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Letter to Shareholders Print E-mail

Dear Valued Shareholders,

As you may know, the global economic crisis starting from the end of 2008 had strongly affected Vietnam aquatic product export which included NAVICO’s pangasius export. In 2009, Vietnam aquatic export was reported at 1,216 thousand tons (98% in compare with previous year) and the export turnover was at 4,251 million USD (94% in compare with previous year). Specifically for the pangasius products, export quantity reached 607 thousand tons (95% in compare with previous year) and export turnover stayed at 1,343 million USD (89% in compare with previous year).

During the storm of the global financial downturn, NAVICO is negatively affected due to the decreased orders from our customers. The company’s export merely reached 46 thousand tons (67% in compare with previous year) with export turnover of 85 million USD (45% in compare with previous year). Our financial report showed a record loss of 176 billion VND.

NAVICO’s burden was initiated from its decision to buy and stock a large quantity of over-grown fishes to support the Vietnam government request to save the local farmers from financial insolvency. Secondly, NAVICO lost its Russian market during the second half of 2008 which was the biggest contributor of NAVICO export turnover. On top of that, the global crisis added unprecedented pressure in product distribution on the world market. The severe decrease in our production led to sharp increase in costs and, inevitably, a financial loss record.

The beginning of 2010 has exposed some positive market elements to lessen our difficulties. The world market showed relatively weak signs of recovery. Our market orders increased but not at a strong pace. The export price went up, even though still not at the same speed with the increasing price of raw materials. NAVICO also continued its policy to choose reliable customers with low-risked payment term to ensure its debt collectability.

NAVICO’s advantage in 2010 stemmed from our strategic adjustment to manage production costs, to lower product price and to increase our competitiveness in order to overcome current difficulties. Our stocked inventory was eliminated and no longer a burden to the operation. NAVICO currently focuses on expansion and diversification to diminish market concentration. Our main market in 2010 will be the Eastern European, the Middle East, the South American and the Asian market.

NAVICO also aims for industry diversification to reduce market risks and to achieve operational synergy. Our Ferrochrome production project will be in operation starting from the 4th quarter of 2010 and will become a major contribution in the company’s revenue stream in 2011. We will keep contributing in the DAP production factory’s 29% ordinance capital as planned; this factory will be in operation in 2013.

Past year’s difficulties and obstacles will pass with time while new opportunities and advantages are waiting to be realized. NAVICO’s directors, staffs and workers will strive with high determination to regain our historical strength.

On behalf of the NAVICO’s Board of Directors and Managing Directors, we send all valued shareholders, all staffs and families best wishes, happiness and prosperity.

Best regards,