Shrimp farming. (Photo Credit: Thai Union Frozen Products)

TUF reveals expansion plans in India

Global seafood company Thai Union Frozen Products (TUF) plans to open a new shrimp processing plant in India through a joint venture formed with Indian firm Avanti Feeds.

Referring to the expansion plan, TUF president Rittirong Boonmechote voiced the firm’s intention to hold a higher stake in India through the new venture with the Indian firm, of which it already owns a 25.1-per-cent stake.

Firm sources consulted by FIS.com explained 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.

The initial investment to carry out the expansion plan will require an investment from USD 10 million to USD 20 million, The Nation informed.

The Indian shrimp feed and frozen shrimp processor and exporter reported total revenues of TBH 8.89 billion (USD 273 million) in 2014, which represents an increase from TBH 5.3 billion (USD 163 million) in 2013. In addition, its profits nearly doubled from TBH 336 million (USD 10.3 million) to TBH 654 million (USD 20.3 million).

On the other hand, the Thai firm’s president recalled that Thailand's shrimp output was recorded a record low last year due to the continued impact from early mortality syndrome (EMS) and expressed hopes to achieve a 20-25 per cent increase this year.

The fact that Indonesia and India managed to increase their production 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.

Boonmechote believes that to offset the situation, the Thai government should strengthen efforts to offer support to the shrimp industry and to negotiate free-trade agreements and other trade privileges for Thai shipments.

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

The local shrimp industry has also been hit by the appreciation of the local currency, 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 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.

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