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Production capacity at seafood processing plants has been cut by more than half. Photo: T.J

Reducing power by more than a half

Reporting on the operation of seafood firms in the conditions of applying Directive 16 in HCM City and eighteen southern provinces, VASEP said that seafood firms have joined hands with the Government to implement strictly regulations to both fight the pandemic and maintain production. However, many difficulties and inadequacies have arisen, greatly affecting the safety of pandemic prevention and control as well as efforts to maintain production and export.

At present, only about 30% of seafood firms in the southern provinces can ensure the "three on the spot" condition. Firms that are not qualified to do so have had to stop production, leading to several consequences, such as: bank debt, debt to suppliers, loss of customers and the risk of not being able to mobilise workers after the lockdown.

With factories that can perform "three on-site", the number of workers that can be mobilised is only 30-50% of the number of employees, the rest have to quit or take unpaid leave. Average production capacity has been reduced to only 40-50% compared to before. It is estimated the overall capacity of the whole area will decrease to only 30-40%.

Aquatic raw materials mobilised for processing and export reach about 40-50% compared to external sources due to social distancing. VASEP estimates that there will be a 20-30% shortage of raw materials for export production in the final months of the year, due to reduced exploitation, reduced stocking of breeding stock and reduced import sources. Along with that, materials, auxiliary materials and packaging for seafood processing also shrunk, cutting supply capacity by 50%.

While production is reduced, many orders have to be delayed or lost, the costs for businesses to ensure "three on-site" have skyrocketed and are creating great pressure, like weekly testing costs, the cost of equipping workers with conditions for eating, sleeping and working at the factory increased by 50-100%, the cost of paying extra wages for workers to stay at the factory increased by 30-50%, paying wages and supporting employees to quit, the cost of packaging and materials increased, the cost of electricity to produce and maintain cold storage, especially at this time when businesses are facing many difficulties due to the constantly increasing shipping charges, leading to a very high increase in overall cost of production, while the efficiency of production and business decreased.

Proposals to remove obstacles for businesses

Firms said that the implementation of "three on the spot" is only a temporary measure in a short time and can only last from two to three weeks for medium firms, larger firms also maintain for up to 4-5 weeks because businesses have to bear too many expenses to ensure the production chain and to implement anti-pandemic regulations at the factory. Not to mention the obvious consequences that are the risk of losing a trained workforce, making production recovery plans tougher, the risks that workers in the "three-on-the-spot" factory may be infected with Covid-19 if control screening is not good.

The motto "one road - two locations" also has many shortcomings when localities are still rigid in determining two locations to be controlled, or require workers to be gathered at one point and company vehicles have to pick up the factory - this causes many difficulties for businesses when workers are in many different places and have to move to the common gathering point, but the shuttle bus is limited, while the number of workers on the bus is limited. must also ensure no more than 50% of the seats. Meanwhile, the results of Vietnam's seafood export in the first six months of 2021 achieved very positive results by taking advantage of the high consumption demand of other countries, a number of seafood exporting countries competed with Vietnam is severely affected by Covid-19.

The spread of Covid-19 and the application of Directive 16 in HCM City and the Mekong Delta provinces will significantly affect seafood exports. From the actual difficulties of seafood firms, VASEP reported and recommended to the Prime Minister several contents to restore production and supply chain.

VASEP proposed the Prime Minister direct local authorities to act together with businesses and business associations to deploy the existing support packages of the Government; have priority policies on reducing interest rates on bank loans, reducing electricity bills by 30% until at least the end of 2021, proposing to slash the contribution rate of union dues from 2% of salary fund to 1% of salary fund for firms. These are valuable supports for firms to have more support in the current difficult context, to maintain the "three in place" and to have more opportunities and resources for the restoration of production and export.

At the same time, increase the level of support from Social Insurance, Health Insurance, occupational accident and request Social Insurance to pay the salaries and expenses for employees going to quarantine due to the Covid-19 pandemic according to the request of health authorities. The Government and the Ministry of Information and Communications consider directing not to disclose the name of firms if there is a case of Covid-19 on the media to avoid affecting the operation and image of firms in the current context and production resilience.

In the short term, giving priority to vaccination for production forces and implementing the dual goals with a new focus. In the near future and in the long term, Vietnam's fisheries industry will have to live with the pandemic for a long time, it is necessary to have a set of rules and guidelines for the implementation of "Medical in place".