Notes from Arihant Concall April â24
Sector going through difficult times. Company not hoping for much growth this year however is taking steps (incorporating wholly owned US subsidiary to onboard clients directly) and hoping for the business cycle to eventually turn (Ecuador competitiveness decreases due to duty and awaits EU approval for its facility).
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One thing I would like to understand is that most companies explain that Ecuador is not a threat as its mainly into commodity and Indian companies into value added shrimp. If this is the case then why is Ecuador a threat to Indian Shrimp processors?
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As the primary producers in Ecuador are highly consolidated (noted that there are 20-30 large corporates into aquaculture) and enjoy economies of scale the basic price is always going to be more for Indian Processor due to fragmented farming sector. This is a worrying sign which the management also agree. The only plausible explanation the management gave is that their farming area is limited being a much smaller country.