International Marketing

A Study on Shrimp Market In India”

Shrimp aquaculture in India:

The research investigates the existing business setting of shrimp farming in

India. Based on the research and analysis of current aquaculture industry. I have assessed the

business strategy and competitive advantage that will examine on the prospect and

development of shrimp aquaculture industry in India. The evaluation will focus on various

significant factors and issues affecting the growth and sales such as, product diversification,

branding / positioning, etc.

My research involves an approach to identify a successful strategy, which

could improve the current business environment, using the tools and knowledge I have gained

during the course of my MBA.

The research is limited majorly on secondary data and focusing specifically on

the certain issues. I believe the research was constrained by resources and time due to which I

was unable to cover and explore all research articles relating to this research.

A General Overview Of Aqua Culture

Due to the increasing concerns of global warming and financial crisis, one of

the very basic necessities of human existence on the planet earth i.e., 'food' is becoming

costlier every day. Senior political and social representatives around the world are dealing

with recurrent inflation issues, increase in food prices, etc. In this kind of scenario

'Aquaculture' is playing a crucial role. Aquaculture is a sort of sea farming or it can be more

accurately termed as 'Aqua farming.' According to anon (2008:65), the most famous kind of

foodstuff farmed in this way is kelp and some different kinds of algae, shrimps, black

mussels, salmon fish, milkfish and barbel. The definition of aquaculture is different in

different geographical conditions and areas. As a result of rising demand for seafood, fish

farming is termed as a new way to feed the world. Bernard Weinstein quotes:

“There’s a national imperative to rebuild that infrastructure, We've got half-a-

dozen critical industries down there - shipping, refining, agriculture, aquaculture - that serve

the entire country. But where and how to rebuild the rest of the city, those are politically

charged questions that can only be answered down the road."

The most important question is does the aquaculture help in the development of a country on

the business, economic and other fronts. Hugues-dit-ciles (2000:365) explains that

aquaculture has got enough capability to help increase the social and economic welfare by

nourishing ever-growing populations, make available new job opportunities and source of

revenue, produce financial benefits that lessens paucity and receive foreign exchange. The

United Nations' Food and Agriculture Organization (FAO) has an internal department known

as Fisheries and Aquaculture department. The principal objective of this department is to aid

the development and utilization of global fisheries and aquaculture.

Aquaculture contributes around 50% of global seafood supply. In 2006, the

total aquaculture production (not including aquatic plants) was over 50 million tonnes, with a

value of over US$ 65 billion. Around 90% of the global aquaculture production is from Asia.

Brackish aquaculture has immense contribution to the seafood export earnings by utilising the

costal wastelands and plays a major and significant role in generating income and

employment for the nation. Annually total revenue of USD 24.6 billion (EUR 19.6 billion) is

generated from global seafood exports FAO (2009). Captured fishing and Aquaculture

contributes about 110 million tonnes of world supplies for seafood in 2006 (all data in this

report are approximate and subject to rounding). To satisfy the future per capita consumption,

at least 40 million tonnes of seafood will be required by the year 2030 based on the current

population growth projected.

China is considered to be a pioneer of aquaculture industry and India follows

at second position. Almost about 4500 years ago, 'Aquaculture industry' (aqua farming)

started and came into existence by building some artificial lakes and feeding the aquatic

living beings with the appropriate food to get more fishes, Anon (2008:65). Asia's

contribution is over 90% of the global aqua culture production. Furthermore, in the Europe, it

started in the middle ages, as the fish became dear and inadequate comparing it with the

demand. On the whole, 'Aquaculture' is already playing an important role in meeting the

future demand for animal protein. This is a result of the increase in the meat consumption

throughout the diversified cultures and geographies. Langan (2008:227)

Shrimp Culture

The equipments and facilities for shrimp aqua culture were primarily evolved

through trial and errors. There are three phases / stages in shrimp production of shrimp

aquaculture,

First phase: reproduction and maturation for producing larvae i.e. seed stock

Second phase: producing post - larvae through hatchery

The final phase: growing the adult stage of shrimps in ponds - Parker R. (2000).

The larvae i.e. seed stock produced in the reproduction and the maturation phase is then

supplied to the hatchery phase and the post larvae that are produced in the hatchery are

supplied to the final grow - out stage, as shown in the above figure. A shrimp growth depends

on various parameters such as pond management, stocking period, temperature, stocking

density, salinity and feed. And all these parameters vary depending on the types of species

cultured and the method used for the shrimp culture. As soon as the shrimp passes the final

stage and comes out of the water, they must be immediately sited and kept in ice. They are

kept fresh, beheaded, frozen or / and graded depending on the market they are sold. Shrimps

grow naturally in brackish water regions of the world. However when they are farmed or

cultured, it is most commonly in pond systems through intensive, semi - intensive or

extensive management systems.

Classification of various culture systems

There is different aqua culture production systems used widely across the

globe. These classifications are based on the distinct types or species being cultured and on

geographical location and the socioeconomic context. However, there is one common thing in

all forms of aquaculture i.e. the utilisation of natural resources and manipulation of biological

systems. (Midlen A. and Redding T, 1998)

The varieties of culture systems that can be adopted as per the available resources are quite

wide. In India the heterogeneous culture systems that have attained best possible achievable

production rates are classified as follows

1. Composite carp culture.

2. Sewage-fed fish culture.

3. Weed-based carp polyculture.

4. Biogas slurry-fed fish culture.

5. Integrated fish farming with poultry, pigs, ducks, horticulture, etc.

6. Intensive pond culture with supplementary feeding and aeration.

7. Pen culture.

8. Cage culture.

9. Running-water fish culture - Gopakumar et al., (1999).

Focusing on the importance and significance of aquaculture globally and to improve

aquaculture research and development, the Indian council of Agricultural research rearranged

the fisheries research institutes viz., Central Institute on Freshwater Aquaculture (CIFA),

Central Institute for Brackish water Aquaculture (CIBA) and National Research Centre for

Cold Water Fisheries (NRCCWF). The state of Andhra Pradesh leads the production with the

highest contribution of about 86% of total India's seafood production. Another important area

of concentration in Indian Aquaculture is the reserved water percentage of about 60 percent

for only Prawn farming. Almost all of the states in India have their dedication towards

fisheries development keeping in mind its significance to the whole sector. - Subhasinge and

Currie (2005).

In India, Brackish water culture has also been substantially used in the area of aqua farming.

It is restricted to:

1. Pokkali, i.e., salt resistant deepwater paddy.

2. Bheries, i.e., human created impoundments in coastal wetlands.

The commencement of All India Coordinated Research Project (AICRP) was a great

breakthrough towards the brackish water aquaculture. It had considered fish and shrimp

farming to be its options. It is now due to some issues that scientific and business-related

culture at present is confined to shrimp farming only. The state of Andhra Pradesh on its own

contributes 47 percent of the area and provides 50 percent of the total production. One of the

crucial productions of brackish water, finfish, is almost not available in Indian farming.

Whereas, some experiments on mono and poly culture of mullets whiting, pearl - spots and

milkfish have depicted the latent for farming. - Subhasinge and Currie (2005).

Indian aquaculture, based on the production and awareness of its importance, has reached the

industry state. There are certain things that Indian system also lacks, mainly, a database of all

the human resources associated with the shrimp and fish farming. As Bhatta (2003) did the

research regarding the average age of Indian aquaculture farmers, it came to 47 years. The

expansion of shrimp farming has surely created opportunities in the coastal areas. Even

Andhra Pradesh has shown a positive movement in the percentage of earnings for the shrimp

farmers. As far as the brackish water sector is concerned, hatcheries and feed mills have

proven to be the pioneers of improving opportunities. About 300 000 employment

opportunities have been generated due to the shrimp aquaculture. - Subhasinge and Currie

(2005).

Carp, is the hugely significant species farmed for the freshwater aquaculture. On the other

hand, shrimp holds the similar position in the brackish water sector. The highest contribution

to the total aquaculture production is because of the three Indian Carps, Catla Catla, Labeo

Rohita, and Cirrhinus mrigala are those three significant carps. Considering the brackish

water aquaculture, it is highly supported by shrimp production and the giant tiger prawn. No

doubt, there are other species like shellfish and finfish, which holds a very low key for the

Indian Aqua culture.

Worldwide shrimp fisheries

Shrimp is one of the largest single commodities in terms of value and is

accounted for nearly 17 % of total value of seafood products traded internationally and values

more than US$ 14 billion. Nearly 6 million tonnes shrimps are produced globally i.e.

captured and cultured. Out of which approximately 70 % of produced shrimps are traded

internationally, which makes it the most important and principal fisheries commodity

worldwide - FAO (2009). This distinctly indicates the huge potential and global market of

shrimp industry. Out of total shrimps traded world wide, around 60% of shrimps are in frozen

or preserved form, followed by cooked and boiled form respectively.

Out of total shrimps traded world wide, around 60% of shrimps are in frozen

or preserved form, followed by cooked and boiled form respectively. However the biggest

challenge for fisheries institution is in the developing countries. The conflict between the

small-scale industries, exploitation, over capacity, etc. has weakened the foundation of the

industry. And most of the countries are completely dependent on the monetary gain of shrimp

industry.

Aquaculture in India

India, being one of the central and prime developing nations, is considered to have the

required potential and capabilities to become the next most powerful nation. Agriculture

accounts to the maximum social and financial revenue of India. Agriculture accounts to about

27 % of India's gross domestic product (GDP), 65 % of the total employment of the labour

force and most importantly it accounts to 21% of total exports. Around 7 million fishermen

are employed in fisheries sector. There are various other key sectors that have a significant

contribution in India's growth and fiscal revenues. Fisheries have always been a traditional

avocation in India. And in recent years, one of the promising and upcoming divisions is

'Aquaculture' - Krishnan and Birthal (2002:81). It is imperative to consider the different water

conditions when it comes to aqua farming. There could be freshwater, brackish water, saline

water and brine water. Generally brackish water is the type of water, which is more saline

than freshwater but not as much as the water from the ocean. Some construction projects can

give rise to brackish water collection due to flooding in that particular area.

Krishnan and Birthal (2002:81) have also explained that due to the demand and growth of

coastal aqua culture in India, it also has been quite a promising sector for accelerating the

exports and improving the foreign exchange. India's involvement in the worldwide fish

production has been increasing since a decade now. On an average, it contributes to about 1%

of total GDP. As can be seen in the following figure, India is the third largest producer of fish

and has important contribution to the world aquaculture.

As per FAO's fisheries and aquaculture department, India utilises only about 40 percent of the

huge availability of 2.36 million hectares of ponds and tanks for freshwater aquaculture. For

brackish water the utilization is even less at about 13 percent of 1.2 million hectares. In

general, the sector has shown a decent growth and potential - Anon1. (2006:47). The total

fish production (marine and inland) projected in 2006-07 is 6.8 million tonnes.

The culture systems adopted also vary greatly relying on the geographical culture and the

financial capability of the farmer. Broadly, its systems can be anything from a rigorous

indoor system observed with high tech equipment through to the simple release of baby fish

to the sea. Everything has the intention of increasing natural productivity. Simpler systems

like small family ponds are also used in some situations. There are, on the contrary, the very

high-tech systems like some intensive closed units or some sort of sea cages. Some

exceptionally common type of aquaculture systems are Ponds, Indoor-rearing, outdoor-

rearing and coastal aquaculture. Almost 50 percent of comprehensive aquaculture is of

herbivorous and filter feeding fish like carp. These ponds are either naturally created or

manually by aqua-farmers near their house and it gets filled normally with the natural

rainwater. In some cases it's also possible that some other stream is diverted to the very pond.

Its been researched that consumption of fish in India is comparatively quite low, when

compared with the world. The very reason for the same is the prices of fish. The increase in

per capita income will accelerate the consumption of fish. Furthermore, Indian aquaculture

has shown six fold growth over the last 20 years. India's contribution is more towards

freshwater aquaculture. In the freshwater production, Carp, which is the term, used for

various species of an oily freshwater fish, and in brackish water production, Shrimp, which is

a huge ordered group of arthropods, and is referred to, as decapod crustasceans are the

majorly concentrated areas.

The other methods like indoor rearing is also frequently practised, holding the fish indoors

with the help of some intelligent systems which also help in removing all the bacteria from

the waste produced by fishes. The water in these methods is re-circulated.

There is certain population in current world aquaculture that concentrates on the production

of plants. These plants are mainly seaweeds; they could grow either on the seabed or racks in

shallow coastal waters. The following section throws some light on the classification of

culture systems as per Indian aquaculture.

Background of shrimp culture in India

India has a long coastline of 8129 km along with a vast continental shelf of

0.50 million km2 and involves nine states, from Gujarat in the northwest to Kerala and Tamil

Nadu in the south to West Bengal in the northeast. About 40% of the farmed area is under

traditional farming and remaining portion of the farmed area is under scientific farming

(Kurup B., 2008 and Vasudevan, 2002).

The west coast has a narrow continental shelf with a relatively rocky

shoreline, whereas the east is mainly estuarine, which provides a more suitable location for

shrimp farming. Mangroves are mainly located in the Sunderbans delta region, which extends

over West Bengal and into Bangladesh. Mangroves are also found in the deltas of the major

rivers such as the Godavari river, Krishna river, and Kavery river. One of the most common

and popular practices in coastal areas of India is Shrimp culture, producing around 120,000

tonnes shrimps each year (Coastal Aquaculture Authority, 2006). India avails 1.24 million

hectare of brackish water area - Kurup B. (2008). During eighties growth of shrimp farming

was slow and traditional farming accounted for a production of 30,000MT. In the next

decade, during early nineties, an exponential growth took place because of high export

demands and liberalized economic policies of the Indian government. As a result of

continuous strong demand, shrimp cultivation in India has experienced very fast growth, in

particular, during the early 1990s (see Table 1). Tiger shrimp / Penaeus monodon, and white

shrimp / Penaeus indicus, form the largest portion of the shrimp produced in India. The viral

"white spot disease," which was first observed in India in late 1994, has caused great damage

to Indian shrimp industry, as reflected in the production figures for the subsequent years.

Recent production data suggest that, from 1998 onward, shrimp production has been

increasing again - Wood et. al (1992)

This growth was boosted due to higher participation of private sector and

practice of semi intensive methods of farming. In the following years, culture activities in

Coastal Regulation Zone (CRZ) area were stopped due to Supreme Court rule. Farming faced

a major setback due to outbreak of diseases and alleged negative impacts on social and

environmental aspects.

There have been many countries that became aware of shrimp farming and the

importance of aquaculture towards the growth of an economy. As Wood et. al. (1992:4) has

explained the extensive West Bengal shrimp culture, is surprisingly associated with the rice

production. This is because the rice was cropped or rather intercropped with naturally stocked

fish and shrimp seed, which had been washed over the rice field outskirts bunds during the

time of high tides. This culture in the Indian land has been termed as 'bheri' culture. In this

kind of culture, no feed supplementation is normally carried out. As per Leung and Engle

(2006:247), some standard farming practices are used for shrimp farming as well. It is a two-

step process, first, a brood stock-hatchery phase for producing seed or post larvae. Second, a

phase that occurs in earthen culture ponds.

Many farmers in the rural coastal areas still depend on the wild shrimps for the

development of quality seed. In Southeast Asia, the production totally relies extensively and

only on hatchery-reared post larvae shrimp. Some of the farmers in Bangladesh still use wild

seed. - Leung and Engle (2006:247). The main area in India is West Bengal and Kerala,

where exclusive stocking of P. Monodon and P. Indicus is followed. Moreover, there is

another culture system, which is known as paddy-cum shrimp culture system. In this culture

system, the paddy fields are used for shrimp cultivation again depending on the requirement.

One of the concerns for Indian shrimp farmers is, for 5 months of the year

during monsoon the rain lowers down the water salinity level below the standards in which

shrimp culture is practically not possible. However, farmers in Andhra Pradesh attempt to

culture a low input second crop of shrimps, wherein the water salinity level is low do the

prices of the immature shrimps.

Shrimp industry in India

India, being one of the developing nations, has got a good potential to have a

strong economy. Shrimp production and exporting started in mid eighties in India. By that

time, the shrimp aquaculture was already at its peak in the neighbour countries, especially

China. - Yadava (2002:1). In India, there are around 56 species of shrimps available, out of

which only four have commercial importance. Out of total area available for shrimp farming

nearly 60% is farmed area and rest 40% is under traditional farming. There always are some

or the other kind of obstacles for any type of production. Similarly, in India, there was a

disease called the white spot disease (WSD), which had created havoc and had de-motivated

the shrimp farmers.

The concerned people have also generally accepted it now that the efficient

management activities could make shrimp farming easily sustainable. Yadava (2002:2) has

also presented some facts and according to him the available coastal area in the country for

shrimp farming is approximately 1.5 million hectares. Moreover, the area of about 157 000

ha is used for shrimp farming which is approximately 10% of the potential coastline.

The average production for the sector is about 100 000 metric tonnes of

shrimp per year. However, present utilization of total area under brackish water aqua culture

is restricted to about 150 000 ha and more than 50 percent of the utilized areas is restricted in

a single state i.e. Andhra Pradesh. There is also lack of diversity in coastal aquaculture in

India. A single species, penaeus monodon, which is also known as tiger shrimp, constitutes

almost the total crop produced.

There is roughly around 280 shrimp hatcheries spread all over the country.

The installed production capacity for the same is 11 billion post larvae (PL). There are also

about 200 hatcheries in production, which have come with the output of about 7 billion PL.

Apart from raising the standard of the country at the international level, shrimp farming has

also created ample employment opportunities. In a country like India, its very crucial for any

sector to create employment, shrimp farming has offered employment to about 0.3 million

people.

Cultured species

There are hundreds of different species inhabit the marine and brackish waters

of the world. All cultured and majorly captured shrimps across the globe belong to Penaeidae

family of decapod crustaceans and are termed as "Penaeids". These species are named as

Panaeus. By the year 2006, the giant tiger shrimp 'Penaeus monodon' and western white

shrimp 'Penaeus vannamei' accounted for almost 85% of global shrimps production. (shrimp

news.com, 2009). The different shrimp species cultured globally are:

Giant Tiger shrimp (Penaeus monodon)

Western White shrimp (Penaeus vannamei)

Indian white shrimp (Penaeus indicus)

Western Blue Shrimp (Penaeus stylirostris)

Red, Blue and White shrimp

Chinese White shrimp (Penaeus chinensis, also known as P. orientalis)

Japanese Kuruma shrimp (Penaeus japonicus)

Banana shrimp (Penaeus merguiensis)

Brown Tiger Shrimp (Penaeus esculentus)

The Atlantic White Shrimp (Penaeus setiferus) (Ref: FAO, 2009)

In India, Peneaus monodon, named, tiger shrimp is the most commonly cultured species with

the established and suitable advanced technology. At present, about 80 per cent of the shrimp

culture activities in the country are under traditional/ extensive systems - Coastal Aquaculture

Authority, (2006). Other species like P. semisulcatus, P. indicus, and P. merguiensis have

commercial importance. Shrimp farming provides high returns in terms of investment in

areas of production, processing and exports and is regarded as a high pay-off economic

activity (Krishnan et al. 1999, 2000).

Practices and systems of shrimp culture

The four classified production management systems of shrimp culture in India

are traditional, extensive, intensive and semi - intensive. Out of which, presently, the most

commonly adopted shrimp farming practice in coastal areas are scientific extensive shrimp

farming and traditional/ improved traditional system. The following systems are categorized

on the basis of area, inputs (feeds, etc) used, stocking density, yield and water management.

Based on the intensity the amount of input (stock, feeds etc.) and yield increases. In extensive

production management system there is very little or negative complementary feeding, water

or soil treatment (air, fertilizers etc). However in intensive and semi intensive systems, the

use of commercial feeding and stocking density is very high to speed up the growth of

shrimps resulting high production. In India extensive production systems of shrimp culture is

more profitable. (Leung P. & Engle C., 2006, p. 247). In scientific extensive farming, for

more effective integration and the use of land and water resources in the coastal areas, use of

supplementary seed and feed are encouraged (Coastal Aquaculture Authority, 2006)

In intensive and semi intensive production systems, inputs i.e. cost of feed constitutes major

component to per unit cost of shrimp produced. Followed by seed cost that accounts to 35%

of total production cost in India, which is very high compared to other nations. However in

extensive production system, India is one of the lowest productions cost country, which

produces shrimps at US$ 1.07 cost per kilogram, respectively. In addition, labour cost being

15%, lowest compared to many other nations. Thus extensive production system management

is more profitable in India. (Leung P. & Engle C., 2006, p. 247)

Traditional aquaculture method: In this type of method, ponds consisting of a

large proportion of various fishes and a small proportion of shrimps are used.

These ponds are filled with tidal water without any control over quality. In this

method, average production is low and ranges from 200 to 500 kg/ha/year of

mixed species.

Improved traditional systems: In this method, traditional ponds consisting

stocked shrimp seeds are used. Other limitations of the traditional production

system remain in this system for example no control on entrance of predators,

irregular pond depths, and complete dependence on food naturally available in

the ponds. Overall production increases from 300 to 600 kg/ha/year.

Extensive systems: In this method, square shaped ponds with excavated walls

are used. Water is supplied to these ponds through canals. The ponds are stocked

at rates of 2-5/m2, with one or at the most two crops a year.

Modified extensive systems: The ponds used in this system are prepared with

tilling, liming, and fertilization and contain higher density stock, in the range of

5to 10/m2. Feed consists of a combination of local feeds and locally produced or

imported pellet feeds. one or two crops in the range of 600 to 1100 kg/ha can be

produced .

Semi-intensive systems: The ponds are 0.25 to 1.0 ha in size, and they contain

supply and drainage canals which control flow of water. Density of stock ranges

from 15-30/m2.

Chemicals are also used along with imported pellet. Average production of

semi-intensive farms in India is about 2200 kg/ha/year (ADB/NACA 1998).

Intensive systems: The ponds are 0.25-0.50 ha in size, with four aerators per

pond and a centralized drainage system to remove sludge and manage water

flow in the pond. Density of stock is 30 to 80/m2. Many other parameters, like

salinity control, are same as for semi-intensive systems.

The average production in India is about 4500 kg/ha/year, with 1.6 crops per year

(ADB/NACA 1998). This system is common in Thailand and Taiwan, in India it is not

frequently used (James 1999).

Shrimp production

At present there are approximately two lakh farmers engaged in shrimp

aquaculture. (allbusiness .com, 2006). India contributes approximately 6% of global

aquaculture production (Hindu Business Line - 2009). In 2006, about 143,170 metric tonnes

of shrimps have been produced from a 1.54 lakh hectare area, generating foreign reserves of

about Rs. 4,079 crores in export sales that is equivalent to 0.8 billion US dollars. (all

business.com, October 2006).

During the year 2008-09 the aquaculture production was declined to 88,803

tonnes with an estimated value of Rs 1,915 crore.

Coastal aquaculture shrimp production also showed negative trend at 75,997

tonnes from the utilized culture area of 1.08 lakh hectares, compared to previous year. The

decline was around 28 % in quantity produced and 10.9 per cent in production area.

Business and Sales of shrimps in India

Shrimp is and continues to be the largest single commodity in terms of value,

and accounts for nearly 17 percent of the total internationally traded fishery products - FAO

(2009). Despite of increase in export volumes, its market share and average price

demonstrates negative trend. The major exporting countries in terms of value are China, Viet

Nam and Thailand. Shrimp imports were weak in the year 2007 in major shrimp importing

countries i.e. the United States of America and Japan. However, the EU strengthens its

position being the leading shrimp market in the world. With the exception of United

Kingdom, all the major European countries exhibit a stable or increasing trend for shrimp

imports. Prices for wild shrimp went up in beginning of the year 2008, whereas due to fall in

demand the prices of cultured shrimp showed downward trend. Many cultured shrimp

producers are now looking for value addition strategies and diversifications with margins and

prices under pressure.

Decline in demand for shrimps

Shrimp imports grew to some extent in US, but a decline was seen in the

imports of shrimp in European countries and Japan. Currently demand is still low in all three

major shrimp markets. One of the key reasons for the decline in demand is the current global

economic recession. The best solution to improve and sustain the shrimp business is through

the process of diversification and exploring regional and domestic markets.

European market

Europe is the most important destination for seafood exports and accounts for

more than 35% of India's total marine exports followed by Japan, China and US with 16%,

14% and 13% respectively. Shrimps contribute more than 52% of the total seafood exports

(quantity) in which EU accounts for more than 37% of the total shrimp exports. However the

export-earning share of EU has dropped in dollar terms revenue to 32.7 % respectively

(Hindu business line, 2009).

Since very long time, European markets had been lucrative for shrimp exports;

however, due to recession, which has not affected all countries equally, the demand for

Shrimp has declined noticeable. By the end of 2008, the household consumption of Shrimp in

European market has increased by 0.1%, but European consumer is now becoming more

calculative about the average money spent on daily basic commodities. The purchase of

shrimp is more like to get affected, being high priced commodity. (EUROSTAT, 2008)

However, by the end of the year 2009, due to festive period, there is increase in sale of

Shrimp expected. The French consumers have maintained their eating out lifestyle, due to

which the shrimp demand has remained constant because Shrimp is highly consumed in

restaurants. However, Uk, Italy, Spain, US, and few other countries have shown evident

decrease in Shrimp demand, resulting in the downward movement of the Shrimp price tag. -

Globefish, 2009

Contribution to the Indian economy

Shrimps being the principal export item and one of the largest export

industries in India. Shrimp exports account for more than 70% (in terms of total earnings) of

marine products. (Antony M et al, 2002). The total of marine exports in financial year 2008-

09 was 6.02 lakh tonnes, which accounts for record earnings of Rs 8,607.94 crore i.e.

$1,908.63 million in US Dollars (Hindu business line, 2009).

The highlight in the export trend for the year 2008-09 is the development and

increase in exports to China, emerging as the second largest importer of Indian seafood

exports with 57,271 tonnes at $278.61 million.

Markets and trade

The unit value performance of fish exports in India is only US$ 1.19 per

kilogram compared to US of US$ 2.0. In the year 2005-06 the total Indian fisheries export

reached a record of 5.12 million metric tonnes valued at US$ 1.6 billion. Brackish water

shrimp is a prime aquaculture species produced in India. Compared to any other finfish

produced by aqua culture, shrimps are mainly exported while others are mainly consumed in

domestic market. Andhra Pradesh is the second largest producer, after West Bengal. It

markets the bulk of the production in the eastern and north-eastern parts of India through

their established network. However except for shrimps and freshwater prawn, the post-

harvest processing of aquaculture produce is virtually non-existent in India. There is

negligible government regulatory control over domestic marketing systems for aquaculture

production. Thus, the price of the produce is easily influenced by supply and demand. In

addition there is no certification system available for the sale of produce. In 2008-2009,

around 66% of total exports were contributed from cultured shrimp and prawns,

predominantly in frozen form, which was valued over US$ 0.80 billion (FAO, 2009)

With respect to India's poor performance of unit value of exports and lack of value added

products, draws attention to the untracked export potential and need to invest in various other

high value shrimp species as a source of generating income and better opportunities.

The governing regulations

As per the Constitution of India, the state legislatures has the power to make regulations on

various matters and issues, which includes, water, land, fisheries etc. There are many laws

relevant to shrimp aquaculture that are adopted at state level and at central level. Several key

laws and regulations implemented by the central government of India are as follows:

Indian Fisheries Act (1897), one of the century old regulation that penalizes for

killing of fish through i.e. poisoning of water

Environment Protection Act (1986), this is considered as an umbrella act, which

contains provisions for all the environmental issues

Water (Prevention and control of pollution) Act (1974),

Wild Life Protection Act (1972)

On 11 December 1996, the Supreme Court of India imposed an order, which had

a major impact on the aquaculture sector specifically in setting up the shrimp

farms in coastal areas. The Supreme Court declared:

Mangroves, agricultural lands, forest lands, wet lands and common village

purpose land will not be converted to shrimp ponds or for shrimp culture

purpose.

Imposed a ban on constructing or setting up shrimp culture within 1000 meters

of Chilka Lake and Pulika Lake

Only traditional and improved traditional aquaculture systems can be developed

in the Coastal Regulation Zone

Shrimp culture ponds and farms, which are above 40 ha of water-spread area has

to obtain a licence under the Water Act 1974 (Protection and Control of

Pollution) by getting an initial approval and No Objection Certificate of the

State Pollution Control Board of India.

These regulations were imposed, particularly to deal with the impact of shrimp aquaculture

industry and to safeguard coastal areas, seashore, waterfront etc. utilized for shrimp

production (FAO, 2009)

Policies

In February 1991, the Ministry of Environment and Forests issued a

notification under the Environment (Protection) Act, 1986. Areas like the coastal stretches of

seas, bays, estuaries, and creeks up to 500 m from the high tide level were defined as Coastal

Regulation Zone (CRZ) and a number of restrictions were imposed on industrial activities in

the CRZ and the extraction of groundwater was also restricted. Under the notification,

construction of fish processing units, excluding hatcheries was prohibited in the CRZ. It also

necessitated the coastal states to form Coastal Zone Management Plans, which were to be

accepted by the ministry. These plans were classified into four categories: CRZ-I, CRZ-II,

CRZ-III, and CRZ-IV

The CRZ Notification were issued to state governments, but none of them

formed the Coastal zone management plans. Due to various appeals made to the Supreme

Court for the implementation of the 1991 Notification, state government prepared the Coastal

Zone Management Plans.

Coastal Regulation Zones

CRZ Characteristics (Government of India 1991b)

CRZ-I Areas : These Zones comprise of ecologically sensitive areas, like mangroves and

areas between the high tide line and the low tide line. In this zone no new construction is

permitted landward of the high tide line. In the area flanked by the low tide line and the high

tide line, the only construction activities used for carrying treated water discharge into the

sea, amenities used for carrying seawater for cooling purposes, oil, gas, etc are permitted.

CRZ-II Areas: The areas under this zone are already developed, e.g., with housing or

infrastructure facilities, up to the shoreline. In this zone, construction of buildings is not

permitted on the seaward side of existing roads or existing official structures.

CRZ-III Areas: These zones consist of relatively undisturbed areas, like rural areas. This

zone especially consist areas, which are free of houses and infrastructure. The area up to 200

m from the high tide line is declared as no-development zone, although activities pertaining

to agriculture, forestry, and salt mining are allowed. Buildings can be constructed only from

200 to 500 m above the high tide line.

CRZ-IV Areas: Coastal areas in the Andaman and Nicobar and other small islands except

those selected in other categories. Activities related to agriculture, salt mining, and forestry

are allowed in the area up to 200 m from the high tide line (Government of India 1991b)

Government subsidies

Trends, issues and development

This section concentrates on the current trend, various issues and development

opportunities of Indian shrimp business in global market. This investigation will aid to

capitalise on the giant potential of shrimp market in coming years.

Trends

There is a declining trend of shrimp exports from India to USA. Shrimp

exports to USA from India were 41% in 2003-04, whereas in 2007-08, it has declined to an

alarming figure of 19%. The export market in USA has weakened by almost 50%. One of the

major reasons being the anti-dumping measures taken against production of shrimps in India

since 2004. Also the Japanese market for Indian shrimp exports has shown a negative trend of

27% in 2004 to 22% in 2007.

European union is forecasted to be the biggest emerging shrimp export market

for India (FIS world news, 2008). However to capitalise on the emerging shrimp business

market worldwide, India needs to develop and focus on some key areas of opportunities such

as: Develop a systematic distribution channels, Packaging / branding / marketing quality of

shrimps exports etc. There are various issues and developments that are highlighted in the

next section that can develop and expand the current shrimp export trend in India.

Issues

Shrimp aquaculture is and has been one of the most contentious issues in

India. In 1996, Supreme Court of India imposed a ban on intensive, semi-intensive and

extensive shrimp aquaculture in Coastal regulation zone (CRZ). However there is also an

Aquaculture authority bill in Indian parliament - Lok Sabha, to legalise shrimp aquaculture in

Coastal regulation zone.

There is continuous dispute and frustration amongst the coastal communities

and state governments due to lack of enforcement of Supreme Court order and confusion

regarding pending legislation. Some states and communities are positive and supportive of

shrimp culture practices due to economic growth and prosperity, wherein some oppose due to

local disagreement, negative environmental impact, and global criticism against Shrimp

culture. This uncertainty and frustration has affected the expansion of shrimp aquaculture in

India.

The major issues to be dealt to encourage development of shrimp culture in

India implies systematic adoption and development of bio-secured shrimp farm practices,

marketing and prices, infrastructure, access to institutional credit, improvement of forward &

backward linkages and favourable legislations and policies (MANAGE, 2008)

Culture management

Indian farmers face a major problem as cost of production is increasing and

there is decrease in the price, which they get from the market. Therefore its

necessary to use effective management practices to decrease the cost of

production and increase the profit margin.

The cost of feed used in the shrimp farming accounts for the 50 to 60 percent of

the total cost of shrimp production. Effective usage of technology is needed to

reduce the cost.

Environmental issues have been a major concern in case of shrimp farming in

India. Density of stock, management of water resources plays an important role

in the output of the shrimp farming process. Therefore Better Management

Practices (BMPs) should be used for sustainable shrimp farming. - MANAGE,

2008

Cost and marketing of shrimp in India and abroad

Shrimp products from India have a greater penetration in abroad than in the

domestic market. About 95 % of the shrimp produced in the country are

exported.

During the 1990s there was an oversupply of shrimp produced in the global

market. This led to a decrease in the price of the shrimp as the demand was less

and supply was more. Domestic market was unorganized and consisted of only a

low count variety. A larger share is also given to the middlemen and thus

reducing the profit margin further.

But there are huge opportunities for shrimp and other aquaculture products with greater

penetration of organized retail in India. At the same time, for increasing the domestic as well

as export business there is a need to develop a brand identity, which can ensure quality.

Finance and Infrastructure for shrimp culture

Easy availability of credit facilities is the need of the hour for farm management

and improving existing facilities. As most of the farmers belong to poorer

segments of the society, the access to credit facilities is not available to them.

Institutional has shownlittle interest in this sector, which is not sufficient.

The non-institutional players mainly dominate the finance sector, which has few

advantages over institutional financing. They are i) Easy availability of credit, ii)

Least formalities needed, iii) Personal relations.

Non-institutional credit is available in the form of credit sale of inputs like feed,

etc by the input suppliers. The recovery is in the form of cash or kind i.e. they

purchase the shrimp produced by the farmers. This is also called Buy- Back

system. The interest structure is also highly complex which makes the borrower

permanently indebted to the credit supplier. This lead to stagnation in the growth

of the industry and farmer is permanently caught in the web of debt.

There is a need to popularize micro finance with the cooperation of local banks.

There is a need to analyze the organizational strength of the clusters in the

coastal region before financing them. Insurancealso needs to be marketed in this

sector.

Due to the threat of diseases, farmers are increasingly using different chemicals,

which may affect the quality standards in other foreign markets like US and

Europe. To prevent this, there is a need to educate the farmers to produce greater

proportions of Tiger shrimp and freshwater prawns which will be accepted by

global markets.

DIVERSIFICATION of species

China ranks first in the production of aquaculture products with a total

production of 41.32 million tonnes (2004), while India ranks second in the

global aquaculture production with a total production of 2.47 million tonnes

(2004). China is also the highest exporter of aquaculture products in the global

market. The major reason for high production and export of aquaculture

products by China is Diversification. Chinese produce approximately 50

commercially important species in freshwater and 40 commercially important

species in marine water. Whereas in India, Penaeus monodon is the only

commercially produced brackish water species. The freshwater prawn

Macrobrachium rosenbergii is the only commercially produced freshwater

species in India.

Currently even though, the technology has advanced in certain areas, it is not

being utilized due to lack of awareness. For example, the technology for seed

production of sea bass, mud crab and banana shrimp is available and well tested,

but their production remains low. The reasons for the low production are as

follows:

1. The profit margins are not as high as in Tiger shrimp production.

2. Nurseries for sea bass as well as mud crab are inadequate.

3. Cost of feed increases when farmers try to diversify the products. But the most

important reason and issue of concern is the lack of knowledge among the

farmers about the potential market for these species. There have been minimal

efforts from the regulatory authorities to encourage farming of these species.

Tools for measuring sustainability

Sustainability means different to different stakeholders in the business. The

term sustainability in Indian shrimp industry includes economic sustainability, social as well

as environmental sustainability. Some of the techniques to measure sustainability are:

1. Ecosystem Approach to Aquaculture (EAA)

2. Carrying Capacity Evaluation

3. Mathematical programming or Operations Research based simulation

These techniques have their own limitations and the techniques of measurement need to be

perfected.

Environmental issues

The process of shrimp farming leads to the release of various farm effluents in

the aquatic ecosystem. Water bodies like coastlines get severely affected as the waste

produced from shrimp farms and hatcheries. Therefore there is a need to maintain a balance

between environment and growth in shrimp farming. As per Coastal regulatory authorities, an

Effluent treatment system is mandatory for farmers, which have a size greater than 5 hacters.

The treatment system should consist of three main components (a) settlement pond, (b)

biological treatment ponds and (c) chemical treatment ponds. The size and the design of each

component varies according to the characteristics of effluent produced in the farm. However,

it is recommended that 10 % of the farm area should be utilized only for effluent treatment

system. Out of this area, 70% should be used for biological process, 15% for chemical

process and 15 % for settlement

Developments

On 1st April 2009, the Indian government had introduced a new rule according

to which only antibiotic free-farmed shrimp should be used for processing and

later exported to foreign markets. For this purpose, the laboratories of the

Marine Products Export Development Authority of India (MPEDA) are

authorized for analysis and certification of farmed shrimps. In the southwestern

shrimp farming belt, the black tiger shrimps are being produced through an

integrated process (hatchery/ feed mill/ grow out) to obtain antibiotic free

shrimps - Globefish (2009)

Farmer's field day was arranged byThe National Centre for Sustainable

Aquaculture (NaCSA) on 16th October 2008 at Chinnapuram, Krishna District

to popularize the successful harvest of farmers of the society. Approximately

200 farmers witnessed this event from Krishna and neighboring Guntur District

of Andhra Pradesh. This lead to many positive results which are as follows:

1. In last 14 years, for the first time, Chinnapuram Society farmers were able to

achieve successful crop.

2. Unity amongst farmers and availability of good quality seed using contract

hatchery are some of the key reasons for the success.

3. The cost of production was also less and it was achieved without any usage of

chemicals

4. Farmers from neighboring district of Guntur who participated in the field day,

were encouraged to use the method for summer crop in 2009 - NACA, (2009)

The most dynamic development in the shrimp culture has taken place in Andhra

Pradesh, being one the hub of Indian fisheries. The distinct advantage in this

state is, there is no rice crop being intercropped with fish seed and the

unproductive saline land has been transformed into brackish water ponds. To

improve the shrimp production, the locally available dried fish trash is added in

the feed assortments. Another recent development is the unavailability of raw

materials like the dried trash. Also, to make the raw material out of animals and

marine origin is becoming very difficult. The bad weather also adds to all the

existing difficulties of shortage of raw material. Other type of meats are also

scarce because if we consider beef skin that mostly depends on the leather

demand. The primary concern is the feed preparation. It takes a lot of time and

additionally three man-hours are required for the collection of fish and beef for

the feed. - Wood et.al (1992:6).

Development in shrimp aquaculture also resulted in growth of several ancillary/ related

activities such as feed production, seed production and processing units as well as production

of equipments and aquaculture machineries. On the whole, these activities and development

has contributed in generating revenues and different options of livelihood along with

employment opportunities in the several coastal areas of India.

Theoretical Framework

Introduction

How a nation / company or any organizations compete and what strategies

they implement are questions every business mind wants to know. Businesses today face a lot

of difficult choices, they could either provide products and services at a low cost or wait to be

beaten on price or they could design a long term strategy that would provide customers with

products, services, answering their needs and an unforgettable experience which would earn

them genuine loyalty. Lot of authors have spent years to gather knowledge on how businesses

can create a strategy that will allow them to be different from their competitors, provide them

a competitive advantage and methods of analyzing different sources of competitive

advantage. I will discuss briefly what competitive advantage is, its different sources and three

key methods of assessment SWOT analysis, Porter's five-theory analysis and PEST (EL)

analysis. Further, I will investigate on business strategy and competitive advantage of shrimp

aquaculture industry in India and its limitations.

What is Competitive advantage

'Competitive Advantage' is an advantage over competitors, which a business

gain by doing things differently and providing the products or services to customers with

increased value, low cost that in return generate profits. After the business has attained a

competitive advantage, it's vital to sustain it in order to stay ahead of competition, which

requires a long-term strategy - Porter, M. E. (1980). According to Jay B. Barney (1991:99)

"Creating sustained competitive advantage depends on the unique resources and capabilities

that a business brings to competition in its environment".

India has successfully managed to become one of the leading nations in

shrimp aquaculture industry. According to Porter (1998:15), there are three basic types of

competitive advantage namely; cost leadership, differentiation and focus. Cost leadership is

when a company out prices its competitors by reducing the costs incurred to produce or

manufacture and distribution products and services significantly. This is achieved by

concentrating on improving the efficiency of the supply chain and by economies of scale.

Differentiation is the core aspect of a business, competitive strategy is about being different.

It means deliberately choosing a different set of activities to deliver a unique mix of value.

This is the advantage that a business has over its competitors in the same marketplace, the

special and unique benefits that no one else can give your customers. This is where India is

lagging behind and has a huge potential to explore.

According to Michael hammer "More value added (MVA) means that you

give the customer more, perhaps far more, than you ever have before". Businesses that are

successful in a differentiation strategy often have leading scientific research facilities, highly

skilled R&D and stronger sales team to communicate the perceived strengths of the product

to the consumers. Businesses that use focus strategy will concentrate on niche market or a

particular segment of the market and by understand the unique demands and needs of the

customer they will then develop specific products for their consumers. Shrimp industry in

India has lot of scope to improve in this parameter, by reducing waste and optimum

utilization of resources from every step of the production process, from raw material to

cultured shrimp. India must concentrate to provide the consumers, what they really want at

the highest quality and affordable cost. - Hamel.G and Prahalad c.k (1989).

India's Shrimp aquaculture - strategy and competitive advantage

There are various models and tools which can be used for assessing the

sources of competitive advantage of shrimp culture industry in India such as, Porter's five-

force theory, SWOT analysis, PEST (EL) analysis, Value chain Analysis, Ansoff's six factor.

The most important and commonly adopted method of assessing competitive

advantage is a framework developed by Michael Porter known as Porter's five-force theory.

Similarly, SWOT and PEST (EL) analysis are key assessment tools for strategy building. I

have assessed the competitive advantage of India's shrimp industry with the help of these

tools.

Porter's five-force theory

One of the most important and commonly adopted method of assessing competitive

advantage is a framework developed by Michael Porter known as Porter's five-force theory

The Porter's 5 Forces tool is a simple but powerful tool for understanding where power lies in

a business situation. It helps businesses to analyze the strength of their current competitive

position and the strength of the position they are looking to move into. They five forces are:

Threat of new entry: The easier it is for the business to enter the market; the

harder it is for existing industries. The new entrants can therefore easily

dominate the market environment in terms of prices, market share and customer

loyalty. The threat of new entries mostly depends on the barriers to entry which

are: economies of scale, government regulations, high investments and fixed

costs, protected intellectual properties like patent rights etc

Competitive Rivalry: This describes the intensity and strength of competition

between existing players which results in pressure on prices, margins etc. This is

when the competition is high i.e. similar strategies, price competition, barriers of

exit, are high etc.

Threat of substitute products: The scope of different products and services

replaced by yours with lower prices or better performance parameters for the

same purpose.

Bargaining power of suppliers: Power of suppliers to drive up the prices.

Supplier's bargaining power is likely to be high when there are few suppliers, no

substitutes for the particular input, and the switching options are expensive.

Bargaining power of buyers: Similarly, powers of customers to drive down the

prices. The buyers impose pressures on suppliers when there are less number of

buyers in comparison, substitutes available, switching options are simpler.

SWOT Analysis

It is a powerful tool for auditing an organisation and its environment. It's a

first stage of strategic planning in any organisation.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. .

Strengths and weakness describe internal factors of a company that are favourable or

unfavourable in achieving business objectives whereas, opportunities and threats are the

external factors - Dess.G, Lumpkin.G.T and Taylor.M (2004)

PEST (EL) analysis

Another method of assessing the sources of competitive advantage is PEST (EL) analysis. It

is an investigation of the external macro environment that can influence or affect the

business. It consists of: - Johnson G., Scholes K. and Whittington K. (2004)

Political Factors

Economics Factors

Social Factors

Technological Factors

Environmental Factors

Legal factors

Research Methodology

There are various research methods and strategies, which are adopted for data

collection and analysis. The above investigation and literature review of shrimp industry in

India forms the base in context of research approach. Two methods that are appropriately

used with research paradigm i.e. qualitative and quantitative methods (Guba and Lincoln,

1994: 105). There is no a single research method. There are several different kinds of data

required to resolve single problem and the degree of understanding to select the means to

obtain the data.

Types of Research

There are different types of research conducted depending on the purpose of

study. Mainly the purpose of any research can be classified into three: descriptive,

exploratory and explanatory. Descriptive research often deals with a subject area that already

exists and it assists in getting detailed description of a definite characteristic or a relation

between various characteristics (Yin, 2003). Exploratory research is dealt with a fresh or

undiscovered topics where there is very little or insignificant research done and its often

termed as a hypothesis. Explanatory research is used on the knowledge and proposition

previously developed in order to formulate based on the research and experiments already

tested (Patel and Davidson, 2003).

My research is a mixed approach with exploratory and explanatory purpose.

Since my intention is to investigate the current functioning of the industry by reviewing

literature and creating a new approach and model to develop the business of shrimps in India.

Later I have studies the competitive advantage of Indian shrimp industry to identify the real

factors affecting the growth of business.

Research Purpose

The principle objectives of my research are,

To explore the current shrimp business environment in India.

To analyse the performance of aquaculture industry specifically shrimp

aquaculture.

To investigate the opportunity areas and develop management of aquaculture

shrimp industry.

To instigate a new approach and model to improve the quality of cultured Indian

shrimp.

Research approach

The two commonly used methods while conducting the research are

quantitative and qualitative research methods. The difference between the two methods is

distinguished during the treatment of data i.e. after collecting the data and not during the

course of collecting it (Denscomb, 1998). Quantitative research method deals with numbers

and quantities transforming the data collected into statistical analysis. It is more focused on

testing numbers and statistical hypothesis particularly when there is large sample size

(Saunders et al, 2003)

Qualitative method is more of comprehension and knowledge based data. It

does not engage into numbers and statistical analysis, it interprets the collected data into

words. It is mainly used for exploratory research purpose for detail understanding of research

(Saunders et al, 2003). Within the qualitative research method the two most important

approaches are structured approach and grounded approach. Structured approach is based on

the theories and models that already exist whereas the grounded approach is an approach of

developing a theory or framework and thus more time consuming and result oriented (Yin,

2003).

I have selected the combination of qualitative and quantitative research

approach for my report due to the size of target group and limitations of collecting primary

data. Some of the limitations of qualitative method is: i) difficulty in obtaining access and for

interviews ii) limitation of not being physically present within the research area iii) time

constraint (Saunders et al, 2003).

Bangladesh shrimp seal of quality assessment (SSOQ)

Need of quality assessment and improve the standards of shrimps

in India

After investigating the Indian shrimp industry, its current position in global

market and its competitive advantage.

One of the fundamental problems of Indian shrimp industry is open and easy

access - easy access to enter the shrimp industry. As there are no barriers to enter the shrimp

fisheries market, the production of shrimp reaches the point where the total cost of producing

equals total revenues. There is a need of management interventions and control on access

shrimp fisheries i.e. limiting shrimp catches, closed seasons etc. to prevent the economic

overfishing in long term. (FAO, 2009)

There is considerable market penetration for Indian shrimp in abroad than at

home. Around 95% of the total cultured and captured shrimp are exported in global market.

And since the shrimp culture market has experienced the situation of over supplying shrimps

products in early 1990's, the profit margins and prices of Indian shrimps has dropped

significantly. It's a perfect example of price is a function of demand and supply.

There are several other reasons to develop and transform the current practices

and adopt Better Management Practices to improve the standards of shrimp in India.

COMPANY PROFILE

Tropicool Foods Private Limited(TFPL) was established to produce

IQF(Individually Quick Frozen) Fruits, Vegetables with a state of the art plant located

strategically at Hubli, Karnataka. We have built a strong core team of professionally qualified

industry experts in processed foods and agriculture.

The Company has international JV with Jogrex NV. Jogrex NV BELGIUM is

a producer of Frozen vegetables mainly Silver Skin Onion & Parisian carrots.

The Company has also profitably partnered with KAPPEC (Karnataka State

Agricultural Produce Processing and Export Corporation Limited). This is the state’s

first project under the PPP model (Public Private Partnership) providing us credibility with

the farming community.

Food is an integral part of our social and cultural life quality and hygiene are

critical factors when we choose any food product. TROPICOOL FOODS PRIVATE

LIMITED was established in 2009 with the aim to produce a wide variety of high quality

IQF (Individually Quick Frozen) Fruits and Vegetables. The company is located strategically

on the outskirts of Hubli, Karnataka, and Southern India. Here in the midst of growing area,

we bring out the very best from local farming operations which enables us to produce fresh

from the fields, deliver on time and process in their prime.

The company largely exports the products to Europe and has a strong focus on

the emerging retail market in India where company can provide the products for both

distributor sales as well as retail sales.

The company can produce and/or source products and product mixes tailor-

made to customer requirements.

VISION OF THE COMPANY

Company will be Adaptive, Innovative and Responsive to be a leading

organization to service the global market with superior quality IQF products gained through

experimenting in Technology and processes suiting Indian climatic conditions while helping

society around us to grow in sustainable environment.

MISSION STATEMENT

To develop products and processes so as to set new benchmark in selling basket of

frozen products

To bring out the best in local talent to complement company’s functioning

To develop agricultural practices and methods to build loyal network of farmers

To achieve standards in product quality in order to be able to service clients all over

the world

Based on the questionnaire interview with the manager of Tropicool foods private India

ltd we could analyze on the following issue:

Tropicool foods private India ltd has commenced its export in the year 2008, and has

been exporting mainly to European countries which was decided based upon the

market potential of its products.

The procedure they followed was through direct contact with the customers in the

exporting countries.

The prices they quote are in US Dollars or in EURO Dollars and they do not export

the same in the domestic market.

They price differently for different market and the possible reason for price variations

is demand of the products.

They do send products to foreign customer directly. The product they exports is not

exactly same as domestic market.

They decide on differentiating products for exports on basis of the requirement and

the way the domestic market wants.

They have the certification of FSCC, ISO and FPO for the quality standards.

They do advertise and promote their products through overseas exhibition.

Through Mumbai port they freight their products.

They use container services at your plant for loading export cargo.

Director of the company makes policy decisions about international marketing /

exports in your firm

They plan to increase exports 20% every year

They consider fluctuations in foreign exchange rates while deciding prices.

They do get export incentives for exporting your products.

They have separate production / operations set up for exports.

They participate and exhibit their products in overseas exhibitions for export

promotion.