SAO TA FOODS JOINT STOCK COMPANY

The subject was founded in 1996 as State Owned Enterprise. By 2003, the company was equitized. The stocks of Sao Ta Foods Joint Stock Company have been transacted on HOSE under the symbol FMC since 2006.  Currently, the subject is operating the fields of aquaculture and seafood processing (mainly raising and processing shrimp); Sowing, processing and trading agricultural products.

In recent years, the subject has expanded the scale of the shrimp business, including continuing to expand the farming area and building more high-class shrimp processing factories for the EU strategic market. In 2022, the company completed the acquisition of Vinh Thuan Co., Ltd, which has operated in the field of domestic aquaculture. It was said that the purpose of the acquisition is to expand more than 203 hectares of shrimp farming land to actively raw materials source for production activities, increasing the total farming area to 525 hectares with the ability to supply 16,000 tons of raw shrimp/year. Besides, Sao Ta seafood factory in An Nghiep Industrial Park went into operation on January 12, 2023.

In 2023, in terms of production, the company continued to focus on deeply processed products that still maintained high rankings such as extruded shrimp, fresh and fried breaded shrimp, fresh and boiled loose frozen shrimp, and sushi shrimp. The new shrimp farming area (Vinafarm) started stocking shrimp seeds and exploiting since July 2023. In a situation where the shrimp disease was quite serious, although the farm had damage, it was not large, basically contributing to reducing product costs and increasing the overall operating efficiency of the company. On the other hand, if risks would increase, it could take advantage of good prices from the law of supply and demand. In summary, in 2023, shrimp and processed agricultural products reached 21,198.46 tons and 1,569.07 tons, respectively, equivalent to 96.36% and 78.45% of the plan.

In terms of business, the company faced many difficulties from the general context of the Vietnamese shrimp industry but minimized negative aspects to achieve some impressive achievements. Specifically, in the first half of 2023, although unstable weather conditions (El Nino) were anticipated, unsatisfactory seed factors significantly affected the quality and output of harvested raw shrimp. In addition, demand from major markets such as the USA and EU declined, while Japanese value growth was poor due to exchange rate problems, combined with strong competition from international competitors, causing sales to decline. Consumption in May 2023 was only 70% as the same period, and recovered slightly to 80% as the same period in June 2023. Raw shrimp prices in the first 6 months of 2023 also decreased sharply. Efforts to overcome developments from the second half of that year due to the recovery in consumption trends and cooling inflation have brought the subject enough revenue to overcome the decline in the first months of 2023.

In 2023, in the face of strong supply from other countries such as Ecuador and India causing prices to plummet, the company proactively reduced its market share in the USA and became Vietnam's number one exporter to the Japanese market, continuing to gradually conquer potential markets such as South Korea, Australia, and the EU. FMC's subsidiary - Khang An Foods Joint Stock Company is leading in the UK market with shrimp products and in the Japanese market with agricultural products. Total consolidated sales in 2023 reach USD 200.56 million, equivalent to 97.83% of the 2023 plan.

According to data from the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam's shrimp export turnover in the first 3 months of 2024 is estimated to reach more than USD 620 million, up by 24% over the same period in 2023. In particular, shrimp export turnover to the US market is estimated to increase by 26%, while the Chinese market is estimated to increase by more than 140%. Although shrimp exports in the first quarter showed optimistic signs, according to Mr. Ho Quoc Luc - Chairman of the subject, the difficulties of the Vietnamese shrimp industry have not yet been overcome. At the end of March 2024, the USA Department of Commerce (DOC) issued preliminary conclusions in the anti-subsidy investigation of frozen warm water shrimp originating from Vietnam. Along with that, the risk of raw material shortages continues when currently in many farming areas, farmers are not interested in planting seeds to wait for output prices to increase and input materials to improve. Besides, the cost of shrimp production is too high, making Vietnamese shrimp less competitive in the export market.