TUF plans new shrimp plant via JV in India

Rittirong Boonmechote, president for the global shrimp business of TUF, said yesterday that the company was looking to expand in India via the new JV, in which it would hold a higher stake.

The new shrimp plant will have a production capacity of 15,000 tonnes per year, compared with 8,000 tonnes per year at the existing plant running under Avanti Feeds. It will require an investment of anywhere from US$10 million to $20 million (Bt324 million to Bt648 million).

TUF chose to expand in India because it already has a base there, while it can provide better technologies and access to markets such as the United States, where it has a distribution network.

Avanti Feeds, a processor and exporter of shrimp feed and frozen shrimp, reported total revenues of Bt8.89 billion last year, rising from Bt5.3 billion in 2013. Its profits nearly doubled to Bt654 million from Bt336 million.

Rittirong said Thailand’s shrimp output was expected to increase by 20-25 per cent to 250,000-275,000 tonnes this year, after plunging to a record low last year because of the continued impact from early mortality syndrome.

The EMS epidemic has wiped out two-thirds of Thailand’s shrimp. Thailand was producing about 650,000 tonnes annually three years ago. India and Indonesia have stormed ahead by increasing their sales from 80,000 tonnes to about 350,000 tonnes a year during the period.

The situation has weakened the competitiveness of the Thai shrimp industry, which has the potential of processing a million tonnes per year – four times the current fresh-shrimp output.

"From being the world’s leader, today our output is lower than Ecuador’s," Rittirong said.

The government should give more importance to the Bt100-billion shrimp industry, which has received only Bt90 million in support from the state, including help in funding the establishment of a nucleus-breeding centre.

The government should also redouble its efforts to negotiate free-trade agreements and other trade privileges for Thai shipments, he said.

"If we are slower than other countries, in one or two years buyers could flee to other countries."

The local shrimp industry has also been hit by the appreciation of the baht, which over the past three years has strengthened by 25 per cent against the Vietnamese dong and 32 per cent against the Indonesian rupiah.

TUF wants to boost shrimp products under its own brands to half of total sales in five years from 30 per cent at present. It also aims to raise its sales to new markets from 5 per cent to 30 per cent in three years to reduce its reliance on US and European markets, which currently account for the lion’s share.