Business Standard: March, 2014
Chennai: India's seafood export industry, dominated by small and medium enterprises (SMEs), and growing at 20 per cent a year, will soon get a shot in the arm. In a bid to help entrepreneurs, the Marine Products Export Development Authority (MPEDA) under the ministry of commerce is undertaking a major co-branding drive, which will promote the brand equity of Indian marine products in regulated markets.
Seafood exports from India are expected to touch $4.3 billion in the current fiscal year and $10 billion a year by 2020, according to MPEDA.
A J Tharakan, president, Seafood Exporters Association of India, said there is no large company in this industry, which comprises 400-500 exporters. It consists almost entirely of SMEs, most of them family-run businesses.
There are some 150 major players, with about 100 exporters contributing 70 per cent of total exports. The largest of them have revenues in the region of Rs 100-400 crore. The industry is a 100 per cent net foreign exchange earner.
Leena Nair, chairperson, MPEDA, added that value-added products are gaining momentum. They used to contribute around five per cent of total seafood exports about three years ago, but now contribute around 17 per cent. The target is to increase this first to 30 per cent and then to 50 per cent in the next three to five years.
As market promotion has assumed special significance in view of growing competition and regulation from other seafood-exporting countries, MPEDA believes that there is a need to step up promotional programmes in major overseas markets and develop better rapport with the trade and officials in importing countries, said N Ramesh, director - marketing, MPEDA.
He said MPEDA has decided to tie up with established brands for promoting Indian seafood products and, as a preliminary step, it signed a co-branding agreement with Sysco Corporation Inc for the promotion of Indian Black Tiger Shrimp in the United States a few years ago.
MPEDA also signed a similar agreement with Japan's Aeon supermarket chain recently, and is looking for more such tie-ups in European countries. "Over the next few months we want to have at least 10 such-tie-ups with foreign supermarket chains," said Ramesh.
The MPEDA logo will be awarded to processors who satisfy the standards fixed by MPEDA, he noted.
With more and more companies realising that demand for value-added products is picking up, and the return on investment is also high, there has been a jump in investment, said Ramesh. MPEDA estimates that in the next four to five years, the industry is poised to increase capacity by 50 per cent with an investment of about Rs 3,000 crore, according to Ramesh.
Over the years, the industry has added capacity in order to export value-added products, Tharakan said. So far, India has been exporting the raw material to China and Thailand, where they are converted into products for the ready-to-eat and ready-to-cook segments.
One key concern, he said, is that the industry doesn't have a coordinated conservation and fisheries policy. The states have different policies and this has an effect on the industry. With the exception of Goa, the state governments have not put in place any conservation measures.
While conditions are favourable for exports at present, better coordination between ministries will be needed and export procedures speeded up, to help farmers, the MPEDA officials said. The Central and state governments need to bring in appropriate policies in support of the industry and for the welfare of fishermen in the coastal areas, they added.
The US, the European Union and Japan are the major destinations for Indian seafood exports, while China and South East Asia are also emerging as favourite destinations.