Vietnam's main farmed fish species pangasius (order Siluriformes) whose processing byproducts, with the introduction of biotechnology such as enzymatic hydrolysis, microbial technology, and spray drying, collagen, fish oil, fish-skin snacks, and seafood-peptide drinks are being turned into high-value-added products. As raw material, fishmeal and fish oil are US$1.2-1.5/kg at most, but collagen products are US$15-20/kg, a value increase of 15-25 times. The 700,000-900,000 tonnes of byproducts generated from annual production of 1.74 million tonnes are being re-valorized in a circular-economy model, a move that also connects to a new category of exports to Japan. Vietnam Agriculture & Environment We organize the feature on
News detail: injecting technology into byproducts that make up 60-70% of the raw material
Vietnam's pangasius industry recorded total production of 1.74 million tonnes in 2025, maintaining its position as one of the world's largest white-fish farming countries. However, the edible portion taken out in fillet processing is only 30-40% of the whole, with the remaining 60-70% (700,000-900,000 tonnes) as byproducts left over. Until now processing into fishmeal, fish oil, and animal feed was central, and the added value was minimal.
The new trend VnAgri reports is the full-scale commercialization of technologies that convert byproducts into high-value-added products. Specifically, the following technology groups are in operation.
- Biotechnology and enzymatic hydrolysis: breaking down protein into functional peptides
- Microbial technology: using byproducts as a fermentation substrate
- Spray drying and freeze drying: improving transport and shelf life through powdering
- Deep processing and modern preservation: enabling the distribution of high-value-added products
- Circular production model: separating waste by stream and reusing it
Background: a shift from basic processing to deep processing
The expert Dr. Bui Thi Thu Hien points out, "The unavoidable direction of the pangasius industry is a shift from basic processing to deep processing, and the development of value-added products under a circular-economy model." Until now the pangasius industry has been a "volume type" competing on the export quantity of frozen fillets, but in response to US and EU import restrictions and tariff reviews, a structural shift to a value-added type is advancing.
A similar move is the 2,300% increase in tilapia exports to the Middle East seen as well. The development from mere farmed-fish exports to processed products and functional materials is proceeding simultaneously as a paradigm shift for Vietnam's fisheries as a whole.
Main product categories of pangasius byproducts
| Category | Main products | Use and market |
|---|---|---|
| Food and beverages | Fish-skin snacks, collagen products, fish-stomach products, fish-swim-bladder dishes, fish cakes, surimi, and sausages | Southeast Asian and East Asian food-ingredient markets |
| Functional beverages | Peptide-blended nutritional drinks | Health-conscious consumers, seniors |
| Pate products | Pate from fish liver and belly meat | European and North American gourmet markets |
| Pharmaceuticals and cosmetics | Gelatin, hydrolyzed protein, bioactive peptides, collagen | Supplements, skincare ingredients |
| Animal feed and agriculture | Protein meal and hydrolysate, animal feed and attractants, organic fertilizer, biogas | Livestock, aquaculture, circular agriculture |
The scale of value increase: US$1.5 to US$20/kg
The gap between the economic value in raw-material form and the value after processing is clear.
| State | Price range (USD/kg) | Notes |
|---|---|---|
| Fishmeal and fish oil (basic processing) | 1.2〜1.5 | The conventional mainstay |
| Animal-feed additives | 2〜3 | A slight premium with functional claims |
| Fish-skin snacks and processed foods | 5〜10 | Consumer-facing processed products |
| Collagen (standard product) | 15〜20 | A value increase of 15-25 times |
| Specialty collagen and peptides | 20〜50 | For functional claims and specific uses |
If the 700,000-900,000 tonnes of byproducts a year were fully deep-processed, the industry's sales as a whole would be pushed up by the order of billions of dollars. In reality collagen makers' production capacity is constrained and the shift is gradual, but the structural shift is expected to complete in 5-10 years.
Industry reaction: attention to the circular-economy model
The VnAgri article places Dr. Bui Thi Thu Hien's "development of value-added products under a circular-economy model" as its core message. From an SDGs perspective too, processing that aims for zero waste becomes a competitive advantage in the international market. The EU's ESPR（Eco-design for Sustainable Products Regulation） will be enforced in stages from 2026, and circularity will be asked of imported seafood too.
Among Vietnamese companies, Vinh Hoan Corporation (the largest pangasius player), I.D.I. Corporation, and Bien Dong Seafood are said to be strengthening their collagen and peptide businesses. China's Haid Group's new northern plant as, a structure in which the shift to high-value-added uses for humans proceeds in parallel with feed uses.
Impact on the Japanese market: a supply source for functional-claim ingredients
For the Japanese market, pangasius-derived collagen and peptides from Vietnam are an alternative and complementary ingredient to domestic fish collagen growing in importance. Japan's domestic collagen-supplement market is on the order of 50 billion yen, and raw-material supply is highly dependent on China, Thailand, and Vietnam.
There are three merits to choosing Vietnamese product.
- Price advantage: 20-30% cheaper than Chinese product, over 50% cheaper than Japanese product
- Traceability: derived from a single species (pangasius), so the raw-material history is clear
- Sustainability appeal: the circular use of byproducts allows it to be made into a story as a sustainable ingredient
If consistency with Japan's foods-with-function-claims system can be achieved, new products of Japanese brands using Vietnamese collagen and peptides are likely to increase.
Spillover to the industry: lateral expansion to other farmed species
The high-value-added model for pangasius byproducts can be laterally expanded to other farmed species. Tilapia、Tay Ninh Province's high-tech livestock poultry byproducts there, chitin and chitosan extraction from shrimp shells, and so on, the turning of byproducts into a gold mine is advancing across Vietnam's fisheries and livestock industries as a whole.
At the government level too, the Ministry of Agriculture and Environment plans to formulate "circular fisheries guidelines" within 2026, and the setting of target values for byproduct-utilization rates and tax incentives are under consideration. In the context of Japan-Vietnam agricultural cooperation too, the transfer of Japanese food-processing technology may be packaged.
Practical information: entry channels for Japanese companies
| Use | Main Vietnamese suppliers | Entry approach |
|---|---|---|
| Food-grade collagen | Vinh Hoan、I.D.I. | Long-term OEM contracts, joint development |
| Functional peptides | Vinh Hoan Collagen subsidiary | Sourcing via functional-material makers |
| Fish oil | Bien Dong Seafood | Via trading companies, for supplement-ingredient use |
| Peptide-drink ingredients | Several emerging processing makers | Discover at business meetings such as JETRO's |
| Trade shows | Vietfish (HCMC, once a year) | Every August, one of the world's largest seafood trade shows |
Summary: a paradigm shift for Vietnam's fisheries
The high-value-added use of pangasius byproducts is a symbolic case of Vietnam's fisheries evolving from a mass-supply model to a value-added, circular model. For Japanese companies, it becomes an area where strategic partnerships can be formed, both as a sourcing source for sustainable raw materials and low-cost functional materials and as an export destination for food-processing technology. Competition over the 700,000-900,000 tonnes a year of gold mine will get into full swing over the next five years.
