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Minh Phu to scale up Vietnam's shrimp industry

The shrimp giant aims to help small-scale producers across the country to more than double their shrimp output.

Vietnamese shrimp giant Minh Phu is working with 20,000 small-scale farmers in a new initiative that could help them double or triple production to reach anywhere between 30,000-60,000 metric tons.

Minh Phu, which produced 78,4455 metric tons of shrimp in its own farms in 2018 and owns two processing plants, also outsources some volumes from local farmers, who produce roughly 18,000 metric tons in total annually.

However, this yield is relatively low because of the low survival rate per hectare, Minh Phu Chairman to the Board Le Van Quang told IntraFish.

The current yield for small-scale farmers is around 200-300 kilograms per hectare, which Minh Phu believes can get up to 500-1,000 kilograms with proper training within the next five years.

The farms are located in Ca Mau, a province in southern Vietnam, among mangrove forests, which also means they require very strong quality post-larvae in order to get to the production rate they are targeting.

As part of the project, Minh Phu is also looking to partner with post-larvae producers to supply the farmers.

Industry fragmentation gets in the way of traceability

Quang hopes that this initiative will improve the sustainability of shrimp farming in Vietnam.

"The farmers own the land, even if they are very small, between three to five hectares, so it is difficult to achieve traceability," Quang said. "Doing it one by one can be very complicated and takes a lot of resources and money."

Minh Phu has partnered with Monterey Bay's Seafood Watch and auditing company SGS to use a new model that emphasizes a region-based approach to sustainability certification, which allows for easier and quicker scale in areas that have smaller farming operations.

The project has been in discussions for about three years. The major barrier has been adapting to government regulations, which have made a social enterprise model complicated due to the amount of documentation that comes with working with multiple stakeholders and hundreds of farmers. They are currently exploring ways to address these limitations.

Minh Phu also recently struck a $150 million (€133.6 million) deal with Mitsui for a 35 percent stake in the company, which it said will be invested in expanding current farming operations and increasing product capacity. A new factory may be in the works, but nothing has been confirmed yet, Quang said.

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