Le Xuan Thinh, manager of establishing a 'Sustainable Pangasius Supply Chain in Vietnam' (SUPA) project and deputy director of the Vietnam Cleaner Production Centre (VNCPC), says he is pinning “high hopes” on developing a sustainable industry in Vietnam, thanks, in part, to help from the European Union (EU).

Progress for the industry has not always been so consistent. According to Thinh, the Pangasius industry’s development has been somewhat erratic and has faced instability in terms of pricing. It has also faced the challenges of declining revenue and low value added product that consumes large quantities of electricity and water. The industry has also had an adverse impact on the environment.

However, despite the challenges, the Vietnamese Pangasius industry has shown remarkable growth, with great potential and opportunities at home and abroad. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), these developments have provided a major boost to the country’s economic development, especially in the economic restructuring of the Mekong Delta.

As such, Pangasius is considered a key farming commodity, and has attracted special attention from the Government.  Pangasius has become the key Vietnamese seafood export, with total output increasing from 37,500 tons to 1.12 million tons in the period 2000-2012. According to VASEP, Pangasius has a total export value of US$1.7 billion. It is currently being exported to 142 countries worldwide.

The output of the industry is expected to increase to 2 million tons by 2020.

In addition, says VASEP, the nation has 136 businesses exporting Pangasius, including 64 processing enterprises and 72 commercial companies in the Mekong Delta region.

However, according to the Ministry of Agriculture and Rural Development, in November 2013, the Mekong Delta region suffered a 13% decrease compared to the same period in 2012, and had harvested a total of 1 million tons, a 3% drop. In 2013, the export value of Pangasius reached €1.55 billion (US$1.76 billion), a minimal rise from the 2012 figure.

The slump left many businesses bankrupt, while a large number of farmers either stopped production or sought other employment.

In terms of the EU market, the export value of Vietnamese Pangasius decreased from €514 million (US$581 million) in 2008 to €376 Million (US$425 million) in 2012 with market share of Vietnamese Pangasius products dropping from 48% in 2007 to 24.4% in 2012. In 2013, Pangasius exports to the EU market dropped further to €340 million (US$385.4 million), 19.1% lower than the same period in 2012.

Moreover, consumers, suppliers, environmental NGOs and the Vietnamese government are concerned about the negative impacts of Pangasius farms and processing plants on the environment, as well as the economic sustainability of the industry.

In order to improve the quality of Pangasius production and to raise opportunities for the product on the global market, the VNCPC, VASEP, and other partners launched the SUPA project in 2013 with support from the EU.

The project is valued at €2.4 million, of which the EU finances 80%, or €1.9 million, under the EU SWITCH-Asia Programme. The project is being carried out by the VNCPC (Vietnam Cleaner Production Centre), in collaboration with VASEP (Vietnam Association of Seafood Exporters and Producers), WWF-Vietnam and WWF-Austria.

"The project intends to improve the competitiveness of Vietnam’s Pangasius industry in the global market,” said former Development Counsellor of the EU Delegation to Vietnam, Bérénice Muraille, at the project launch on August 2, 2013. “Through this project, the EU directly supports the entire Pangasius supply chain, from hatcheries, feed producers and processors in Vietnam, to traders and end users, including customers in the EU, which is the largest market for Vietnam's Pangasius exports."

Local Pangasius producers, processors and exporters believe that the EU technical support has allowed domestic suppliers to reach international standards in production, processing and export activities, including receiving the Aquaculture Stewardship Council (ASC) Certificate and the Global GAP, for their sustainable development.

“They did market research in Europe and shared the information with Vietnamese enterprises,” Thinh said. “The project’s experts have been providing support on how to apply efficient and cleaner production techniques at enterprises to cut down on production costs for energy, water and wastewater, to reduce the pollution and ensure sustainable development.”

Beneficiary Nguyen Thi Ngoc Quyen, from the Hung Vuong Joint Stock Company’s Quality Management Division, added that “under the SUPA project, the company has had consultations with experts to help save energy, reduce the processing costs and improve the competitiveness of the company’s products.”

According to Nguyen Huu Nguyen, the head of the Chau Phu Seafood Cooperative in An Giang Province, farmers have received extensive support from the SUPA project.

“Experts from the SUPA project have provided technical support with Pangasius production and given farmers guidance on keeping records in a production diary so that the origin of the fish can easily be identified.”

This helps ensure the protection of the fish in the EU and improves the potential to achieve  premium prices for the product, which will directly benefit Vietnamese producers. It is a clear example of the potential offered by the Protected Designation of Origin (PDO) system to Vietnamese products.

The project, which runs for three years from 2013 until 2017, focuses on capacity building, and the promotion of responsible production.

It also supports information exchanges and techniques that households and small- and medium-sized enterprises (SMEs) can apply in accordance with the current global standards of sustainable production, which will eventually increase the competitiveness of Vietnamese Pangasius on the world market, Thinh said.

It is expected that at least 50% of SMEs involved will provide sustainable products compliant with ASC standards for the EU and other markets.

By the time the project is completed, at least 70% of the medium to large producing and processing enterprises, along with 30% of the feed producers and small, independent production companies, are expected to be actively engaged in RE-CP.