Fishing net producer Siam Brothers Vietnam exerts efforts to surf difficulties

Leading twine and net manufacturer Siam Brother Vietnam has been looking to develop new export markets and multi-purpose rope products since its fishing net segment was hit by the European Commission's (EC) “yellow card” on the Vietnamese fishery industry.

Siam Brothers Vietnam, formerly known as Siam Brothers Vietnam Company Limited, is wholly invested by Thailand’s Siam Brothers Group. The company specializes in manufacturing agricultural and fishing tools and ropes.

When it listed on the Ho Chi Minh Stock Exchange as SBV in 2017, the firm held 40% of the rope market share and was the top choice of more than 90% of Vietnam's offshore fishing fleet.

Its business results from 2013 to 2016 continuously expanded, with revenue growing from VND368 billion to VND508 billion ($20.08 million) and after-tax profit from VND39 billion to VND114 billion ($4.5 million).

The company expected breakthrough business results in 2017 when a new factory was set to go into operation, aimed at raising output by nearly 30%. Demand for SBV's products was also forecast to increase thanks to the government's efforts to modernize the fishing industry.

However, these forecasts did not materialize, and Siam Brothers Vietnam's business results have gradually declined since 2017. Its after-tax profit dropped from hundreds of billions of VND (VND1 billion = $39,535) to several tens of billions, reaching only VND6.7 billion ($264.884) in 2023.

This year, the company is targeting pre-tax profit of VND65 billion ($2.57 million), but in the first quarter it suffered a loss of nearly VND6 billion.

On the stock market, SBV has been moving sideways for nearly two years at around VND10,000 ($0.4) per share, down by half from the time of listing. Its trading volume has plunged to several thousand units per session.

Efforts to overcome difficulties

Domestic fishing ropes are Siam Brothers Vietnam's main products. However, in 2017, Vietnam's fishing industry was tagged “yellow” by the European Commission (EC), and fishing activities took many years to restructure. Since then, the industry has faced common difficulties such as the Covid-19 epidemic, the conflict between Russia and Ukraine, and rising prices of oil, gasoline and gas.

SBV said these things have pushed Vietnam's fishing industry into a sea of difficulties, with many boats left in dry dock due to too high operating costs.

To overcome this, the company has promoted the export of ropes to reduce domestic dependence, while diversifying its products and other fishing equipment. The company said it is restructuring in the direction of gradually increasing its market share of rope products overseas.

The firm approached and was selected by a number of retail supermarkets in the U.S. as a supplier. To prepare to receive orders from these customers, the company plans to invest VND172 billion ($6.8 million) in a new factory with an annual capacity of 6,000 tons of products.

For the first time since 2017, the company plans to offer 6 million shares to existing or new shareholders to raise capital to finance the first phase of the project.

Besides, the company has maintained its traditional fishing market in the hope that the Ministry of Agriculture and Rural Development’s campaign to remove the EC’s “yellow card” is successful.

Siam Brothers Vietnam is also pursuing a new segment: products dedicated to the aquaculture market. The board of directors said that although the traditional aquaculture market is facing many difficulties, the government’s support policies for developing marine aquaculture and fishing equipment are gaining traction.