Vietnam 'shrimp king' Minh Phu records 35% fall in Q1 profit

Minh Phu Seafood Corporation, Vietnam’s leading shrimp exporter, has reported pre-tax profits of VND24.8 billion ($975,800) in Q1/2024, down 35% year-on-year, despite higher revenues.

Listed on the Ho Chi Minh Stock Exchange as MPC, the company earned revenues of VND1,316 billion ($51.8 million) in the quarter, according to its Q1 financial statement released on April 26.

After suffering losses of VND111 billion ($4.4 million) in 2023, chairman Le Van Quang had informed shareholders that the company had faced many difficulties in production and business. Production, export turnover and revenues had fallen short of set targets by more than 30%, he’d said.

The company management has explained that an outbreak of diseases last year delivered a significant blow to the industry as a whole, and raised further the already high cost of shrimp farming in Vietnam.

Competition from other exporters was another factor. Ecuador's farmed shrimp output of 1.4 million tons in 2023 caused supply to exceed demand, causing prices to plummet to just 50% of farming cost.

In this situation, Minh Phu studied more than 50 innovative shrimp farming methods practiced across the world, tested them and applied MPBiO biological shrimp farming technology.

With this method, no chlorine was needed to treat input water. Instead, biotech applications were used to help cut water treatment chemical costs by more than 95%, electricity costs by 50-70%, and food prices by over 30%, which helped lower farming costs by 30-50%.

This technology has been successfully piloted by Minh Phu and the management believed that it will enable the company to enter a “spectacular” new phase of development, shareholders were told.

Minh Phu intends to produce and export 56,000 tons of shrimp this year, generating VND15,805.8 billion ($621.9 million) in revenue and VND1,021.5 billion (40.2 million) in after-tax profits.

It is hoping that by 2030, the price of Vietnamese raw shrimp will be comparable to that of Ecuador. By 2035, Minh Phu envisages that it will produce 15 billion shrimp seeds utilizing MPBiO technology and become self-sufficient for 50% of raw materials for production, up from the current 10%.