,aluable resources and capabilitiesL and in creating pressures on the firm to inno,ate. in,est and impro,e o,er time. According to +orter. >;;>. there are four basic attributes or determinants at national le,el that affect the industry de,elopment. 2hey areG factor of conditions. demand conditions. related and supporting industries and firm strategy. structure and ri,alry &figure 3.C'.

F2g1!e +3 -9 Dete!m2n"nt o: n"t2on"l com0et2t26ene

Chance

Fir #ra#e"% s#r&c#&re an$ ri'alr%

Fac#or con$i#ions

De an$ con$i#ions

Rela#e$ an$ s&(o(or#in" in$&s#ries

Government

"ourcesG Porter(1991) a' actor conditions

2he principle from "mith and :icado &Classical economics' stated that a nationEs factors of production. labor. land. natural resources. capital. infrastructure #ill determine the flo# of trade by exporting those goods that ma%e most use of the factors #hich it is relati,ely #ell endo#ed. But in the sophisticated industries that form the bac%bone of any ad,anced economy. a nation doesnEt inherit but instead creates the most important factors of production b' Demand conditions

)ations gain competiti,e ad,antages in industries #here the home demand gi,es their companies a clearer or earlier picture of emerging buyer needs and achie,e more than their foreign ri,als. Also the larger the mar%et segments in a nation. #hich recei,es the most attention from the nationEs companies. helps to build competiti,e ad,antage.

1#

c'

:elated and supporting industries

An industry segment can gain benefit through association indirectly #ith an ad,antageous industry segment that is upstream or do#nstream and contributory to the en,ironment. 2he presence of internationally successful related industry in a nation pro,ides opportunities for information flo# and technical interchange. #hich can speed the rate of inno,ation and upgrading d' irm strategy. structure and ri,alry

2hese characteristics include strategies. structures. goals. managerial practices. indi,idual attitudes. and intensity of ri,alry #ithin the business sector. Also the competition bet#een domestic firms is more emoti,e and personal. and they re,eal compete from a common national platform. so they ri,alry tends to be more intense than #ith foreign competitors. Hence. domestic ri,alry is particularly effecti,e in promoting the upgrading of competiti,e ad,antage 2here are another t#o ,ariables that also influence the national system. 2hose are chance and go,ernment. Chance e,ents occur in the condition outside the po#er of firms. as #ars. external political de,elopments and pure in,entions. 2hese are also important since they create discontinuities that shift competiti,e position in an industry. /o,ernment can influence and be influenced by each of the four determinants. either positi,ely or negati,ely. /o,ernment has a direct dominion on national industries through its policies and regulations.

'3'3( S%OT "n"l8 2

"!72 is an acronym for a firmEs %ey internal strengths and #ea%nesses and external 7pportunity and 2hreats. 1t is one of the most popular techniques for conducting situational analysis attempting to find a strategic fit bet#een external opportunities and internal strengths #hile ta%ing care of external threats and internal #ea%nesses. 1t is helpful in identifying firmEs distincti,e competence in terms of particular s%ills and resources possessed by the firm and better #ay of utili$ing them. 2he technique pro,ides simple and systematic #ay of identifying the relationship bet#een the factors on #hich strategic are based !eihrich &>;A3' proposed se,en steps procedure for the analysis. 2hey are as follo#sG +repare an enterprise profileG the %ind of business. geographic domain. competiti,e situation. top management orientation identify and e,aluate the follo#ing factorsG economic. social. political. demographic. products and technology and mar%et and competition prepare a forecast. ma%e predictions and assessment of the future prepare a strength9#ea%ness audit inG management and organi$ationL operationsL financeL mar%eting and others de,elop alternati,es and ma%e strategic choice

1&

He classified the o,erall factors go,erning the firmEs strategy into t#o ma8or groups namely the external en,ironment and the internal en,ironment. External en,ironment has been further categori$ed as economic. social. political and demographic factors. products and ser,ices. technology. mar%et and competition that gi,e rise to the opportunity and threat to the firm. "imilarly. internal en,ironment #hich is responsible for the strength and #ea%ness of the firm. #as classified as management and organi$ation. operations. finance. mar%eting and others 1n the 3x3 matrix sho#n in the table 3.>. four conceptually distinct alternati,e strategies can be obser,ed. 2hey are #ea%ness9threat &!2' strategy. #ea%ness9opportunity &!7' strategy. strength9 threat &"2' strategy and strength 6opportunity &"7' strategy

T"ble +3 '9 S%OT > t!engt/? we"kne

? o00o!t1n2t8 "nd t/!e"t@ m"t!2; %e"kne e >%@

-nternal St!engt/ >S@ 3actors !"ternal 3actors

List of @9>4 internal strengths here

List of @9>4 internal #ea%nesses here

O00o!t1n2t2e >O@ List of @9>4 external opportunities here T/!e"t >T@

SO t!"teg2e /enerate strategies here that use strengths to ta%e ad,antage of opportunities ST t!"teg2e /enerate strategies here that use strengths to ta%e ad,antage of opportunities

%O t!"teg2e /enerate strategies here that use strengths to ta%e ad,antage of opportunities %T t!"teg2e /enerate strategies here that use strengths to ta%e ad,antage of opportunities

List of @9>4 external opportunities here

Source: Wheelen an! Hunger (199/)

1(

#/"0te! 7

Ind1 t!8 c/"!"cte!2 t2c "nd oc2o ) econom2c t"t1 o: :2 /e!2e 2nd1 t!8

2his chapter is aimed at descript *ietnamese fisheries industry characteristic as #ell socio9 economic status of this industry such asG regional distribution of fisheries demography #or%forces. income structure capital structure economic structure training and education incenti,e program health care system

43'4 O!g"n2="t2on "nd m"n"gement 43'43' M2n2 t!8 o: :2 /e!2e >MoF@

:elying on the established /eneral of Department of isheries in >;C4. later in >;DC the Ministry of Marine +roducts that #as set up. #as changed to Ministry of fisheries in >;DA. 1t co,ered fields ofG capture fisheries. aquaculture. preser,ation and de,elopment of fisheries resources and fishing ,essel registration. fisheries processing and import9export. international economic and technical cooperation and in,estment. inspection of production an hygiene standards. quality control. training fisheries scientists. technicians. managers. #or%ers. captains and operators. scientific and applied research on fisheries production. 2he administrati,e system of the M7 consists of ; departments as follo#sG +lanning and in,estment department. inance and accounting department. "cience and technology department. 1nternational co9operation department. isheries management department. +ersonnel and labor department. Department of resources preser,ation. 1nspectorsE section. Administration office of the Ministry.

43'43+ St"te o!g"n2="t2on

2here are t#o organi$ation le,elsG pro,ince and district. At pro,ince le,el. +eopleEs Committees &+C' of pro,inces are the administrati,e authorities to implement the fisheries MinistryEs policies and regulations. +Cs can ma%e resolutions. decisions. standard and quotas on fisheries #ithin the pro,inces. but not in conflict #ith the regulations of the Ministry. Ho#e,er. at district le,el. +ro,inces are not permitted to set up official fisheries offices. isheries units are often combined #ith others to form district agriculture department or district forestry9fisheries department. And pro,incial and local departments ha,e to self9 finance their acti,ities through local budgets or research contract.

43'437 Un26e! 2t2e

-ni,ersities and research centers implement an important role in supporting to the aquaculture de,elopment. 2here are four uni,ersities o,er the countryG -ni,ersity of Aquaculture )o.> . -ni,ersity of isheries. )ha 2rang. -ni,ersity of Agriculture and orestry. and -ni,ersity of Can 2ho. Besides teaching acti,ities. a number of Aquaculture :esearch

1*

Centers that #ere set up by uni,ersities undertoo% the research pro8ects on coastal aquaculture and coastal resource management.

43'43( Re e"!c/ In t2t1te

:esearch institutesE acti,ities focused on #ide range of research on en,ironment. aquaculture techniques. products processing and preser,ation. training fisheries technicians and transfer of aquaculture technologies to fish farmers. Currently. there are four research institutesG :esearch 1nstitute for Agriculture )o.>. )o.3 )o.= located in Habac pro,ince. HCMC and )ha 2rang. and :esearch 1nstitute for Marine +roducts &:1M+' in Hai +hong.

43'43- Ot/e! 2n t2t1t2on "nd "genc2e

"ome other institutes and agencies are in,ol,ed in research related to aquaculture areG Center for )atural :esources and En,ironment "tudy &C:E"' under the )ational -ni,ersity of *ietnam &)-'. the "ub9 institute for orestry "ciences in "outh *ietnam. )ha 2rang 1nstitute of 7ceanography. Hai +hong "ub91nstitute of 7ceanography. the "ub91nstitute of Ecology of biological :esources of Ho Chi Minh City

43'43< E;ten 2on e!62ce

+resent extension acti,ities are run by different agencies using different system and approach. 2he department of fisheries resources management &D :M' of the M7 is responsible for the o,erall de,elopment and monitoring of the extension acti,ities throughout the country 1n >;;?. 3? out of 3D coastal and 3= out of 3C inland pro,inces in the country established their fisheries extension centers. 2he extension centers operate under the pro,incial fisheries departments. *irtually no institutional extension is underta%en at the district of commune le,el. "ome research institutes and )/7" also underta%e farm le,el extension but not a le,el sufficient to ha,e a ma8or impact on de,elopment. 2here is a lac% of coordination in extension During the late >;;? and early >;;@. about D@4 training courses &39= days each' ha,e been organi$ed national #ide. ?>4 extension officers and about ?3.444 aquaculturists0 fisherman had recei,ed training. 7,er the same period >>? demonstration farms had been set up 2he total budget allocated by the central go,ernment in support of the ECs and extension acti,ities amounted to approximately *)D ?.@ billion co,ering the period from august >;;? to all of >;;@. 1n the first C months of >;;C about 4.;@ bill has been disbursed 2he main extension approaches are the use of short training courses demonstration farms. site ,isits and study tours for ad,anced farmers and commune leaders. and radio broadcasting. technical boo%lets and ,ideo films At present. ECs are facing problems of inadequate budget. lac% of trainers and training and extension facilities and equipment

1,

43'' Reg2on"l d2 t!2b1t2on o: :2 /e!2e

ishery industry is classified into se,en biological economic regions and their productions as in the appendix =.>

43''3' Red !26e! delt"

2his area is limited by 3=.3C4 square %ilometers &D.=< square of o,er all'. Ho#e,er. the population is density at D33 people0 %m3 in >;;@. increasingly in D?A people0%m3 in >;;A. According to the statistic. its production contribution to the fishery industry is lo#est though in >;;A its gro#th rate increased >?>< in comparing to >;;@. 2he output in >;;@ #as ;D.@;4 tons accounting for C.;?< o,erall &landing ?3.344 tons and gro#ing @@.=;4 tons'. equals to @.; %g production per capital per year. #hile the a,erage #as >?.D %g0person0year. 1n >;;A. #ith >=D.;>C tons production. its contribution #as still A.3=< to the industry. 2he export in >;;@ #as only -"D>D.?@ mil. about =.@< compare #ith the local exportation. 1f encompassing state o#ned enterprisesE export in the area. the export ,alue #as -"D 3C mil excluding illegal and unofficial exporting. Ho#e,er. increasing to -"D ?>.4@4 mil in >;;A. nearly t#ice and half of one in >;;@ is the milestone for regional rapid gro#th. 1n the :ed :i,er delta. Hai +hong and Fuang )inh are considered as central areas and Hanoi is the ma8or domestic mar%et #ith =.@ mil of resident excluding foreigners and tourists and a trading place.

43''3+ No!t/e!n Mo1nt"2n

2his region includes six pro,inces from 2hanh Hoa to 2hua 2hien Hue .Annually. its production is lo#er than the a,erage. 1n >;;@. it reached only >>4.>@4 tons occupied D.A< of the industry &in #hich AC.D@4 landing tons and gro#ing 3=.?44 tons' and ;.@ %g0capital. 2hough the gro#th #as >>C< in >;;A o,er in >;;@ &increasing from >>4.>@4 to >3A.=D4 tons'. its contribution #as decreased to D.CC< 1n paralleling #ith the production situation in the >;;@9>;;A period. exporting gro#th rate reduced from @.;A< to ?.??< though its ,alue increased from 3;.A mil to -"D ==.C mil. 2herefore. its gro#ing is lo#er in comparing #ith the :ed :i,er delta. 2hanh Hoa. )ghe An and 2hua 2hien Hue are central places of the region

43''37 So1t/ cent!"l co" t

!ith A pro,inces from Fuang )am9 Da )ang to Binh 2huan. the producti,ity of this area is highly increased. 1t produced 3;A.>;A tons accounting for 3>.3< o,er industry in >;;@. !ith the gro#th rate >>D<. in >;;A. the producti,ity increased to =?;.=3= tons. Exporting in >;;@ #as -"D A@.D?D mil excluding the state o#n enterprises. But in >;;A. this figure #as gro#n rapidly to -"D >3D mil. equally to >@4< in compare to >;;@. Centers of the region are Da )ang. (hanh Hoa and Binh 2huan.

43''3( So1t/e" t "!e"

2his region has C pro,inces including Ho Chi Minh City. 1t is lo# production as >=4.>C4 tons in >;;@ &;.3< of the industry' and mainly in landing. 2he a,erage #as A.D %g0people0year. 1n >;;A. though it gro#n >34<. its contribution to the industry #as still ;.=3<. Ho#e,er. it #as

20

the second exporter in >;;@ and the third in >;;A #ith its ,alue -"D >4?.444mil and AA.@@4 mil. Ba :ia *ung 2au and Ho Chi Minh City are t#o centers. Ho Chi Minh is the center of processing. consuming and exporting fishery. 1t is the big mar%et attracting sources of =44.444 tons annually from "outh#est &>@4.444 tons'. "outheast &C4.444 tons'. Middle "outh &@4.444 tons' and internal production. 1t is the processing and exporting center. 1n >;;@. there are ?C factories #ith 3?4 tons capacity0day. 1n #hich =4 factories are under the city management. >4 under the fishery ministry and the rest belonging to other industry. 1t exported -"D @A.A mil and in >;;A it reached -"D C=.@@ mil. 1t also produced fish sauce &>A mil litters' and fish po#der &D44 tons'. 2hough factories are located far from the ra# material sources. they are high producti,eness. Large la%es as Dau 2ieng. 2ri An and other small ones are gro#ing places in the region

43''3- Mekong R26e! Delt"

1t is including >3 pro,inces #ith =;.@@? %m3 square and ?=? people0%m3. 2his is the gro#ing center of country. 1ts contribution to the #hole industry is al#ays more than @4< in gro#ing as #ell as exporting. 1n >;;@ #ith D=A.=C> tons output &@3.?D<'. it exported -"D 3C>.?C; mil &@3.?@<'. By >DA< gro#th rate in >;;A. it produced AD3.C>@ tons and exported -"D ?CC.> million. (ien /iang. Ca Mau. Can 2ho and "oc 2rang are central points 1n summary. Me%ong :i,er Delta has sufficiency conditions for de,eloping in fishery including gro#ing. landing and processing in large scale. 1ts output is not only pro,iding to meet the internal demand. also the source of ra# material for processing and exporting

43''3< Mo1nt"2no1 "nd M2ddle /2g/ l"nd

1t is D;.=CD %m3 square including >= pro,inces. 1n >;;@. its population #as >4.A>3 mil people &>=.@<' and >=C people0%m3. 1t only produced 3>.;3A tons &>.@C<' and the a,erage #as >.A= %g0people. 1n >;;A. its output reduced to 3>.?4> tons. 2his area has large #ater area &C;< of the country' that is considered as strong aspect. Ho#e,er. it is existing difficulties as source of in,estment. production model and management.

43''3, #ent!"l /2g/l"nd

1ncluding ? pro,inces. it accounts for @@.@C; %m3. 1n >;;@. there #as 3.; mil of population #ith @3persons0 %m3. 2he output of region #as limited by @C44 tons accounting for .?< of the industry and the a,erage of >.; %g per capita. 1n >;;A. this figure decreased to ?C3? tons &.3A<'. 2his area is prospecti,e as north mountain0midland area #ith >>.C< #ater area

43'+ Demog!"0/8 43'+3' Po01l"t2on "nd 0o01l"t2on g!owt/

2hough the population in >;;A #as DC.? mil. it #ould be DA mil and >44mil by the year 3444 and in 34>4 #ith the gro#th rate is >.D< annually. ho#e,er. this rate is different bet#een

21

rural and urban areasL poor and misery people. 2his increasing results to high demand for necessities as foods and other social needs that required for the sur,i,al reason. ishery industry is responsible for contribution to the supplying for social demand in the future. *ietnam has 3; pro,inces and cities. #hose population #as about ?4 mil in >;;@. accounted for @>< of country. of #hich. =A< people li,e in >>C seaside districts and islands. Among them. D.>< people earn for li,ing by landing.

43'+3+ Age t!1ct1!e

1n *ietnam and fishing areas in particular. the age structure is young. 2he #or%ing age rate of population is @3<. 1n the fishery industry. the #or%ing age ranges from >C to C@. :elying on the sur,ey result in seaside districts. the rate o,er age of D4 accounted for @<. o,er C@ #as >>9>=<. from > to >?G =4 to ?4< and the rest #as @= to @; < age #or%ing.

43'+37 Se; t!1ct1!e

:atio of male0female is stable at ?A0@3 all o,er the country. 1n the seashore areas. this ratio is changing ,ice ,ersa @30?A male9female. !or% characteristics and nutrition are the reason of birth rate of son is higher in these regions.

43'+3( Ho1 e/old t!1ct1!e

According to the statistics in >;;?. the a,erage head count #as ?.DD and in the fisheries. it #as @.@. Ho#e,er. the sample sur,ey sho#ed that the head count in seaside area #as highest at C.@ to D but has been declining from >;;? up to no# &appendix =.3'

43'+3- Ag!2c1lt1!e "nd l262ng l"nd d2 t!2b1t2on

2he rate of gro#ing and li,ing land is in fluctuation in different areas &appendix =.?' By the custom of resident in three areas of the country. the a,erage of fisheries land in the "outh region is higher than in the )orth and Central regions. 2herefore. it is good condition for householdEs de,elopment.

43'7 %o!k:o!ce 43'73' #/"!"cte!2 t2c

1n >;AC. *ietnam #or% force in,ol,ed =4.= mil of people and this number increased to ?4.= mil in >;;@ #ith the gro#th rate of =.33<. 1n >;AC. #ith a,erage =< up in labor demand. there #ere 3D.? mil of #or%ers and the figure gro#n to =?.D mil in >;;C. 2here are ?4.= mil of people in the #or%ing age. of #hich =?.D mil ha,ing 8ob &AC<'. >.@ mil in studying &=.D<'. 3.> mil of house#i,es &=.D'. and about 3 mil of 8obless &@<'

22

43'73+ L"bo! 2n :2 /e!8 2nd1 t!8

According to the fishery statistics. there #ere >.4=;.444 people #or%ing in the field of landing. gro#ing and processing in >;;@. in #hich ?34.444 people are in landing. @C4.444 8ob are in gro#ing sector. and @;.444 are processing staffs 1n fact. the labor in fishery industry is increasing and total full time 8obs #ould be >.C mil in the period of >;;; to 34>4 excluding about @44 to D44 thousand of part time 8obs. 2herefore. the number of labor in the entire industry is about C mil people.

43'737 Fem"le l"bo!

Among ?4.= mil of #or% force. female #or%er is counted more than half. Ho#e,er. this rate is different in different industries. 1n the rural and seashore areas. female labor is a ma8or source in agriculture and fishery gro#ing &@4 to @@<'. particularly. in fishery industry. this rate is A4<. 1n the recent years. due to reducing benefits from sea sources. #omen ha,e to #or% in other fields.

43'( Income t!1ct1!e

2he householdsE income is ,ariable and di,ersified depending on the production conditions and accumulati,e rate of each household. 1ncome is relied on different sources &appendix ?.=' 2he rate of poor household decreased and middle and rich households increased by number of income sources. Besides. households that encompass fishing and other occupations. ha,e higher income than the purity fishing ones. As in the appendix =.@. the "outh householdsE income is ?4< higher than in the )orth. 2he poor and rich classification is a characteristic of the "outh :ich households are off seashore fishers or processors or ser,ices pro,iders or ship o#ner. middleman. Ho#e,er. small landing scale. hired #or%ing. many children. no sub9income and no self9 in,estment are poor householdsE characteristics. Moreo,er. they are usually ris%y in production because of nature conditions. diseases and pollution. 2here are many small landing scale households that their re,enues are not off set production costs and ,ice ,ersa. 1n the seaside rural areas. householdsE ma8or income source is from landing. gro#ing and agriculture. 2here is limited chance in other fields as officer. staff in different industries. 2hus it exists a trend of sub9 occupation

43'- #"02t"l t!1ct1!e

T"ble 73'9 So1!ce o: bo!!ow2ng mone8 2n ome m"2n !e0!e ent"t26e 0!o62nce 2n '..<

23

No3 >

Ind2c"to! )o. of households borro#ing +ercentage rom Ban%ers +ercentage rom pri,ate lenders +ercentage

Un2t Household < Household < Household < Mill *)D Mill *)D Mill *)D

No!t/e!n Reg2on @; ?D.3 ?; =;.3 == 3C.? @.C ?.> =.;

#ent!"l Reg2on ?A @@.3 >C >A.? ?4 ?C @.> 3.> @.3

So1t/e!n Reg2on ?C @@.D => =A.A 34 3@ >; 33.= ;.3

A,erage borro#ing amount Ban% +ri,ate

Source: 0ini#try o 1griculture an! 2ural 3evelopment 1n the table =.>. though in the )orth there #as only ?D.3< households are credited because of the montage. short maturity day. red tap and high rate loans from pri,ate sectors. most of them expected that they #ould recei,e the credit supporting from ban%s in order to de,elop. At present. capital from go,ernment is limited that only concentrated on the important infrastructure pro8ects as seaport. par%ing. transportation and other priority local pro8ects 2he foreign in,estment is focusing on the central pro8ects as upgrading processing factories. building up the seaports and demo ne# production model. 1n some areas. particularly in the "outh &Ben tre. Ba :ia9*ung 2au'. there are foreign supports from abroad relationships. 2he rest sources supply mainly for fishery operations. 7f #hich. o#nership capital is o,er @4< of total. the ban%ing credits satisfies =4< of requirement and pri,ate loans plays an important role in fishery acti,ities. 2hough there are the existing limitations in the pri,ate financial system as high rateG @9>4<0 month. unfair trading. 1n fact. this system is %no#n as one source for sur,i,ing situations as follo#ing reasonsG Loans are credited as ban% notes or goods &i.e. )ets. tools. ships or foods' depending on the clientsE demanding #ithout any documentaries As usual. the lender is the buyer And they %eep trac%s all production acti,ities and supply the need in time 2hey are flexible and dynamic in interest rate and pricing negotiation Household satisfies #ith this system since it is the best #ay for earning li,ing and selling its fished products. 2he /o,ernment should ha,e management plan to this system due to protect producer and control the system effecti,ely.

43'< Econom2c t!1ct1!e 43'<3' St"te Owned ecto!

/enerally. the state o#ned enterprisesE operations are not efficient. Before >;;4. fishery9 processing enterprises #ere profitable. rom >;;> up to no#. its effecti,eness #as declining. 2hough it counts for ;?.3< exporting ,alue. the profitable units are limited &3@< of total state enterprises'. =@< enterprises are unprofitable and the rest reach at brea%e,en point. 1n processing field. number of state enterprises are reducing. existing ones produce fish sauce effecti,ely.

43'<3+ #ollect26e ecto!

2hey did change their operating in ne# model organi$ation in the period from >;AD to >;;4. 1n the end of >;;C. there are only about A4 small9scale collecti,es in 3; cities and pro,inces. 1t is the trend of independent o#ner and production relying on collaboration.

43'<37 P!26"te ecto!

+ri,ate boat o#ner hired fisher basing on the benefit negotiation. 2he number of pri,ate o#ners has been increasing. And each o#ns about >4 fishing boats #orth billions of *)D. 1n gro#ing field. they lease land and #ater areas for building large production scale from 34Ha to hundreds of hectares. 2here are pri,ate enterprises in processing. 2hey in,est billions of *)D in setting processing factories. 2heir re,enues are fluctuating from >4 to =4 mil -"D in >;;D. 1n trading and ser,ices. they apply a dynamic mechanism that capitali$es on fishers then monopoly in buying and selling fishery landed. 2heir #or%ing capital is o,er billions of *)D and some of them build the processing factories and stores.

43'<3( Ho1 e/old ecto!

After contract out )o >4 and )o >44. de,elopment of households is an existing trend. especially in the fisheries. 2hey are fishing boat o#ners. labor #or%ers and large producers.

43'<3- Fo!e2gn ecto!

1n 8oin ,entures of landing. processing and gro#ing. its contribution for fishery industry is not much though itEs strengthen of capital and technology 43', TRAINING AND EDU#ATION Most of the fishers are not educated. >A< of them are not literate. C?< at primary school le,el. >D< at secondary and >< high school and uni,ersity le,el. 2he situation is caused by the financial constrains. fisherEs perception. and lac% of education and training infrastructure.

2#

43'* Incent26e 0!og!"m

At central le,el. fishery institute is responsible for organi$ing and controlling the program. Moreo,er. it collaborates #ith other institutes. uni,ersities. training centers and other media organi$ations for opening training sessions. building models. ad,ertising and so on. At local le,el. currently there are ?A of C> pro,inces and cities organi$ing and implementing the program.

43'. He"lt/ c"!e 8 tem

Higher rate of po,erty than other countries of the #orld causes *ietnamese health care directly in the case of nutrition ingredient. According Carl Bro Corp. sur,ey. rural area is ma8or diseases area #ith a,erage 3.@ diseases0people.

2&

#/"0te! (

F2 /e!8 2nd1 t!8 "n"l8 2

2his chapter is due to the industry analysis. Capture. aquaculture. processing and trading are the most important sub9sectors in fisheries industry. #hich #ill be deeply analy$ed to find out the pros and cons of the industry.

43+4 F2 /e!2e e;0lo2t"t2on 43+43' AA1"t2c !e o1!ce

2he total biomass of marine li,ing resources #ithin the #aters under *ietnamese 8urisdiction is estimated at bet#een =.4 and =.@ million tons. 2he har,estable limit from this biomass is estimated to be bet#een >.3 and >.? million tons per year. or about ?4< of the total biomass. About >D4 species. out of more than >.D44 recorded species of marine organism in *ietnamese #aters. are considered to be of commercial importance. About =4 species are of critical significance to the fisheries. "hrimp is. by ,alue. the most important commercial species. follo#ed by a ,ariety of cephalopods. scads. croa%ers. snappers. sardines. li$ard fish. 8ac%s. tuna. and flying fish. Assessments confirm that most of *ietnamese production from marine resources is caught in the coastal areas. #ithin @4 m depth contour &and most from #ithin a =4 m depth'. Data suggest that as much as ;A.D< of total marine fish production might originate from #ithin a @4 m depth as follo#sG T"ble (3 '9 E t2m"ted 0!od1ct2on b8 de0t/ =one? 2n '..( De0t/ =one Belo# 34 metes 3> 6 @4 metes @> 6 >44 metes 7,er >44 metes Tot"l Pe!cent"ge cont!2b1t2on to :2 /e!2e >B@ =C.; C>.A >.= 9 '44

4ote: 5#timate i# )a#e! on earlier &or( !one )y 0ini#try o %i#herie#$ 2he distribution of the fish production by depth sho#n abo,e is based on >;DC to >;AA catch data. and there might ha,e been some change since. 1t is. ho#e,er. ,ery unli%ely that changes are of statistical significance. 2he notable fact is that less than 3.4 < of the production come from #aters outside of @4 m depth contour. 2here is no e,idence to suggest that *ietnam ha,e substantial. under9exploited. commercially ,iable offshore resources #ithin its Exclusi,e Economic Mone &EEM'. Moreo,er. a considerable part of the EEM is disputed and has to some extend already been exploited by

2(

neighboring countries. As such. there are no ne# untapped fish resources to be disco,ered #ithin the EEM. 2he picture is clear 6 *ietnamEs marine fisheries is predominantly a coastal fishery. 1t is also generally recogni$ed that inshore and near shore stoc% are exploited at. or almost li%ely #ell abo,e. the potential sustainable yields. 2here is thus little or no scope for further expanding coastal fisheries.

43+43+ F2 /2ng c"0"c2t8

4.34.3.> ishing fleet capacity 2he #ood co,er ship is the most popular in *ietnam and the rest are metal. ferrocement. and composite co,er ones. 1n period >;;>93444. the motori$ed boat is rapidly increased from @;.C< of total ships in >;;> to A3.?< in >;;A &2able ?.3' 1n >;;>9>;;A period. the motori$ed fishing boat has annually increased A.@<. from ??.=?D to D>.DCD ships. and the non9motori$ed boat decreased D< per year. from =4.3A? to >@.==D ships. rom >;;> to >;;=. in order to exploit the seafood such as fish in the ,icinity reefs. shrimp. and squidN the number of motori$ed fishing boat increased >D< annually. After that. ho#e,er. this gro#th rate gradually slo#s do#n. Especially. the fifth typhoon in )o,ember >;;D resulted in >C4 boats less than that in >;;@. Ho#e,er. the total engine capacity increased faster a number of ships &Appendix ?.>'. 1n >;;A. total engine capacity is 3.?3D.@AC H+. #hich triple that in >;;>. and reaches 34.D< annual increasing. 2he a,erage engine capacity is >A H+0boat in >;;>. =?.3 H+0boat in >;;A and predicted increase to =A H+0boat by the year 3444. 1t is also predicted that the number of o,er DC H+ boats #ill be C.CC4 by the year 3.444 in #hich a number of o,er ;4 H+ boats are predicted at @.444 2he o,erexploited resources in near shore areas. ho#e,er. are also forcing fisherman to shift to offshore landing operation. #hich resulted in the increasing in ,arious %ind of motori$ed fishing ships. 2his is illustrated by the structural change in motori$ed fishing boat &2able ?.=' T"ble (3+9 #"tego!2e o: Moto!2=ed F2 /2ng &o"t >B@ Eng2ne c"0"c2t8 Less than 34 H+ 34 6 ?@ H+ ?C 6 D@ H+ DC 6 >?4 H+ 7,er >?4 H+ Source: 0ini#try o %i#herie# '..+ @A.4 < =3.4 < ;.4 < 4.? < 4.= < '..* @=.4 < =4.4 < >4.4 < =.A < =.3 <

2*

1t is obser,ed that proportion of o,er ?@H+ ship is increased. ,ice ,ersa the proportion of belo# ?@ H+ ship is in declining. 2his means that the larger ,essels originate total engine capacity increasing. Larger ,essels ha,e sufficient space to handle the fishing gears. %eep their catch and pro,ide primiti,e accommodations for the cre# #hile at sea. 2hese ,essels typically can stay out at sea for se,eral days at a time to reduce steaming time and impro,e fishing producti,ity. 2hough. there are ad,antages of larger ,essel and the increasing in total engine capacity. the producti,ity of ships do not parallel #ith the increasing in total engine capacity. #hich can be explained by the diminishing of return on ne# boat in,estment as #ell as ineffecti,eness of offshore fishing program & igure ?.3'. F2g1!e (3 '9 Tot"l eng2ne c"0"c2t8 "nd 0!od1ct262t8 2hough the number of motori$ed fishing boats only increased A.@< annually. total engine
3000000 1.00 0.,0 2#00000 0.*0 0.(0 0.&0 1#00000 0.#0 0. 0 1000000 0.30 0.20 0.10 0 0.00

To#al en"ine ca(aci#% )HP*

2000000

#00000

1,,1

1,,2

1,,3

1,,

1,,#

1,,(

1,,*

1,,,

2000

/otal engine capacity

Productivity

capacity increased 34.D<. 2his is explained by the trend of shifting to offshore fishing #or%. 2here are. ho#e,er. too fe# feasibility sur,eys on marine resources to support the offshore fishing program from no# to year 34>4 and the annual exploiting plan. "pontaneous and insufficient plan of fisheries de,elopment created problems that need the go,ernment inter,ention. Domestic e,idence from operating #ell equipped offshore ,essels fleets in state o#ned enterprises o,er the last fe# decades do also not support the notion that offshore fisheries is financially ,iable. and has the potential to cost effecti,ely add to *ietnamese fish production and #ealth. Just the opposite. past experiences suggested that offshore fishery. using large capital intensi,e ,essels. is a money losing proposition. and indicated that some of ongoing fisheries are on partially ,iable in financial terms. depending on good fishing seasons in other #aters and a certain amount of go,ernment subsidies.

2,

Pro$&c#i'i#% )#ons,HP*

"o. any expansion into additional offshore fisheries should consequently be approached in a ,ery cautious #ay. Due regard has to be paid to the resource situation. reali$ing that any offshore fishing acti,ity ultimately affects coastal and near #ater fish resources in a negati,e #ay. Close attention should also be paid to the financial and economic ,iability of offshore fisheries. 2he cost of production. of creating 8obs. and the financial ris%s are high. #hile returns are uncertain. A related. but ma8or concern is that in,estment capital might not be readily forthcoming for in,estments in offshore fisheries. 2his again has its roots in the uncertainty and ris% attached to the financial ,iability of offshore fisheries. Moreo,er. international financial institutions #ould li%ely find it difficult to support additional public sector in,estment and o#nership of offshore fishing ,essels #hile the economic reno,ation is still ongoing. 1t #ould also be ,ery difficult for commercial enterprises to 8ustify to their financiers the si$able in,estments that offshore fisheries require. 4.34.3.3 Categories of fishing gear 2here is a di,ersification in scale and name of fisheries exploitation #or% in *ietnam. According to the limited statistical number. there is o,er 34 %ind of fishing gear that are classified into six categories as in table ?.@ T"ble (379 T/e m"2n c"tego!2e o: :2 /2ng ge"! 2n V2etn"m #"tego!2e 2ra#ling +urse seining /ill netting Lift netting "et netting Long lining 7ther Source: 0ini#try o %i#herie# 2ra#l fisheries is the most popular in "outhern region of =A.><. 2his is suitable for the resources in "outheast "ea #here demersal species is about C4< of potential exploitation. !hile in the )orthern and Central )orth pro,inces. the gill netting is C4< and ?3< respecti,ely. 2his is also suitable for resource exploiting in /ulf of 2on%in #here the pelagic fish is CC.@< of potential exploitation. 2he bottom seining is concentrated in pro,inces that ha,e many estuations such as Hai +hong. )am Dinh. Ho Chi Minh City. 2ra *inh. and 2ien /iang #ith the distribution of 33<. >D<. 3D<. >D<. and >C< respecti,ely. 2he high percentage of bottom gear in some pro,inces is not reasonable because of its impact on fish stoc% reser,ation. 2he target of this gear is fish fry. #hich usually go to estuations for feeding. Pe!cent"ge >B@ 3C.4 < ?.= < =?.? < @.C < >=.? < D.> < ;.4 <

30

4.34.3.= Labor in fishing sector 2he labor force of *ietnamese fishing sector in >;;A is at @>4.>;3 persons in #hich the number of labors in non9state sectors is about ;;.C< of total. 2he annual gro#th rate of fishermen in period >;;>9>;;A #as >=<. Beside the ne# supplement. the existing fishermen are still in excess. Most of them. ho#e,er. are in lo# education le,el. 2here are surplus situations that force many landing in a boat. 2hough a number of s%ill. hard#or%ing seamen and experienced captains are in excess. the qualified captains and cre#s for offshore fishing are lac%ing. 2here are regions that cannot recruit enough s%ill labor for offshore fishing. especially the pro,inces in )orthern and "outhern region. Currently. the young labor in near shore areas do not #ant to become fishermen. 1t is because of by hard #or%ing conditions and lo# income resulting from the decreasing in producti,ity.

43+437 Y2eld "nd 0!od1ct262t8

rom >;A@ to >;;@ the annual landing is D44.444 tons #ith the structure of ?4< demersal fish and C4< pelagic fish. 2his can be geographically classified as ?.3< of )orthern. =;.?< of Central. and @C.?< of "outhern. 1n this period. the annual gro#th rate is ?.3<. Ho#e,er. this one in the second half of the period &;>9;@' is C.A<. #hich is >.@ times higher than that in #hole period. After >;;@. the large in,esting in offshore fishing has someho# boosted the landing gro#th rate. 1n >;;D. landing output passed o,er the one9mill le,el &2able ?.>='.

T"ble (3(9 Tot"l o1t 01t "nd "nn1"l g!owt/ !"te o: l"nd2ng Item 2otal annual landing &tons' Annual gro#th rate &<' Source: 0ini#try o %i#herie#, 1999 6: Preliminary 2he ra# materials from inland aquaculture and exploiting are about =44.4449?44.444 tons per year. 2he annual gro#th rate #as C.?< in >;A@9>;;@ period. and total yield exceeded @44.444 tons in >;;A &@=D.AD4 tons'. 2hough the producti,ity gradually decreased. the total fishing yield continuously increases &C.C< per year' in last >4 years because of the gro#ing in numbers of ships and fishing tools. and the accumulating of labor s%ill &figure ?.='. *-C.D44.444 ?.> < '.., >.4DA.444 >@.A < '..* >.>=D.A4; >3.3 < '...D >.3=4.444 A.C <

F2g1!e (3+9 Tot"l 82eld "nd 0!od1ct262t8 2n :2 /e!2e 2nd1 t!8

31

1n the period >;;>9>;;@ the gro#th rate is D.@< annually and that for >;;C93444 is @.;<. 2he a,erage yield per unit effort are in the rapidly decreasing in last >4 years. from >.3 tons0H+ in >;A@ to 4.@C tons0H+ in >;;@ and only 4.?C tons0H+ in >;;A. #hich can be caused by the follo#ing reasonsG 7,erexploiting of fisheries resource in near shore areas. 2he massi,e gro#ing of large fishing ships parallel #ith the non9orientation in fishing ship design as #ell the lac%ing of
>?44444 >344444 >444444 A44444 C44444 ?44444 344444 4 1.00 0.,0 0.*0

To#al %iel$ )#ons*

0.(0 0.&0 0.#0 0. 0 0.30 0.20 0.10 0.00

>;;> >;;3 >;;= >;;? >;;@ >;;D >;;A >;;; 3444 2otal yield +roducti,ity

management procedures ha,e resulted in building up a number of large fishing ships that ha,e not enough the na,igation equipment. Especially. #ithout the storing and processing machines to maintain the quality of fishery product these ships cannot do long time fishing trips. "o they had to operate in the o,erexploited near shore areas. 2his leads to lo# producti,ity in fishing. 2he increasing of selecti,e fishing trend in #hich fisherman only catches the high ,aluable and exportable seafood. 2here is changing in fishing gear structure on fa,oring the selecti,e exploiting of high ,alue species such as lobster. squid. coral reef fish. tuna. mac%erel. shar% finN 2he high stoc% species but #ithout the commercial ,alue such as herring. flying fishNare extracted out the targeted group. "o. thro#ing lo#9price fish bac% the sea has appeared in the fishing process. 2his lead to en,ironmental depletion. resources #aste. and bias on fishing yield data that are only collected at fishing harbors. 2he increasing in untrained fishing labor. #hich can partially resulted in declining of exploiting producti,ity. Lac% of captain and sailor for offshore fishing acti,ities is popular in many coastal pro,inces. especially for those in the )orthern and Central )orth areas. 2his also the reason of misusing of large ,essel for near shore fishing #hich do not utili$e these ,esselsE capacity.

32

Pro$&c#i'i#% )#ons,HP*

Besides the decreasing of producti,ity in fishing sector. there is also a change in exploiting product structure &2able ?.D'. T"ble (3-9 P!od1ct t!1ct1!e 2n co1nt!8 #"tego!2e ish &<' "quid &<' "hrimp &<' 7ther seafood &<' Tot"l 82eld Source: 0ini#try o %i#herie# 2he exploitation #as shifted to the high commercial ,alue product such as lobster. squid. shar%. snapper. and garrupa that are fa,ored in exporting. !e can see that the squid increase from D.C< in >;;@ to >>.@< in >;;A and there is 4.=< less in shrimp. 7ther seafood also gre# up to @.=D< by the increasing in t#o9shell mollusc in (ien /iang. 2ien /iang and Binh 2huan. 2he fish percentage on total yield. ho#e,er. reduced to DC.><. '..A>.A D.C C.D =.; .-(?<(4 '..* DC.> >>.@ D.4 @.? '?'77?*4.

43+43( F!e /w"te! :2 / e;0lo2t"t2on

4.34.?.> +ond fish exploitation 2he total area of ponds is counted o,er 344.444 ha surface in #hich pond areas are o,er 34.444 haL the rest is reser,oir surface. 2he annual fisheries yield in pond is about ;.444 tons in #hich ?.444 tons yielded from la%es and @.444 tons yielded from reser,oirs. 4.34.?.3 ish exploitation in lo# land areas 2here are no huge lo# lands in the )orthern and Central area. 2he Me%ong :i,er delta. ho#e,er there are many lo# land areas. or example. the surface of t#o biggest lo# lands in this region. 2hap Muoi field and Long 5uyen quadrangle. is >?4.444 hectares and 3>A.444 hectares respecti,ely. 2he annual yield of t#o biggest lo# lands is about 34.444 tons. 1n the rainy season. fish from Me%ong :i,er system goes to the lo# lands for feeding and returns bac% the Me%ong :i,er system in the dry season. 4.34.?.= :i,er fish exploitation 2here are thousands of ri,ers in *ietnam #hich can supply ,arious fish species. 1n >;D4s. there #ere thousands tons of fish exploited from D4 fishing collecti,e located along :ed :i,er. 2he o,erexploitation of resource has resulted in s#itching of ri,er fishing #or% to another ones. 2here is the same situation in ri,er system in Central area. At present. only the Me%ong :i,er can still supply approximately =4.444 tons of fish per year to maintain ?A.444 fishing 8obs in 3?; ,illages along the ri,er. 2he interlacing channel systems in "outhern area also contribute the ma8or part to total yield of fresh#ater fish.

33

43+43- #oncl1 2on

/enerally. #e can summari$e the pros and cons of fisheries capture as follo#G 2here are ,arious %inds of fishery resources that can be exploited in either sea#ater or fresh#ater. Ho#e,er. the exploitation is nearly reaching the natural limit. so it can only further de,elop by rationali$ing current fishing resources. 2here are the large ,essel fleets that can fish in offshore areas. ho#e,er. this category of ship are in the marginal position. Lac%ing of na,igation technologies and preser,ati,e equipment for large ,essel fleetsE operation. 2here are a large number of s%illed and experienced laborers. 2his #or%force ad,antage. ho#e,er. can be only maximi$ed for offshore fishing acti,ities if there is retrained program. Lac%ing of capital in,estment in impro,ement and maintenance ,essel fleet. 2here is increasing in fishing ships. but the producti,ity is reducing.

43+' F2 /e!2e "A1"c1lt1!e 43+'3' %"te! S1!:"ce

1n >;;A. the total exploited surface occupied =D< in the total stoc% of #ater surface &Appendix ?.3'. 2he tidal and small pond areas ha,e been exploited up to ??< and C;< of stoc% #ithout considering that the exploited surface of these #aters is o,er the ecological threshold. At present. ho#e,er. lo# land fields and opening #ater surfaces are about 3D< of stoc% and they can be further de,eloped 1f #e classify the #ater surface by region &2able ?.;'. it is obser,ed that the #ater surface exploiting #ere different at each region. #hich can be explained by the follo#ing reasonsG 1nland aquaculture is de,eloped in the )orthern and "outhern regions and less de,eloped in Central region especially in Central Highlands and Central Coast. 2his is due to the fact that in the )orthern and "outhern regions. there is presence of the :ed and Me%ong :i,er systems. #hich can pro,ide ad,antages for inland aquaculture. 1n contrast. the absence of ma8or ri,er systems in Central regions imposes limitations on supply of fresh #ater for inland aquaculture. especially during the dry season. )arro# mountainous topography. una,ailability of hatchery and less abundance of #ild seed catching in ri,er systems are other disad,antages. #hich constrain the de,elopment of inland aquaculture in Central regions.

-nli%e inland aquaculture. coastal aquaculture has not de,eloped e,enly along the lengthy coast of the country. "o far. most of the de,elopment 8ust occurred only in the "outhern region. 2his is because the #arm climate in the south that fa,or shrimp culture. and unli%e the northern and central regions. the southern region is not affected by tropical typhoons. 1n addition. natural production of fish and shrimp in the southern region is quite high due to the presence of ,ast areas of coastal mangro,es especially in Minh Hai. (ien /iang pro,inces. 1n the last decade. despite great efforts the go,ernment that ha,e made to conser,e these mangro,e habitats. illegal con,ersion of mangro,es into shrimp ponds still continued occurring #hich cumulati,ely destroyed more than half of the countryEs mangro,e resources.

T"ble (3<9 Reg2on"l d2 t!2b1t2on o: 1!:"ce w"te! Reg2on Mountainous0Midland :ed :i,er Delta Central Coasts Central highlands "outheast Me%ong ri,er Delta Tot"l Source: 0ini#try o %i#herie#, 1999 Stock 1!:"ce >/"@ >?4.C3? >A=.D>? >;=.?=4 A@.444 >==.444 ;C?.?>4 '?,44?',* Potent2"l 1!:"ce >/"@ >=C.=A4 >3>.3AC >>4.3=? =A.444 D=.D=4 @@3.444 '?47'?<74 E;0lo2ted 1!:"ce Area &ha' D>.C@= D>.4;3 @?.@C4 ;.C>3 ?@.C44 =D=.A>= <+<?774 < used @> < =; < 3A < >> < =? < =; < 7, B

43+'3+ L"bo! 2n AA1"c1lt1!e Secto!

2he aquaculture acti,ities directly or indirectly benefited @@4.444 persons in >;;A. 2his is important in the social9economic de,elopment aspect and especially #orth for unemployment sol,ing issue in rural area #here there is the pressure of labor surplus.

43+'37 Tot"l Y2eld "nd E;0o!ted V"l1e

2otal aquaculture yield in >;;A is @=D.AD4 tons. equal to =3< of total yield in fisheries industry. 2he sea and brac%ish #ater product occupied ==<. increasingly ;.?=< per year &Appendix ?.='. 2he exported ,alue of aquaculture product is @4< of total exported ,alue in fisheries industry.

43+'3( #1lt1!e Met/od

4.3>.?.> resh#ater culture %i#h culture in #mall pon!# an! la(e# 2his is the traditional method in aquaculture. Ho#e,er. increasing need for house construction has led to narro# do#n this #ater surface. ish categories used for this method are rather stable. including blac% carp. ma8or cap. crossbred catfish. tilapia. etc. 2he producti,ity is about =tons0ha. 2he local hatcheries ha,e enough capacity to supply the

3#

artificial fish fry. Beside that. the culture of speciality as trionychid turtle. eal. crocodileNis also de,eloped. Lac%ing the de,elopment plan and unstable mar%et. ho#e,er. ha,e limited the gro#ing capacity of these species. %i#h culture in the opening &ater #ur ace 2he most popular species is tench. Beside that. there are other %inds such as ma8or cap. tilapiaN Because of the difference in protection and the lo# price of tench. the scale of tench culture is declined in inclination. 2he popular culture method is fresh #ater cage feeding combined #ith exploiting from reser,oirs and ri,ers. 1n the )orthern and Central +ro,inces. the ma8or species is grass carp that is fed in the >393?cubic metre cages. yield of ?@49 C44%g0cage. 2here is a different in "outhern pro,inces. 2he ma8or species in this region are sna%ehead fish. marble goby. and pacific catfish. 2he si$e of cage is usually large. about >449>@4 cubic metre per cage and a,erage yield about >@934 tons0cage. -p to >;;A. there ha,e been >C.444 fish cage in *ietnam. in #hich about >3.444 cages are located in ri,er. Approximately ;A.;A4 ha of reser,oirs are employed to feeding and exploiting. Ho#e,er. the unsustainable exploiting method caused lo# yield of ;9>3%g0ha of #ater surface. 1n conclusion. this method has utili$ed the #ater surface. created ne# employment. and contributed to householdsE income and life stability of residents along ri,er and reser,oirs. %i#h culture in the hollo& iel!# 2here are @A4.444 hectare of lo# fields. #hich can be utili$ed for fish culture by the fish9cum9 paddy method. 1n >;;A. only >@?.344 hectares #ere exploited. :elati,ely high producti,ity and effecti,eness are the ad,antages of this method. 4.3>.?.3 Brac%ish shrimp culture 2he culture in brac%ish #ater has rapidly de,eloped in the past period. 2here is a transforming of small and self9supported production to goods production. 1n recent years. shrimp has cultured in most of the coastal pro,inces. "hrimp culture area counted for 3;4.444 ha in >;;A. 2iger pra#n (P$mono!on'. banana pra#n (Penaeu# merguien#i#). 1ndian pra#n (P$in!icu#). +.orientalis. and yello# pra#n (0$en#i#) are chosen for culture. but tiger pra#n is the most fa,ored one. "hrimp can be cultured in paddy field or salty9#ater submerged forest areas. At time being. extensi,e and impro,ed extensi,e farming are the most popular methods. #hich are lo# producti,ity &2able ?.>>'. 2here is still small area &about >>.4449>=.444 hectares' for semi9intensi,e and intensi,e farming. in >;;A.

T"ble (3,9 P!od1ct262t8 2n d2::e!ent met/od o: b!"ck2 / /!2m0 c1lt1!e #"tego!8 Extensi,e farming 1mpro,ed extensi,e farming 2raditional shrimp9cum9paddy field "emi9intensi,e farming A6e!"ge 82eld >@49344 %g0ha 3@49@44 %g0ha 3449=44 %g0ha >9>.@ tons0ha

3&

1ntensi,e farming Source: 0ini#try o %i#herie#, 1999

3.@9? tons0ha0time

2he tidal surface. salty9#ater submerged forests. estuary areas are inefficiently exploited at some places because of the lac% of regional de,elopment plans. feasibility plans. and sufficiency and systematic in,estments. 2here is unreasonable use of #ater surfaces. #hich resulted in harmful ecological en,ironment 4.3>.?.= Marine culture "tretching long coastal line #ith many bays and channels is a good condition for marine culture specialty such as pearl. lobster. cage fish. t#o9shell mollusc. sea#eed. )e,ertheless. there are limitations on capital. technology. and brood9stoc% producingL thus marine culture has depended on natural conditions and #as underde,eloped. Shrimp an! #ea &ater i#h culture: 1n recent year. lobster. snapper. and garrupa #hich are cultured in cage form are rapidly gro#n in some pro,inces such as Fuang )inh. 2hua 2hien Hue. (hanh Hoa. +hu Oen. Ba :ia9*ung 2au. 1n >;;A. there are about 3C.444 cages. #hich can yield of A9>4 %g0m=0cage in the #hole country. 0ollu#c culture: 2he total yield in >;;A is about >4@.4449>>@.444 tons in #hich oyster. arca and pearl are the main species. 7yster contributing the ma8or part in total mollusc yield is cultured mostly at pro,inces (ien /iang. Ben 2re. 2ien /iang. district Can /io of HCMC. and at some places in pro,inces )am Dinh. Fuang )inh. 2hai Binh. At present. the mollusc culture. ho#e,er. is in the extensi,e farming form and lo# producti,ity. 0arine cra) culture: 1n >;;A. this form used ?.@449@.444 hectare. yield of @.@449C.444 tons of output. )orthern regions contributed to D@9A4< output. mean#hile. that of "outhern is only about >=9>@<. 2here are ,arying forms in marine carp culture.

43+'3- E;ten 2on e!62ce :o! "A1"c1lt1!e

4.3>.@.> Brood9stoc% hatchery system -roo!+#toc( hatchery #y#tem o re#h &ater #pecie#: Almost all the traditional fresh #ater species #ere artificially produced recently. 2he brood9stoc% supply of these species is rather reliable. 2here are =@? hatcheries. #hich can supply ? bill fish fry to different localities all o,er the country. 2he fish fry is still priced at high rate. especially the specialty. 2here is no guaranty system matching the quality of fish fry and demand. Shrimp Po#t+larvae hatchery #y#tem: "hrimp post9lar,ae #ere mostly produced in artificiality. 2here are currently o,er 3.444 shrimp hatcheries. #hich can supply @.444 mill of +L>@ shrimp per year to partial fulfill countryEs demand &2able ?.>3'.

3(

T"ble (3*9 S2t1"t2on o: /!2m0 0o tCl"!6"e /"tc/e!8? '..* Reg2on :ed :i,er Delta Central Coasts "outheast Me%ong ri,er Delta Tot"l Source: 0ini#try o %i#herie#, 1999 N1mbe! o: /"tc/e!8 C >.CD= = ?>C +?4.* Potent2"l c"0"c2t8 >m2ll PL'-@ >@ @.3@D =.444 >.3>; *?(.'

Ho#e,er. feeding the parents shrimp cannot match the requirements in quality and ,olume. 2his leads to the lac%ing in ,olume of parents shrimp all o,er country. especially in the main season. 2he main limitation in brood9stoc% producing is the non9homogenous distribution of hatcheries in map. 2his leads to long distant deli,ery of brood9stoc%. #hich can result in higher price as #ell as quality deterioration. 4.3>.@.3 eed production 2here are 3? feed producers #ith total capacity of ?D.C?4tons0year in the #hole country. E,en though the capacity is lo#er than existing demand. it is said that the producers face difficulties in selling product because of high price resulted from unreasonable costs and unqualified product. Especially. the requirements in semi9intensi,e shrimp farming and intensi,e caged fish farming resulted in feed imported.

43+'3< #oncl1 2on

Aquaculture ha,e been being in transforming to goods production mechanism and gradually become a ma8or sector in fisheries industry. Aquaculture products #ith relati,ely high quality and ,alue ha,e become the main source of ra# material for fisheries manufacturing as #ell as ,alue added increasing in exported products. 2his brought the total exported ,alue of aquaculture in >;;A to -"D ?D3 mill. accounted of @@< in total exported ,alue of fisheries industry. "hrimp culture has been quic%ly de,eloped in the coastal areas. 1n >;;A the brac%ish #ater surface utili$ed for shrimp culture has gro#n up to 3;4.444 hectares and yielded ;4.444 tons. 2he exported ,alue of cultured shrimp is o,er @4< of total shrimp exported ,alue. 2he shrimp culture utili$ed the #ild tidal areas and compensated the losing ,olume of shrimp landing. Ho#e,er. there exist some pros and cons in aquaculture sectorG

3*

"ince >;;4. along #ith the reno,ation process. considerable progress has been made in respect of increasing the production from aquaculture sources. +roduction capacities ha,e been liberated. this has resulted in the better and more effecti,e use of aquaculture habitats and resources. Household income has increased and more consumer and export goods #ere sold. 1ndeed. the economic liberali$ation has resulted in the establishment of ne# and ,ery lucrati,e aquaculture farming systems. Lac% of concrete and adequate policies and regulations has limited the de,elopment. 7rgani$ation and go,erning is still not inno,ated and rene#ed. 2here is not the regional de,eloping plan for aquaculture. 2he pre,ailing system of leasing out the right to use specific areas and habitats for aquaculture in specific time period. typically fi,e years period. hampers the long9term de,elopment of the sub9sector and encourages misuse of habitats. 2he lease period is too short to allo# substantial in,estment in proper exca,ation. emban%ments. ponds and #ater supplies. Moreo,er. short time leasing term is not suitable as collateral for institutional borro#ing. 2he most popular forms in aquaculture are extensi,e and ne# extensi,e farming. #hich depended so much on natural conditions. 2here are not enough s%ill technicians and efficient incenti,e programs. "toring and selling issues are also in difficulties. especially in the concentrated fresh#ater culture areas. 1n fact. national aquaculture technologies and fish farming system excel in a number of aquaculture areas. Moreo,er. aquaculture acti,ities ha,e pro,en to be cost9effecti,e #ays of increasing both the production and ,alue of aquatic product. Ho#e,er. technology foundations built in. transferring technology to production. and human resource training do not still match aquaculture de,eloping requirements. especially the technologies in the field of en,ironmental disposal. non9disease brood9stoc% producing. and feed production. urthermore. a shortage of appropriate technologies impedes a rapid expansion of the aquaculture sector. Ad,anced aquaculture technologies need to be de,eloped and disseminated to operators to fully utili$e *ietnamEs potential. +art of the constraint to disseminate. e,en though the technologies are a,ailable. are attributed to budget constraints. 1t is necessary to further refine and strengthen the aquaculture technologies that are a,ailable at the different research institutes. 2here is also need for disseminating these technologies to the farmers. Moreo,er. interesting and potentially ,ery promising ad,ances ha,e been made in coastal marine aquaculture acti,ities. "uch ad,ances include technology de,elopment for the farming of scallops and other molluscs. pearl oysters. sea cucumbers. sea #eeds. and number of high ,alue marine fish species. 2hese combined #ith the establishment of suitable integrated coastal $one management systems and the adoption of ad,anced sea farming technologies has the potential to ,ery significantly boost *ietnamese production from the marine habitats. A shortage of in,estment and #or%ing capital also hampers the effecti,e de,elopment of aquaculture acti,ities. 2he current shortage of capital limits the formation of ne# enterprises. and the operation of existing enterprises in aquaculture. Moreo,er. the une,en access to capital sources bet#een public sector enterprises and pri,ate enterprises tend to fa,or that capital be located to the public sector #here the ba%ing ris%s are lo#er. 2his distorts the funding of business and hampers de,elopment of pri,ate sector. Ho#e,er. aquaculture is labor intensi,e rather than capital intensi,e.

3,

1nfrastructure and extent ser,ice for aquaculture sector is still obsolete. A %ey constraint to increase the aquaculture production has historically been a shortage of fish and shrimp seed. 2he hatchery is mainly in the public sector and this one finds it increasingly difficult to meet brood stoc% demand. 7ne of the main reasons is that hatchery operations are delicate. !ith requirements of high s%ill le,el and full9time attention. this does not #ell fit in public sector #here the indi,idual has a little or no incenti,e for extra attentions. Moreo,er. budgeting procedures do not 8ustify this #or%. Consideration might be gi,en to pri,ati$e these state o#ned fish and shrimp hatcheries. 2he scale of this sector is ,ery suitable for small businesses. #hile the state o#ned enterprises find it difficult to effecti,ely operate. 1t gi,es promise of a future that #ould be less dependent on the uncertainties of capture fisheries.

43++ F2 /e!2e P!oce 43++3' R"w m"te!2"l

2ng "nd M"n1:"ct1!2ng

2he ra# material for fishery processing is mainly supplied from the fisheries landing and culture in #hich the landing occupied D4< in total input. :a# materials used for processing ha,e been increased in recent year because of the increase in total fisheries output. changing in processing technologies and consumersE habit &2able ?.;'. 2here has been rapid increase in ra# material used for export processing. #hile the fresh product consumption has reduced so much. Changing in consumption structure reflects consumersE habit change. 2he increasing in consumerEs income and the total fisheries output ha,e put many choices to consumer. "o. it is clear that customer #ill choose less using of fresh product that is not #ell guarantied. especially in the case of inefficient food quality control and bad condition in fishery product storing equipment. T"ble (3.9 Pe!cent"ge o: 0!oce ed 0!od1ct 2n tot"l :2 /e!2e o1t01t

Item :a# material used for export processing &<' :a# material used for local consumption processing &<' :a# material for fresh product consumption &<' 2otal ra# material for export processing &tons'

'..' >@ =4 @@ >=4.444

'..>;.3 =3.= ?A 3@4.444

'..* 3?.= ?> =@ ?44.444

Source: 0ini#try o %i#herie#, 1999

43++3+ R"w m"te!2"l 0!oce

2ng

2here are ,arious storing methods for different %inds of gearing and ship. 1n ocean fishing ships. ra# material is iced or salted for the trash fish. 2here are little ships that equipped the fro$en hold. or the daily trip fishing boat. ra# material is almost not processed. 2he material quality is usually deteriorated because of lac% of in,estment in fro$en storing equipment and the primiti,e store equipment. Marine fish is loaded into >?3 fishing harbors that are not #ell equipped. 2hus. in hot season fisheries are usually deteriorated rapidly and the losing after lading is still so high. amounted =4< of total fish capture. 2he multi layers in the distribution process also affected ra# material quality. 2he materials from fresh and brac%ish #ater culture are deli,ered directly to mar%ets or manufactories #ithout storing stage because of the distance bet#een culture site and mar%et places is not far. and the acti,eness in har,esting. 2his %ind of material is usually in fresh and good quality. 2here are some researches on post9har,est technologies. )e,ertheless. they ha,e so little impact on processing process because of the financial and economic. and the customersE acceptance of the existing product in the local mar%et.

43++37 P!oce

2ng "nd M"n1:"ct1!2ng :"c2l2t2e 2n :2 /e!2e 2nd1 t!8

-p to >;;A. there are >;C manufactories. 3> 1 F processes. and >? ,acuum pac%aging machines in the #hole country #ith >.444 tons0day of total fro$en capacity. 2otal processing capacity is 344.444 tons per year. equally the a,erage of >.4D@ tons0factory0year. 2here are another facilities for fro$en process such as 3@.=;= tons capacity of fro$en #arehouse. t#o fro$en machine K equipment supply units. =.;?C tons0day of ice producing. 3A fro$en fish transport ships #ith total C.>@4 tons capacity &ho#e,er. only = ships can operate in current'. and >444 refrigerator. cool %eeper. and normal ,ehicles #ith total ?.444 tons capacity Besides that. almost all the fisheries manufactories ha,e fro$en #or%shops. 2he number of factories is uncertainly gro#n in different period of time &table belo#'. T"ble (3'49 G!owt/ !"te 2n 0!oce '.,-C'.*Annual gro#th rate >D.3D <0year 2ng "nd m"n1:"ct1!2ng :"c2l2t2e '.*<C'..4 3@.A= <0year '..'C'..3.AC <0year '..<C'... >D.C <0year

Source: 0ini#try o %i#herie#, 1999 1n early >;A4s. the state processing plants #ere gi,en freedom to export. A se,ere lac% of foreign exchange prompted *ietnamese go,ernment to liberali$e their policies and allo# processing plant export directly. 2hey also allo#ed applying self9regulating accounting and management systems. 2hese are soon pro,ed to be financially attracti,e. Exporting plants that financed through the state budget could buy all their ra# material inputs at *)D fixed lo#

cost. and sell at foreign mar%et for hard currencies. 2hey #ere allo#ed to use their financial profit to rein,est and expand production capacity. 2hey #ere also allo#ed to use foreign exchange surplus to import consumer goods that could be sold in local mar%et in order to generate further extra profit. Encouraged by these artificial. the exporting fish processing sector expanded ,ery rapidly. )ational state o#ned processing plants expanded their operation and they #ere soon follo#ed by ne# plants. #hich #ere o#ned and operated by pro,inces. district. cities. and municipalities see%ing to bolster their source of re,enue. 2he lo#est gro#th rate in >;;>9>;;@ period could be explained in shortage of ra# material caused by seriously shrimp disease in >;;?9>;;@. Ho#e,er. gro#ing of tiger pra#n culture as #ell as the expanding in European and American mar%et ha,e compensated that shortage and e,en though created prospects for de,elopment. At present. ho#e,er. fisheries processing sector is in recession. 7nly =@< of manufactories are functioning ,ery #ell. 2his can be explained by the follo#ing reasonsG /o,ernment management role is still #ea%. Central go,ernment is inadequate in direction and combination to build master de,elopment plan that lin%s the local go,ernments and fisheries industry. Besides that. the boomed de,elopment of state o#ned enterprises #ithout efficient management procedure has contributed to the ban%ruptcy of these enterprises. 2here is obsoleteness in technology. 2he monotonous product. #hich is mostly in semi9 process form has consumed so much material input and has been lo#ly priced in exported mar%et. 2here is a little inter9lin%ages bet#een manufacturer. trader. and ra# material supplier in fisheries industry. #hich resulted in unfair competitions such asG price compel in finish goodsL raising price of ra# material inputL forcing into lo#er ran% of goodsL tax e,adingN 2his has reduced the competiti,e ad,antages of *ietnamese fishery products in global mar%et. +rocessing factories currently can only utili$e @4< of their capacity. 2his is a result of unbalance bet#een processing capacity and mar%et demand as #ell ra# material supply. 2here is lo# in,estment in technological inno,ation and transfer research. 2his constraint on appropriated technologies applying to quic%ly responds the mar%et demand. 2he shortage in mar%et information also affects the operational planning acti,ities of firms. Lo# material quality input. high costs of input. and lo# price of finish product are the main difficulties #hich absorbed the competiti,e ad,antages of fisheries manufacturers. 2here are many shortcomings in post9har,est storing technologies. #hich led to the quality deteriorating in ra# material

!hen #e examine the relationship bet#een ra# material capacity and the number of manufactories in three main regions. there is a rational &Appendix ?.?' A number of manufactories in northern pro,inces is lo#est. only C.4< in total. 2his is resulted from shortage of material supply. #hich is caused by the underde,elopment of fisheries culture and exploitation as #ell as the disturbance of Chinese traders.

2he a,erage ratio of ra# material per manufactory is about >.A44 tons. Ho#e,er. there is a difference among >4 ma8or pro,inces &2able ?.>>'. T"ble (3''9 A6e!"ge m"te!2"l 0e! m"n1:"cto!8 2n ten m"5o! 0!o62nce P!o62nce (ien /iang 2ra *inh Ben 2re Binh 2huan )inh 2huan 2ien /iang Fuang )gai +hu Oen Ba :ia 6 *ung2au Minh Hai #o1nt!8 Source: 0ini#try o %i#herie#, 1999 PG Calculation is based on the assumption that ra# material input only occupied 3@< total yield. Ho Chi Minh City. #ith only >A.444 tons of material. has been located by ?C manufactories. 1f #e base on the statistical numbers in >;;@ #hich pro,e the ra# material input occupied only 3@< of material source. then the a,erage material per manufactory of HCMC is only >44tons0manufactory. Ho#e,er. in rich material areas this ratio is A.?44tons0manufactory in (ien /iang. or C.>3@tons0manufactory in 2ra *inh. 2his pro,ed that though the regional distribution of ra# material and number of manufactories is rational. for pro,incial le,el it is not suitable. 1t is obser,ed that the manufacturing and processing capacity is in excess the ra# material supply. 2his leads to strongly compete in ra# material buying #hich result on higher price of *ietnamese fishery products as #ell as losing of competiti,e ad,antages. Tot"l 82eld >ton @ >CA.444 ?;.444 >>A.@44 ;@.444 >D.444 =4.444 =D.444 3>.444 ;>.AC4 >C>.444 N1mbe! o: :"cto!2e @ 3 @ @ > 3 = 3 >4 >A A6e!"ge D >ton Em"n1:"cto!8@ A.?44 C.>3@ @.A3@ ?.D@4 ?.3@4 =.D@4 =.4D@ 3.C3@ 3.3;@ 3.33@ '?*44

43++3( L"bo! 2n :2 /e!2e m"n1:"ct1!2ng

2he total labor forces in central state o#ned enterprises are ?.>@? persons. Mean#hile. total labor in local enterprises are ?A.D33 persons. excluding the seasonal contracted labor. in #hich =.A< &>.A== persons' is in )orthern area. 3D.A< &=.@@C persons' is in Central area. and the rest CA.?< &==.=== persons' is in "outhern area. 2he a,erage of employees per enterprise is =44employees0enterprise.

43++3- P!od1ct c"tego!2e

*ietnamese fishery product can be classified into main categoriesG iced. fresh. canned. dried. and fermented products. 2he gro#th rate of fisheries iced product is so high. 3@.DD< per year for >;A@9>;;@ period and o,er 34< per year for >;;C9>;;A period. 1ced shrimp ta%e the biggest portion in the fisheries iced product. 1ts share in total iced product is @C< in >;;49>;;@. ?C< in >;;D and @3.@< in >;;A. 1n >;;@. iced squid ta%es about >4.==< &>A.A44tons' of total fisheries iced product. #hich is equal to >4 < of total fisheries exported. 2here are different forms of iced squid exportedG a fro$en squid form. "ashimi. seafood mixN 2here is a rapid increase in iced fish. 1n >;;>. if there is only >>.444 tons ra# material for iced process. then in >;;A this one is about ?;.344 tons. 1ced fish occupied 3?.@;< of total fisheries exported product in >;;@. and 3C.>;< in >;;D. 2he ma8or forms of iced fish are iced filet and original iced fish. And there are other %inds of iced product such as iced arca. iced crab. iced sentinel9crab. stuffed sentinel9crabN 2hese %inds of iced product rapidly increased from @44 tons in >;;> to ?>.4@4 tons in >;;D. equally 3>.A@< of total fisheries exported. 2here is gro#ing demand for fresh product. but mainly from exported mar%ets. 2he demanded products include either ali,e form of crab. fish. and shrimp. or fresh form of marine tuna meal. 2here are only = canned food production bases in *ietnam. Ha Long canned food company has capacity of >44.444 cans0day. 1n >;A@. the company produced 3.A44 tons for local consumption and export. in #hich canned fish is 3.444 tons. canned shrimp is >C tons and the rest is others. Dried product is popularly produced because of the little requirement on equipment and technology. 2he main products are dried9shrimp. dried cuttle9fish. dried fish. dried sea#eed. and others marinated dried product. 1n >;;4. dried cuttle9fish achie,ed the record of o,er ?.444 tons. Ho#e,er. the total output is not stable because of the fluctuation in ra# material supply. Dried sea#eed is mainly produced by simple traditional method. Depending on the mar%et demand. the finished product can be either s#eet dried sea#eed or salty dried sea#eed. or example. s#eet dried sea#eed is exported to Japan. mean#hile. salty dried sea#eed is exported in =@%g pac%age form to :ussia. 1n >;;D. total dried fish is about 3=.444 tons. 1n the past. Central area can contribute >4.444 tons of dried flying fish into total dried fish. Currently. mar%et re8ections on dried flying fish ha,e caused reduction of total dried fish. 2here are not statistical numbers of dried peeled shrimp. dried shrimp. and dried marinated fish. 2here are only = factories. one belongs to Ha Long Canned ood Corp.. and the other t#o are located in *ung 2au. 2he total yield in >;AA is C.444 tons. 2his increased to 3D.?D4 tons in >;;3. Because of strong competition. ho#e,er. it reduced to >;.444 tons in >;;A. ermented product includes the main products as fish sauce. fermented pra#n. fermented shrimp. and sour fermented shrimp. Excluding pri,ate sector. there are D= stated fish sauce production bases in #hole country in #hich >4 bases are in )orthern area. 3C bases are in Central area. =4 bases are in "outhern area. and D bases are central state o#ned base. 2here are only the traditional technologies applied in fish sauce production #ith a,erage of C months production lead9time. Ho#e,er. fish sauce production de,elops so much. #hich achie,ed >@4 mill litters in >;;@. >C> mill litters in >;;D. and >D4 mill litters in >;;A. 2he

annual gro#th rate is ?.C<0year in >;A@9>;;@ period. and A.>@<0year in >;;49>;;@ period. 7ther fermented products are not counted because of the relati,ely small ,olume. 2here are other %inds of product. #hich can be either exported such as fin. dried fish bladder. and fish foot. or locally consumed such as pearl. agar. alginat. and fish sil,er oil.

43++3< Food A1"l2t8 2n 0ect2on "nd m"n"gement

2hough so many legal criteria #ere locally applied for fisheries selling. little attention is paid to chec%ing and managing the implementation of these criteria. 1n the past. some fishery products ha,e been internationally a#arded. 2hese products currently face difficulties such as the appearance of metal nail. cement. and agar in iced shrimp product. 2hese strongly affected the creditability of *ietnamese fishery product. 2he state or ministry le,el criteria only affect the large exported ,olume product. 2he quality of goods in small ,olume production. ho#e,er. only depends on traderEs inspection if they are exported. 7ther#ise. there are no inspections if they are consumed in local mar%et. *ietnamese fisheries exported companies are only ran%ed in the second class European list on fisheries exporting country classification.

43++3, #oncl1 2on

2he biggest opportunity for the processing industry exists in ser,ing domestic mar%et. Assuming that the current population of about DC.? million people #ill continue to gro# by the current gro#th rate. the population #ould reach ;4.@ million by 344@ and full >44 mill by 34>4. !ith this scenario. an additional 3? million people #ill be added to the population o,er the next >4 years. 2hat #ill require an additional 3@4 thousand tons of fish and fishery products annually. 8ust to maintain the current le,el of domestic consumption of >4.3 %g per capita per year. "ophisticated domestic mar%et #ill de,elop rapidly. An e,er increasing in number of *ietnamese people #ill ha,e higher le,el of discretionary incomes a,ailable for the purchasing of high ,alue product and for eating out. 2he number of tourists and businessman that ,isit and stay in country for an extended period of time #ill also increase. 2hat #ill support a large domestic. to some extend a foreign exchange earning. Catering for this consumer and restaurant mar%et represents ,ery significant business opportunities and prospects for the fisheries product distribution and processing industry. urthermore. the gradually impro,ement of infrastructure #ill enable fish producers to reach the domestic mar%ets ,ery efficiently and at lo# cost. Domestic mar%et #ill strengthen the processing industry. (no#ing domestic customer taste. being in close contact #ith domestic customer and spea%ing his language automatically pro,ide a comparati,e ad,antage for *ietnamese processors. 2hat ad,antage is further enhanced by tariff impose on imported fishery products. -tili$ation of these inherent ad,antages #ill allo# domestic processing industry to ser,e a potentially lucrati,e mar%et. accumulate earnings and experiences that pro,ide platform for entering as #ell as being more competiti,e in global mar%et.

2he shrimp mar%et is expected to continue gradually gro#ing by an annual a,erage bet#een 3 and = percents. 2he mar%et #ill. ho#e,er. continue to be ,olatile and hea,ily exposed to exchange rate fluctuations. 2he strong Oen and sluggish gro#th in Japanese economy is exerting relati,ely strong do#n#ard price pressures on shrimp mar%et. Being price ta%er. *ietnamese shrimp producers are ,ery exposed to these pressures. *ietnamese producers are #ell positioned in both of the ma8or shrimp mar%ets and they are also #ell positioned to ta%e ad,antage of #hate,er niche mar%ets may exit 6 pro,ided that they are fundamentally competiti,e #ith Asian shrimp producers. "hrimp mar%et has become a commodity mar%et. dominated by the traditional @ %g bloc% pac% and its deri,ati,es. *ietnam has potential to effecti,ely establish reliable supplies on the ma8or mar%et for shrimp. fish. and mollusc products. not from capture fisheries. but from the countryEs huge potentials in aquaculture productions. 2here is no intensi,e in,estment to de,elop the competiti,e ad,antage productsL a systematic sol,ing on ra# material supply. appropriated processing technologiesNL and inno,ation on post9har,est storing technologies to pre,ent the quality deterioration 2here is a surplus in production capacities #hich are not utili$ed. 2he artificial trading and processing en,ironment in early to mid >;A4s had fa,ored the large and self9support manufactories that equipped transport ,essels and cold storage capacity. 2his requires large scale in capital in,estment and operating. #hich can quic%ly turn into a disad,antage in a high competiti,e en,ironment.

43+7 F2 /e!2e t!"d2ng

Except for the sub9sectors engaging in export. fish mar%eting and trade remain at a ,ery lo# le,el of de,elopment. -ntil mid >;A4Es. mar%eting and trade in fish and fishery products #as almost entirely carried out by public sector enterprises. A ma8or part #as distributed as a portion of remuneration for #or% and #hate,er #as left for consumer sales #as sold at fixed prices at public stores. "mall quantities #ere traded directly bet#een producers and customers. Ho#e,er. #ith the liberali$ation of trade and the introduction of mar%et mechanism. a domestic fish mar%et started to de,elop to#ards the second half of the >;A4s. 1n the last ten years. there is an increase in *ietnamese fishery trading in both domestic and international mar%et. 2he internal and external mar%et structure has increasingly changed in international mar%et proportion from >.3< in >;A4 up to >=.>< in >;;4. 33.C< in >;;@ and 3?.=< in >;;A &2able ?.>; and igure ?.?'.

&

T"ble (3'+9 P!o0o!t2on o: !"w m"te!2"l con 1m0t2on Item 2otal fisheries yield &tons' /ro#th rate &<' Material for export &tons' +roportion &<' Local consumption &tons' +roportion &<' Source: 0ini#try o %i#herie#, 1999 F2g1!e (379 P!o0o!t2on o: !"w m"te!2"l con 1m0t2on '.*4 @@A.CC4 9 C.A44 >.3 @@>.AC4 ;A.D '.*A4A.4C4 ??.A C3.444 D.D D?C.4>4 ;3.3 '..4 ;DA.AA4 3>.> >3A.4@? >=.> A@4.A3C AC.; '..>.?>?.@;4 ??.@ =3>.444 33.C >.4;=.@;4 DD '..* >.C?C.D44 >C.? ?44.444 3?.= >.3?C.444 D?.D

43+73' Fo!e2gn m"!ket

4.3=.>.> Exported ,alue 2hough the fisheriesE efficiency has decreased gradually. its export has been gro#n up rapidly ?.C= times from >;;4 to >;;;. 1n the period from >;;> to >;;@. it increased >CA.=<

#ith ==.C< up annually. 1n >;;C. its export ,alue #as -"D CD4 mil increasing 3>.C< in compared #ith >;;@ and reached DDC -"D mil in >;;D and -"D A@A mil in >;;A.

T"ble (3'79 T/e g!owt/ !"te o: tot"l :2 /e!2e e;0o!ted 6"l1e Item Exported ,olume &tons' /ro#th rate &times' Exported ,alue &mill -"D' /ro#th rate &times' '.*4 3.D34 > >>.= >.4 '.*3?.A44 ;.> ;4.4 D.; '..4 ?;.==3 >A.> 34@.4 >A.> '..>3D.D44 ?C.; @@4.> ?A.D '.., >AD.A@4 C;.> DDC.4 CA.C '..* 344.444 D=.@ A@A.4 D@.;

Source: 0ini#try o %i#herie#, 1999

4.3=.>.3 Exporting mar%et Exporting mar%et #as expended into @C countries and regions o,er the #orld. Japanese mar%et is the biggest one #ith @4< of total export ,alue of *ietnamese fisheries industry. :an%ed at the second and the third. E- and )orth America mar%ets tend to expend. 2ypically fisheries trading acti,ity include export and import. #hile *ietnamese fisheries mar%et is only export #ith limited importing canned products. 2here are about 3@4 foreign trading partners in fisheries tradingL ho#e,er. there is limited number of 8oint ,entures. Most of the foreign partners transact about -"D 3mil annually. numbers of @9>4 or more than >> mil of -"D trading partners are rarely. 1n trading relationship #ith *ietnam. foreign partners are acti,e in information. mar%et. prices. capital and technology. #hile *ietnamese are passi,e and dependent on them. 4.3=.>.= Exported products Quantity: 2otal export ,olume in >;;4 #as ?;.==3 tons and increased to >3D.D44 tons in >;;@. >@4.@44 tons in >;;C. and >AD.A@4 tons in >;;D. Annual gro#th rate #as =?< in the period from >;;4 to >;;@ and 3@< from >;;C to >;;D Structure: 2here #as a changing 1n >;;49>;;@ period. though shrimp #as a strategic product and its exported ,ale #as double. its rate in fisheries #as reduced from D?.C< to C><. ish and other fisheries #ere gro#n up in both relati,e and absolute number. 1n the period from >;;C to >;;D. ho#e,er. the change #as highline. 1ced shrimp #as =A.D@< #hile other fisheries #ere increasing such as iced squid and iced fish up to CC.?< and CD< in >;;D in compare #ith >;;@. 2hough the shrimp rate reduced. its yield increased A3< from ?4.444 tons in >;;> to D3.A44 tons in >;;D.

2he changing tentati,e sho#ed the priority in export structure for example A4< to ;4< of exploited shrimp and squid sources. and other especial fisheries #ere exploited. Ho#e,er. fish exporting has been limited since >;;A. it landed >.? mill tons but only exported >44.444 tons T"ble (3'(9 P!o0o!t2on 2n :2 /e!8 e;0o!ted 0!od1ct

'..' 7utput +roportio &tons' n &<' 2otal exported &tons' C?.D44 >44.4 1ced shrimp ?4.444 C>.A 1ced squid ?.@44 D.4 ish >>.>>4 >D.3 Dried cuttle fish ?.>44 C.= 7thers @.444 D.D Source: 0ini#try o %i#herie#, 1999 Item

'..7utput +roportio &tons' n &<' >3D.D44 >44.4 CC.@44 @3.> >>.=44 A.; =>.?44 3?.C ?.444 =.> >?.@44 >>.?

'.., 7utput +roportion &tons' &<' >AD.@44 >44.4 D3.A44 =A.A >A.A44 >4.4 ?;.344 3C.3 C.444 =.3 ?>.4@4 3>.;

43+73+ Dome t2c m"!ket

2he domestic consumption increased from @@>.AC4 tons in >;A4 to >.4;= mil tons in >;;@ and >.3 mil tons in >;;A. 2he structure bet#een fresh and processed products #as changing. 2he fresh products reduced from D3< in >;;4 to C4.A@< and @4< in >;;@ and >;;A. 2he a,erage consumption excluding exported ,olume #as >4.3%g0people0year and this number increased to >?.? and >@.@%g0people0year in >;;@ and >;;A. 2his a,erage is lo#er than in other Asian countries such as MalaysiaG =;.?%g. 2hailandG >;.@%g. and 1ndonesiaG >@.;%g. "ince the fisheries processing is different in the regions. the a,erage consumption per capita differsG ?.3%g0person0year at :ed :i,er delta. =>.A%g0person0year at Central coastal area. =@.D %g0person0year at Me%ong :i,er delta. and only >.A%g0person0year at )orthern mountainous and high lands areas. 2he *ietnamese people ha,e a habit of eating fish and fishery products. #hich are among the preferred food items in their diet. Domestic mar%et is expanding. either purchasing po#er increases rapidly. 2he mar%et is li%ely to #itness a gradually gro#ing sophistication to#ards differentiated and higher ,alue products &2able ?.33'

T"ble (3'-9 P!o0o!t2on 2n dome t2c con 1m0t2on o: :2 /e!8 0!od1ct Item ish sauce &<' Dried product &<' ish po#der &<' "alted product &<' 1ced product &<' resh product &<' Source: 0ini#try o %i#herie#, 1999 '..' >3.4 >.@ >>.? 4.@ =.4 D3.4 '..>@.4 ?.C A.> 4.? >>.? C4.;

43+737 #oncl1 2on

Exported sector is mainly based on natural resource exploitation. 2he culture in,estment is too small to meet mar%et demand. Material supply for export processing factories is so

#0

unstable. 2here is not a strategic plan for inter9lin%ages bet#een culture. process. and selling stage. 2he processors and exporters are separated from farmers. "o. they do not pay attention to support farmer on technological transfer. post9har,est storing. and product pricing. E,en though there are progresses in product di,ersification. the lo# ,alue added product is still high in total &A3.@<'. 2his limits the competiti,e capacity of *ietnamese companies in global mar%et. 2he old processing technologies ha,e strongly affected the exported product quality. 1n >;;C. =4 factories out of total >D4 *ietnamese factories #ere allo#ed to export to European mar%et. 1n >;;A this number. ho#e,er. #as reduced to >; factories. 2his is obser,ed that the quality of exported product &including pac%age and brand name' is still far behind the requirements in export mar%ets. Lac% of an effecti,e mar%et information system. 2here is little ,ariety for domestic consumption. 2here are not many products that ha,e high ,alue for metropolitan consumption. isheries cannot meet the lo# price requirement of mountainous area because of the high transportation cost. 2here are ad,antages on close distance and same taste. #hich is useful for penetrating Chinese mar%et. 2here is perspecti,e for entering -" mar%et. #hich are fa,oring the pacific catfish. 2his %ind of fish can be artificially hatchery in *ietnam.

#1

#/"0te! -

St!"teg2c 2n:o!m"t2on "nd !ecommend"t2on

43+( S1mm"!8 o: "n"l8 2

!e can summari$e the internal strengths. #ea%nesses as #ell as external opportunities and threats of fisheries industry as follo#s Strength# /radually become acti,e in production and familiar #ith global competiti,e en,ironment. Adequate resources &human. natural resourcesN' for further de,elopment.

Wea(ne##e# 2here are still an unbalance in de,elopment among the sub9sectors Lac%ing capital in,estment as #ell as the effecti,e mechanism for direct and e,aluate in,estments. Lo# le,el of application technology. !ea%nesses of supported registration and infrastructure.

7pportunitie# Economic reco,ery of traditional mar%et. Emergence of *ietnamese fisheries in ne# mar%et

'hreat :eleasing of import barriers #hen it 8oints in the regional economic arrangement. +roduct quality decreasing resulted from mass production.

43+- De6elo0ment t!"teg8 :o!m1l"t2on

Based on the industry and "!72 analysis. it is recommended to ha,e a de,elopment strategy for *ietnamese fisheries industry as follo#sG %or i#hery capture an! a,uacultureG 2he main focus should be paid to boosting the supply and a,ailability of fishery production. 2his can be done though the sub ob8ecti,esG

#2

1ncrease fish exploitation from offshore sources Maintain current le,els of fish production from coastal sources. #hile see%ing to increase the quality and ,alue of this source. "ustain and increase the production from brac%ish #ater capture fisheries.

Ho#e,er. sustainable increase in fish supply should be delegated to fisheries aquaculture and farming sectors. not for capture fisheries. or supporting the aquaculture sector. it should be concentrated on the increasing and utili$ation of potential #ater areas. integrating aquaculture and agriculture farming systems. and ensuring free disease brood stoc%. %or proce##ing #ector: De,elopment strategy should focus on utili$ing production capacity and increasing ,alue of fish products. 2his mission can be achie,ed through sub9ob8ecti,esG :eno,ating the existing processing factories Applying ne# and appropriated processing technologies. 1ntegrating customers into production process. 1ncreasing le,els of ,alue added and quality. Adequately guaranteeing material supply and mar%et demand through integrating the efforts of producer. processors. and traders to sol,e the interdisciplinary issues.

%or mar(eting an! tra!ing: 2he strategy focuses on increasing competiti,e and mar%eting channelsE capacity as #ell as mar%et de,elopment. 2his can be achie,ed throughG 2ransforming traditional fish trade system to competiti,e auction system. reeing mar%et information flo#. De,elop and extract ne# mar%et. Building up the bac%#ard lin%ages.

1n general. strategy should be focus on strengthening inter industry lin%ages.

43+< Recommend"t2on 43+<3' F2 /e!2e e;0lo2t2ng

Any expansion into offshore fisheries should be carried out in gradual phrased manner. starting by deploying se,eral pre9in,estment sur,eys. 2he purpose of this sur,ey is to establish the financially and economically ,iable of offshore fisheries using the existing fleet of ,essels. 2he sur,ey #ill also aim at establishing the technical ,iability and limitations of the existing fleet. and identifying #hat configurations are needed for the future.

#3

2hen. based on the experience gained. effort #ill be made to de,elop or adapt domestic types of ,essels that are more suitable for fishing offshore than the existing ones. Ho#e,er. any future in,estment in offshore fisheries #ill be carried out by the commercial sector. "uch in,estments #ill sub8ect to licensing by the fisheries authorities. 2he issuance of licenses #ill obey to rigid financial. economic. and social e,aluations and assessments. /o,ernment should collect. analy$e and disseminate data obtained from the fisheries. aquaculture and the habitat to monitor and e,aluate the state of fish stoc%s and le,el of exploitation. 2here should be deep natural resource sur,eys. #hich can be used as a guideline to manage and direct fisheries exploiting acti,ities. 2his also helps to ad8ust the fishing structure. #hich can result in impro,ement of producti,ity. Based on sur,eys and assessments. ministry #ill issue recommendations and guidelines for resource use and management. 2hese might include the introduction of close seasons. the prohibition of destructi,e fishing gears. and a number of other management actions. 2he implementation of a reno,ated fisheries management system should follo# the economic reno,ation process to ensure consistency bet#een the macroeconomic and the fisheries sector administrati,e and legal frame#or%s. Close coordination #ith the different agencies of go,ernment and the different economic units should be maintained. 1n coastal capture fisheries. strategic focus #ill be put on ensuring the current le,els of production #hile see%ing to increase the ,alue of that production. 2hese strategies #ill be supported by a concerted effort to strengthen the management and regulation of coastal fisheries. #hich ensure that fish and shrimps are har,ested at the optimal economic and biological le,els. Efforts. through the establishment of appropriate infrastructure. #ill also be put on reducing the amount of fish lost after har,est during transportation and handling. +resent post har,est losses are ,ariously estimated in a range as high or higher than 34<. depending on area and remoteness. 2hese efforts are expected to contribute significantly to the supply of additional ra# materials. in particular to processing industry that ser,es the domestic mar%et. :e,ie# and amend legislation. decrees and instructions are related to the sustainable management of the rene#able aquatic resources so that it can lead to successful achie,ement of conser,ation and management ob8ecti,es.

43+<3+ AA1"c1lt1!e
2he ministry of fisheries. in consultation and cooperation #ith other rele,ant go,ernment agencies. should ensure implementation of the special conditions and requirements that are adequately reflected in the administrati,e and legal systems. 2hese #ill include the granting of long term leases. measures to secure adequate #ater supplies. the allocation of marginal agricultural lands to fishery aquaculture. 2he different research institutes and extension ser,ices of ministry should be mobili$ed to carry out rele,ant applied research and de,elopment. and dissemination of results of this #or% to aquaculture. 2hese #ill include research to adapt ne# and impro,ed technologies. impro,ement of aquaculture operations that emphasi$ed on financial and economic factors. 2echnologies for the de,elopment of speciali$ed types of aquaculture should also be de,eloped and perfected.

"pecial emphasis and efforts #ill be put on de,eloping appropriate technologies to support an expansion of aquaculture from fresh and brac%ish #ater into marine habitats. 1t is recogni$ed that the countryEs largest potential for expanding aquaculture lies in utili$ing the high producti,ity of marine habitats. 2hese #ill include the deli,ery of technologies and support to the establishment of integrated coastal area de,elopment pro8ects. All de,elopment efforts #ill be mar%et dri,en. Expansion of aquaculture acti,ities #ill first focus on supplying the e,er9increasing domestic mar%et for fishery products. Efforts #ill then be put on directing the industry de,elopment to specialty mar%ets #ith potentially higher returns. Ho#e,er. all commercially oriented acti,ities #ill be carried out by the commercial sectors. 2he aquaculture di,isions of the Ministry need to be dedicated to supporting the de,elopment of the commercial aquaculture sector. "pecial efforts should be made to#ards promoting pri,ate sector in,estments in order to de,elop the aquaculture sector. 2his #ill include the promotion of commercial in,estments in speciali$ed hatchery to co,er the e,er9increasing demands for fish seed and shrimp lar,ae. 2he Ministry should consider the pri,ati$ation of present public hatcheries. !hile di,esting public hatcheries and seed supplies to pri,ate sector. quality standards should be established to ensure the generic quality and health of brood stoc%s used in hatcheries. "tandards #ill also be set for shrimp lar,ae and fish fingerlings to ensure that they are disease free. Efforts should be ta%en to encourage the commercial sector to in,est in feed manufacture. 2hese might also include di,estment of public sector facilities and plants to commercial enterprises. 2he emphasis #ill be put on high quality. efficiency and competiti,e pricing. 2he ra# materials for aquaculture feeds can be dra#n from plentiful trash fish supplies and local agricultural crops. "imilar sentiments and strategies also apply to other sectors in,ol,ed in businesses supporting the aquaculture industry. such as ,accines. diagnostic ser,ices and equipment manufacturer and suppliers. 1n aquaculture. strategic focus should be put on supporting technological and operational ad,ancement to impro,e the quality and ,alue of farmed ra# materials. Emphasis #ill also be put on supporting the farming of high ,alue species and on extending the areas under aquaculture. "pecial emphasis #ill support the increasing in production and producti,ity of existing systems. especially the brac%ish #ater shrimp farming. and the introduction of large scale marine aquaculture for desirable species.

43+<37 P!oce

2ng

Establishing a legal and administrati,e frame#or% that clears on the rights and obligations of the processing industry. 2hese #ill include a system for license the construction of ne# processing plant. 2his is employed to ensure that a balance exists bet#een national needs and prospects. "uch licensing systems #ill basically be limiting in scope to ensure that processing plants are sensibly located from geographical point of ,ie#. that there is consistency bet#een plant capacities and the potential for ra# materials. 2he regulatory frame#or%s #ill also be administered to#ard ensuring the reasonable competition exists and that ra# material producers ha,e alternati,e outlets for their produce. 2he licensing of processing plants #ill be carried out by central authorities to a,oid fa,oritism and preferential treatments.

##

2o encourage product differentiation and increasing ,alue added. the go,ernment should support the de,elopment and dissemination of alternati,e product technologies and methods. Both the export oriented and the domestic processing industry #ill be targeted. A special emphasis #ill be put on impro,ing the traditional types of processing that ser,e the domestic mar%ets. Because of the large quantity absorbed on that mar%et and the currently lo# le,els of technology applied. it is belie,ed that the gains can be quite substantial. 2he go,ernment should ensure ,iability and dynamism of the processing sector by promoting ne# processing methods. 1t #ill support the establishment of ne# businesses by identifying industry and processing needs. ma%e these needs %no#n and then steer the establishment of desired business through business licensing systems. 2hese might include the brea%ing up of large public sector ,entures into smaller units that are #ithin the in,estment capabilities of the commercial sector. Carrying out a comprehensi,e study to thoroughly assess the economic and financial ,iability of the current state o#n processing enterprises. 2his #ill include detailed technical. economic and financial assessments of indi,idual plants for determining their ,iability. Assessments #ill also include detailed assessments of the future potential of the plants. their prospects to obtain the necessary ra# materials and their prospects for domestic and export sales. Based on these assessments. processing plants #ill be ran%ed. +riority plants #ill be identified for operational and managerial rehabilitation. +lans for the closure of non9,iable plants #ill be #or%ed out. including compensation to employees #ho might be laid off. /o,ernment supports a gradual commerciali$ation of processing sector through e,aluation and establishment of commercial accounting and operation procedures. A comprehensi,e program for training senior and middle le,el managers of mar%et oriented companies should be implemented for supporting purpose. Maintenance the quality standards throughG Continued impro,ements to the policies. plans and standards on product quality and hygiene Continuing the impro,ements and expansion of inspection quality control of processing plants and mar%eting facilities. Carrying out certification of fish processing and mar%eting facilities. Continue the issuance of quality and hygiene certificates for fish products in compliance #ith the required standard for export and for domestic consumption. 1mplementation a comprehensi,e program of training courses. technical instruction on quality control. quality impro,ements hygiene and so on for fish processors and traders

2he abo,e acti,ities #ill be incorporated into the administrati,e procedures for the licensing of processing plants. fish traders and so on. 2heir compliance #ith )A 1F-ACE) standards #ill be a precondition for maintaining licenses.

#&

43+<3( M"!ket2ng "nd t!"de

1t is better if go,ernment can support mar%et expanding and penetration by applying policies such asG :educe and release export tax on some special exported goods. #hich can globally compete. :educe and simples the custom clearances for fishery exporting and de,elop supporti,e industries. Collect and establish a mar%et information database. 2his can be done by countryEs commercial representati,es. A fishery association #ould be strengthened to due #ith this responsibility. E,en though a li%e#ise association #ere established. it seems that it #as ineffecti,ely operated. 2he operation of this association should be focused on communication and consultant on fishery operation and in,estment rather than only holding exhibitions as at present. "upport the ra# material supply for export processing sector through de,eloping of aquaculture sector. Create a special stabili$ing fund to compensate the price fluctuation. 2his fund can be soured from export tax and other contributions of fishery export companies. 1n the fa,oring case. these companies had to contribute to stabili$ing fund based on their export ,alue. !hen there are a strong distortion in export mar%et. these companies can recei,e the benefit form that fund. 2his fun can be built up by go,ernment as #ell as outsoured to insurance organi$ations. "tabili$e the exchange rate. monetary and financial policies. 2his is supported by the stabili$ing fund in this industry. Joint in the multilateral and bilateral agreements in fisheries field to protect the export companies from losses related to lac%ing of internationally legal system and create the initial condition for mar%et expanding and penetration. De,elop infrastructure and legislation conditions to support e9commerce application. 2his is useful for promoting *ietnamese fishery product in global mar%et. and mar%et information transferring. Another strategic element is to see% further liberali$ation of the trade in machinery and equipment.

43+<3- S100o!t26e 2nd1 t!8

2o support the effecti,e functioning and establishment of processing facilities the go,ernment #ill see% to ensure that the necessary infrastructures are a,ailable. 2hese #ill include the construction. operation and maintenance of fishing harbors and landing places #ith efficient fish handling facilities. fishery industrial estates and the supporti,e infrastructure facilities. #hich also aimed at human resources de,elopment and technology enhancement ishing harbors #ill be established in places #here there are concentrations of fishing ,essels and #here the potentials for fish landings. 2he establishment of such infrastructures

#(

#ill be based on the carrying out of detail economic. financial and social economic assessments to prioriti$e specific sites and to ensure economic and financial return. A %ey feature of the strategy for establishing fishing harbors is that industrial estates are established in close association #ith the harbors to accommodate fish trading. ser,icing industries and processing plants. 1ndustrial estates #ill include the necessary po#er. #ater. roads and #aste#ater treatment plants. 2he go,ernment should support the establishment of sheltered structures #here fish trading and transactions can ta%e place. 2hese #ill include the introduction and establishment of competiti,e auction systems for fish trading.

43+<3< Gene!"l
/o,ernment should ensure full coordination bet#een the state. pro,incial. district and local le,els in all matters and decisions concerning management and use of the aquatic resources. 1t is also to delegate responsibility for carrying out fisheries management policies and programs. controlling the amount of fishing effort. and protecting nursery and other closed areas. -nder such a arrangement. the Ministry of isheries #ould ha,e the responsibility to pro,ide local technical ad,ice and support from its experts. to monitor the performance of local fisheries management. and ensure that agreed decisions and actions concerning conser,ation of the aquatic resources are carried out promptly and fairly /o,ernment should de,elop an effecti,e and efficient national aquatic resources data and statistics system. 2his is useful to support management of the natural resources. support policy and planning analysis and decision ma%ing at both go,ernment and pri,ate sectors. support community planning and de,elopment. and support domestic mar%eting and export acti,ities.

#*

#/"0te! <

#oncl1 2on
2he main ob8ecti,e of this research is to formulate a de,elopment strategy for *ietnamese fisheries industry basing on the analysis of strengths and #ea%nesses as #ell as the internal lin%ages of the industry. isheries industry can be classified into four sectors are fishery capture. aquaculture. processing. trading and supporti,e sectors. or each sector pros and cons. these ha,e been pointed out through applying the "!72 analysis. +orterEs models and the opinions of experts from different le,els in *ietnamese fisheries industry. -p to this point. it is confident to say that *ietnamese fisheries industry has potential competiti,e ad,antages for de,elopment. Ho#e,er. it is also belie,ed that the natural fish stoc%s in *ietnamese coastal and 8urisdiction area are nearly exploited up to their biological threshold. 2here should be an action to rationali$e the de,elopment of fishing ,essel fleets that can affect the substantial of natural resource as #ell as to maximi$e the fishing ,alue. ishery aquaculture de,elopment emerged as a choice to #arranting ra# material supply for o,er capitali$ation processing sector. 1nter9industry lin%ages as #ell as the go,ernment role on de,elopment direction and supporting are lac%ing. 1n conclusion. it is suggested arrays of policies and regulations for strengthen competition of fisheries industry. 2hese suggestions are mainly focused on industry internal lin%ages and the rational exploitation of natural resources. Ho#e,er. technological transferring and applying issues can be further researched to support the decision ma%ing in implement this strategy. inally. the research has de,eloped systematic solutions for impro,ing the demonstration of fisheries industry. 1t seems that the research can become a direction guideline and benefit to the industry management and monitoring acti,ities.

#,