Avanti Feeds


(Aman Vij) #773

Looks like there is strong demand for Indian shrimps this year although rise in raw material prices specially soya (which has risen almost 30-40% in last few months) would mean profit growth will be slower than sales growth

The vannamiei situation is not quite as dire as that of black tiger, but volumes are also down and prices are “extremely firm.”

India for example, has been faced with massive orders from United States in July while their shrimp production is around the same level of last year, so prices have gone up around 5-10 percent, said Lenk.

“There is a lot of demand and packers are hesitating a lot to offer new product,” he said.

According to Huys, prices for vannamei from India also increased $0.50 (€0.44) to $0.60 (€0.53) per kilo in the last two weeks. “There they can offer, but there is also a lack of product,” he said.

Nevertheless packers are expecting more product to become available in the next couple of weeks, he said.

“There is a big demand from all over the world for shrimp — black tiger and vannamei — and the problem is everyone goes on the same markets,” said Huys.

Bangladesh is very small in terms of production and its capacity is not very high, so the producers accepted a lot of orders without having any black tiger shrimp.

“So then everyone goes to India for vannamei and there also everyone gets overloaded,” said Huys.

Normally prices from Bangladesh and India are a little bit cheaper than other producing countries. For example, it is possible to source from Vietnam as well, according to Huys, but prices there can be $2 (€1.80), $3 (€2.70) or $4 (€3.50) more per kilo for black tiger and vannamei.

“Then it is a price question when it’s expensive like that,” he said. “When prices are that high, normal European buyers get scared.

“At the moment, it is really not easy, nobody has product, nobody has stock, and everybody wants to buy.”

And with the end of year approaching fast, this is also contributing to the market pressure.

For year-end sales, product will have to be shipped within the next month, said Huys.

“But nobody is getting product, I don‘t know what is going to happen,” he said.“With the end of the year coming everyone needs product.”

Meanwhile, importers in the EU are now realizing there will not be a downturn in prices when it comes to vannamei, instead they are stable and on an upward trend.

Prices are extremely strong and there is not the slightest sign of weakness,” Lenk said.

The rise in demand from China is also adding to the pressure, a situation the world market needs to get used to, said Lenk.

“China has bought a lot of product and no one knows if China will step in again after August,” he said. “The world market has to get used to that – China is playing an important role for importing product now.”

While China is still producing, the demand is high and its import attitude has changed. The country bought huge volumes from India in the first six months of the year.

Source
Original article https://www.siamcanadian.com/eu-shrimp-market-extreme-pressure-supply-shrinks-intrafish.html

Uptick in Soya prices http://www.indexmundi.com/commodities/?commodity=soybean-meal&months=60&currency=inr


(Vivek Gautam) #774

Story seems intact

Farmgate prices, on the other hand, have increased in India. Akula explained that from below Rs 400 per kg (for 30-pound shrimp) in early FY16, it has now moved up to Rs 540 per kg.

Patnaik too said that the US-based importers were under the impression that despite a fall in production in China and other South Asian countries, India production is good this year, and they did not buy as much they would have wanted to. “However, in the first half of the year, Andhra Pradesh production was below expectation, and this pushed up the local prices,” he said.

Exporters thus feel that US-based buyers would now have to increase their buying price, as their inventory (of about 3-months) is now depleting. Add to this, the global production too is down by about 7-8%, Akula mentioned.

With international prices going up, margins of exporters is likely to improve, and it would be a win-win for both farmers and exporters.

Production is China and Thailand are severely affected. China’s production has slipped from a peak of 1 million tonnes to 700,000 tonnes at the moment, while Thailand is doing around 260,000 tonnes at the moment, down from 600,000 tonnes earlier. This has opened up opportunities for Indian exporters, and as such overall shrimp exports from the country is expected to clock a 20% growth rate this fiscal, feel exporters.

India’s production has grown in the past few years, post adoption of vannemei shrimps (which now constitutes more than 90% of shrimp production in India). Akula informed that from an earlier 80,000 hectares (before vannemei), the area under cultivation is now around 1.2 lakh hectares.

Share of states like Gujarat and Odisha too have increased who now contribute to about 22% of national production from a 10% share 3-4 years back.


(Tirumal Rao) #775

Discussions at Avanti AGM sidelines:

Q. You guys continue to do an amazing job year after another. Whats the feel now, how long will such good performance keep happening?

A. We get to know that we have done something good only when we get to know from people like you. Usually, we are so busy with the work that we don’t have time. I have changed so many jobs in my earlier times that my friends used to joke that you will never get gratuity. But here it has been a great experience. Its been about 10 years for me. The best thing is that there is no politics at employee level. Our top management handles things in a way that it never happens. People are focussed and dedicated to work. They take responsibility. A senior manager is doing stapling work of documents, or helping shareholders at the AGM today.
The MD involves everyone in discussions, like last night we were discussing about preparations for the AGM after dinner at 11 pm near the lift and it continued for half an hour. In the morning MD was here at 7.30 to check the arrangements.

Q. Last year we had talked about the use of technology and how the same is used to keep track of productivity of technical people and the FCR ratios. Any further improvement in the in-house technology thing you mentioned last year?

A. Its an always evolving process. We keep continuing to do lots of things and improvements. We have the app. There are more parameters added which we monitor (16 now vs 4 about 3-4 years back).

The marketing/technical guy has to visit about 7-10 farmers per day and revisit him once a week. So we have lots of data. We have included data about the investment by farmer, the previous crop he was doing, changes in crop pattern etc. These give us market intelligence.

There is a separate audit team which keeps a check on the marketing/technical team. So there are several checks and balances in the organisation.

Q. What is the arrangement of TUF with Avanti Feeds for sourcing processed shrimp from India

A. No special arrangement. TUF has a 100% owned US importing/procurement subsidiary. They do the sourcing based on where it is profitable for them to source from. Like right now we are sourcing more from Thailand than India. Sometimes it’s more profitable to source from India or elsewhere.

Q. What is the kind of training required here in the Avanti JV processing plant vs TUF Thailand?

A. In India right now, money can be made from basic processing - headless, etc. In Thailand, you can’t make any money if you are doing that - so we have to do more high-skill value added jobs.

Q. What is the arrangement for transfer of high-skill value-added know-how from TUF to Avanti JV?

A. We are very open. We are ready to completely open our production-floor. Right now we are here training a team here. Best is if Teams from here could visit our production-floor and train there.

Q. This seems like a long drawn out process! It can take minimum 2-3 years for this to be effected?

It should happen soon.


(aditya yadav) #776

Some additonal snippets from the AGM are as following

Further growth in Feeds … West Bengal is fast catching up with Vannamei and company has developed a strong distribution network in that region.
Orissa is still mostly Black Tiger .
They see significant acreage increase in the coming years in Andhra Pradesh as well
(Dealer feedback in WB: Demand is very strong , Avanti has had supply constraints)

New Processing plant… The new processing plant’s construction is on schedule and should be commissioned by sep 2016. Company has a huge learning curve ahead with value added exports and wants to go slow and steady for first year.The support of TUF will be significant on imparting skills.

Competition in Feed Segment… This sector has had likes of ITC, HUL, Godrej etc, inspite of that Avanti has created a very strong franchise and there is huge demand pull towards Avanti’s products. Being a deep pocketed guy is no guarantee for success here. Creating a topnotch product for farmers require consistent loop of iteration on feed composition, feedback from farmers, learning new practices etc and producing/supplying at the right cost. According to management estimates they were short of 50-60,000 MT of feed in the last financial year.
(my comment : the demand pull can also be validated by the fact that receivables for feed segment are almost zero for a company doing a turnover of 1700-1800 crs)

Research and Development… This year they seemed to be focusing on R&D efforts and had interactions with experts from various universities on new practices, improving feed composition etc but no formal mention in the Annual Report . They expect to step up this effort further in future.

Raising of Anti Dumping Duties… Still under review by US department of Commerce and no final decision yet

Others:

-Hatchery plan underway with a capacity of 400 million PL and a proposed capex of rupees 10 crores.

-No branding plans of now for processed shrimp, the current aim is to supply good quality produce and earn a good rapport in major markets.


(Shan) #777

http://www.npr.org/sections/thesalt/2016/08/18/490377190/shrimp-grown-in-tanks-make-a-splash-coming-to-a-market-near-you

An interesting article about how local shrimp industry in the US is responding to imports. Not a threat… Yet!

Disc: no position


(Sandeep Patel) #778

India shrimp exports (figures and analysis - by volume)

To U.S. (source: www.st.nmfs.noaa.gov/apex/f?p=169:2:0::NO::: )

  • India regain growth numbers; 19% higher in July YoY.
  • Indonesia continues to maintain thin lead over India in 2016.

To Global (source: www.zauba.com)

  • 10% lower export in Aug YoY; this is after reporting healthy growth numbers in May-Jun-Jul YoY.
  • Note that zauba data may not be completely accurate; just use to get the trend right.


(eyesice) #779

India’s Falcon Marine Exports has won a lease contract for 433 hectares of shrimp farming land from the government of Odisha district, reports Indian Express.The Jagatjore-Banapada Shrimp Culture Project was readied in 2000, at a cost of INR 252.3 million. 405 ponds were allocated to 405 farmers and 76 larger ponds, of one hectare each, were given to 11 different entrepreneurs. - https://www.undercurrentnews.com/2016/09/05/indias-falcon-marine-wins-lease-for-430ha-shrimp-farms/


(Venkata Kolli) #780

Reduction in duty by the US govt on import of frozen shrimps from India is likely to boost exports. Read more at


(ishandutta2007) #781

@Donald : waiting for your views on this.


(JKS) #782

http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/07189D2B_05A8_4BF0_9102_B98C082050E2_183349.pdf
Rating upgrade


(parthibansubramanian) #783

recently i was speaking to a Prawn farm owner, who is exoprting prawns to different rich asian countries like singapore, middle east. I enquired about waterbase and avanti feeds. in his opinion avanti feeds are much better in quality than waterbase.

disc - invested in avanti feeds


(Vivek Gautam) #785

Avanti Feeds Ltd is one of the leading manufacturers of prawn and fish feeds and shrimp processors. The company has prawn and fish feed units spread across Andhra Pradesh and Gujarat, producing nutritional high quality feeds with a total capacity of 90,000 MT per annum. While the company’s shrimp feed plants are operating at 100% capacity utilisation, in view of the future growth of shrimp culture, Avanti is looking to increase the plant capacity to 110,000 MT per annum. The company has come a long way since 1993 by bringing in the world’s largest seafood manufacturer, Thai Union Frozen Products, Thailand to collaborate with it. The fish feeds produce of the company are made from international raw materials, eco friendly water quality and superior balanced nutritional products, giving the Indian aquaculture export industry a big boost. According to recent news, Thai Union Group Thailand is buying a 40% equity stake in Avanti Frozen Food Pvt Ltd. The latter is a wholly owned subsidiary of Avanti Feeds Ltd and Thai Union is picking up an equity stake at a premium of Rs 303 per share on a preferential basis. Thai Union had earlier scrapped a deal to acquire a major seafood company in the US and now with this new joint venture it will change the entire seafood industry climate in the country. The Indian seafood industry is exporting a wide range of products to over 100 countries around the world. The major positive change in the seafood industry during the last decade is due to factors like increased global supply, bio terrorism, environmental reasons, diet diversification and international trade barriers. But our Indian factories have grown to have world class facilities and meet international norms, posing a threat to other global seafood companies operating in the region. Avanti is eyeing a larger revenue model in the near future on the back of increased volume export growth. With negligible debt on its balance sheet, Avanti Feeds has clocked a revenue of Rs 750 crores for Q1FY17, with a net profit of Rs 46 crore for the same quarter this year. On a tiny equity base of Rs 9.08 crore, the EPS works out to a whopping 15 times on an annualised basis, giving rise to prospects of a long awaited bonus issue of shares by the company. Avanti Feeds with state of art technology, excellent storage facilities, and commitment to clients has a proud list of loyal customers. Most analysts are predicting a CAGR of 50% and 35% in its top line and bottom line, respectively, for the next couple of years and we feel that the Avanti stock is a value buy for portfolio investors. The stock currently quoting at Rs 540 is a good buy for a 30% price appreciation in the next 6-9 months.

Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.


(Ayush Mittal) #786

Seafood industry has a rosy future, says MPEDA chief - http://www.thehindubusinessline.com/markets/commodities/seafood-industry-has-a-rosy-future-says-mpeda-chief/article9132441.ece


(Vivek Gautam) #787

MPEDA has done some real commendable work. hats off to them. Govt orgns specially in South and Tamilnadu doing good work imho


(Vivek Gautam) #788

Seafood Exporters’ Association of India (SEAI) president V. Padmanabham has predicted that Vannamei, white-leg shrimp cultured by aquaculture farms mainly in Andhra Pradesh, is the future of Indian seafood exports and called for improvement in facilities like brooder multiplication and seed production.

In an exclusive interview on the sidelines of the ongoing 20th edition of India International Seafood Show-2016 here, he told The Hindu on Saturday that the industry was also making serious efforts to popularise the globally accepted aquaculture practices to yield better results and sustainability.

Exotic species

Vannamei is an exotic species and its demand is growing in the global market due to low price, nutritional properties and taste.

Stating that Vannamei would continue to play a major role in achieving India’s marine product export target of $10 billion by 2020, he said seafood exports rose from Rs.10,000 crore in 2009-10 to Rs.33,500 crore in 2014-15, registering a phenomenal growth of 330 per cent in five years.

No other sector has achieved such an impressive growth.

Andhra Pradesh has contributed 45 per cent of the total exports and the aqua products have a lion’s share of 65 per cent from the State. “We are in tune with the double-digit growth target set for the country,” he stated.

Referring to the drop in export value last year by 10 per cent, he attributed it to the market situation internationally but the volume increased by five per cent. The total exports, which were $4.7 billion, are expected to go up to $5.6 billion this fiscal.

Mr. Padmanabham said that besides Vannamei, there was bright scope to increase exports if more focus was laid on value addition of captured fish and tuna.

India is the largest producer of Vannamei in the world followed by Thailand, Vietnam, Indonesia and Ecuador.


(Vivek Gautam) #789

http://www.ptinews.com/news/7907681_SEAI-wants-agriculture-status-for-aquaculture-sector.html


(Saji John) #790

Avanti cited as one of the major beneficiaries of the forecasted higher demand for aqua feed. http://forextv.com/top-news/aqua-feed-market-global-industry-analysis-us122-6-billion-by-2019-size-share-growth-trends-and-forecast-2019-tmr/


(Sandeep Patel) #791

India shrimp exports (figures and analysis - by volume)

To U.S. (source: www.st.nmfs.noaa.gov/apex/f?p=169:2:0::NO9::: )

  • India records stellar growth in August 2016; 41% higher over the same period last year.
  • India regain number one slot with decent lead over Indonesia.
  • US’s shrimp imports (from India & others) increased by 4%, compared to 2015 same period.

To Global (source: www.zauba.com)

  • 26% fall in export in September YoY.
  • Note that zauba data may not be completely accurate; just use to get the trend right.


(Vivek Gautam) #792

http://economictimes.indiatimes.com/markets/stocks/news/farmers-find-holy-grail-in-exotic-shrimp/articleshow/54909524.cms

Farmers turned to seafood after exports jumped 60% to Rs 30,213 crore in 2013-14. Vannamei shrimp led this staggering growth. Marine Products Export Development Authority (Mpeda) chairman A Jayathilak compares the silent revolution to the boom in the Gulf jobs that happened in Kerala.

“The initial investment in a shrimp farm may be as high at Rs 12 lakh per hectare. The income in the first year is Rs 6 lakh and by the second year the entire cost of investment can be recovered and it is profit from the third year onwards," he said.

The prime reason is that income from a shrimp farm is five times higher than paddy. Another reason is shortage of labour. While an acre of paddy farm requires 45 workers, the labour requirement for a shrimp farm is much less,” said Dr P Satyanarayana, director of Andhra Pradesh Rice Research Institute.

Mpeda reckons that the estimated potential area of brackish water land availability for aquaculture in Andhra Pradesh is 1.5 lakh hectares, of which the state has used up about 57%

Was there an interview of Avanti Feeds MD on ET NOW? did anybody watched it?what did he say?


(Gaurav Agarwal) #793

Alluri Indra Kumar appreared on BTVi.