Frozen Shrimp continued to be the major export value item accounting for 44.17% of the total US $ earnings. Shrimp exports during the period increased by 16.02%, 36.72% and 42.90% in quantity, rupee value and US$ value respectively.
Fish, has retained its position as the principal export item in quantity terms and the second largest export item in value terms, accounted for a share of about 38.42% in quantity and 20.42% in US$ earnings.
Good set of Questions.Here i am posting some links explains white shrimp cultivation,Prices,demand,Industry scenario etc.
1.Many black tiger farmers simply switched to white shrimp because they are sturdier, they eat less than tigers, and farmers can get achieve more than one major crop per year. This trend continues with India already showing a 35.5% increase over 2011 for the first 5 monthsâŚ
Despite power shortage,Higher feed prices good growth in White shrimp exportsâŚ
Thailand,vietnam and Indonesia are major producing states of vannamie and well experienced.Traditionally Indian aqua farmers produce black tiger shrimps.Last year due to disease outbreaks in china & vietnam, floods in Thailand creates good opportunity for Indian vannamie farmers.Rupee depreciation was added advantage to them.So Avanti reported sales of 119 cr in fy12 Vs 73 cr in fy11 and pbt of 14.89 cr vs 1.35 cr on shrimp processing.
As per some reports Vannamie exports grown 35 per in first five months of this financial year.But If we observe Q1 results sales from Shrimp processing degrown from 31 cr to 11.5 cr. we have to know the reasons behind it.
Out of 16000 cr marine exports fifty per of them are from shrimps.So huge opportunity is there.Due to demand from USA,Europe,Japan we can consider this demand sustainable.Due to advantages of White shrimp ( Vannamie ) over Black tiger shrimp farmers are slowly moving towards Vannamie. So With huge opportunity , Sustainable demand , shifting towards Vannamie ,Avanti is in interesting space to watch out for.Here few points you can consider to add.
1.Despite Vannamie exports are growing why shrimp processing sales has degrown since last two quarters.
2.Your domestic retailing ventures abt Prawnking.
3.There are some reports that Japanese feed manufacturer is trying to enter the Indian Market in big way with a tieup with local company.In this regard pl elaborate on entry barriers.
4.Quality seed availability is problem for farmers.In one interview General manager N.Chidambar told that this year we are going to find a solution for this problem.So any plans for marketing vannamie seed.
In 2008, Governament allowed first time in India to cultivate Vannamie. Why the cultivation of Vannamie is superior,Profitable to Black tiger &other Shrimps is
âThis is a fast-growing species. It attains full body weight in just two months, and the farm is ready for harvest in just 75 to 80 days. For every hectare, the farmer can get not less than 20-25 tonnes of yield per season, against five tonnes per hectare from the other species of shrimp cultivated in the west coast so far.â
I too am interested in knowing about their venture into retailing (Prawn King - at Necklace road, Hyderabad). They say they want to open more outlets. What kind of business model (franchisee?) do they have in their mind?Retailing sounds like a completely different line of business.
Like OM P, I too have wondered about their de growth in shrimp processing exports. However, that particular report was a standalone report, and I could not figure out whether consolidated reports tell a different story, i.e. whether they have shifted the focus of shrimp processing export to their Gujarat plant (Aqua Thai) and are using their plant in the south for domestic market. Knowing their strategy in this regard could be of great help.
do their investments in power plants actually help them to make up for unreliability in power availability for farmers? i.e. do they just sell power to the grid or directly source it to the farmers? The latter could make a huge difference.
Yeah we must include the question - reason for fall in shrimp processing.
Om Prakash, thanks for the links. This is important para from one of the links: FAO Forecasts:
"Thai production in 2012 is forecast to increase to 700,000 metric tons, whereas Indian production of black tiger may decline 40 percent to 50 percent to 60,000 metric tons to 70,000 metric tons, said the report.
Indian vannamei producers, on the contrary, could reach 100,000 metric tons, a more than 30 percent increase from 2011, it said. âSupplies of vannamei are also expected to increase from Vietnam, and the anticipated higher production will certainly put pressure on prices, particularly of medium-size product.â
India could be a big story in 2012, with its farmers switching more and more to vannamei from black tiger production, a buyer in the US told IntraFish.
"
I think the industry should continue to do pretty well in coming years. This is a situation like Astral where the transformation happened from GI to CPVC. Ofcourse, here the entry barriers are not much but still Avanti seems to be one of the most efficient player and all geared up to capitalize on the opportunity.
@Amit: The investment in power plants is more of a investment. It was because of these investments that they were able to tide through tough times.
They do get some dividends from these investments.
Kudos to Ayush for spotting this story so early. I couldnât study more on this early due to my negative bias about shrimp farming from my early days in Puri, Odisha which is just 45 kms from one of the largest shrimp farming centers of India i.e., Chilka (Indiaâs largest brackish water inland lake)
In my memory, Shrimp farming was always seen as a not so clean business associated with powerful people (read goons). I found this small video about illâs of shrimp farming in Bangladesh and imagine the things will be similar to a large extent even in India too.
Shrimp feed business of course could be different ball game.
Finally here is a small proof that Vannamei is indeed doing well internationally, this pic i took from Costco mall of Taipei. Taiwanese are kind of food freaks and love their non-veg food (definition being they eat non-veg in every meal, all days, all years of their life) and Vannamei variety (imported from Thailand) is the only one which is marketed by itâs own brand name and still seems to be the most economic one among the 4 varieties available in this store.
Regards
Disc: Not invested, kind of tracking, not so seriously since 100
Kudos to Ayush for spotting this story so early. I couldnât study more on this early due to my negative bias about shrimp farming from my early days in Puri, Odisha which is just 45 kms from one of the largest shrimp farming centers of India i.e., Chilka (Indiaâs largest brackish water inland lake)
In my memory, Shrimp farming was always seen as a not so clean business associated with powerful people (read goons). I found this small video about illâs of shrimp farming in Bangladesh and imagine the things will be similar to a large extent even in India too.
Shrimp feed business of course could be different ball game.
Finally here is a small proof that Vannamei is indeed doing well internationally, this pic i took from Costco mall of Taipei. Taiwanese are kind of food freaks and love their non-veg food (definition being they eat non-veg in every meal, all days, all years of their life) and Vannamei variety (imported from Thailand) is the only one which is marketed by itâs own brand name and still seems to be the most economic one among the 4 varieties available in this store.
Regards
Disc: Not invested, kind of tracking, not so seriously since 100
if its not too late, I would like to pitch in couple more questions
1). the size of shrimp export market is roughly 8K crore. what is roughly the size of domestic shrimp market? what is roughly the size of shrimp feed market? (or how much shrimp feed is required per tonne of shrimp cultivation?)
2). Does Avanti shrimp feed provide significantly better yield for shrimp / fish as compared to any other local available feeds? if yes, how much? Is Avanti Shrimp feed more expensive than alternative shrimp feeds?
3). How much of Avantiâs revenues come from fish feed?
4). Does Avanti plan any fish and other sea food processing facilities in the near future?
However, unlike what is mentioned above in the second article, the recent development looks more of a bad news to Indian shrimp industry (and Avanti) than good, because anti dumping duty on Indian shrimp imports was negligible (<1%), while that on shrimp imports from other countries was significant (as 112% from China). This is going to margins at least on the shrimp processing business line of avanti.
I would like this point to be included in Management Q&A if possible.
Nice Thread and thanks to Ayush for spotting this company. After reading this thread I canât resist to quote Tom Hanks from his movie Forrest Gump about a friend who is in shrimp business âBubbaâs family knew everything there was to know about the shrimpinâ business.ââŚ
The co has come out with decent results. There were lots of expectations of a poor quarter as one of the key input material - Soyabeanâs prices had gone through the roof.
Yes, stock looks interesting at current levels. If one looks at the Sales to Market Cap ratio, its pretty low and if the season in FY14 goes ok to gud, the stock seems to have value.
For Avanti, working capital has gone for the toss in FY13. While profits are flat, net working capital has gone up whopping 62cr in Fy13 led by 55cr rise in inventory and 27cr rise in debtors.
I could not figure out if its short term abberation or business has become more working capital intensive due to change in business/product profile.
