October 8, 2008
Thai company buys stake in major Indian shrimp feed manufacturer
Thai Union Frozen Products sees potential in India''s expanding market, therefore acquiring stakes in India''s second largest manufacturer of shrimp feed.
Thai Union Frozen Products (TUF) has acquired a 14.99 percent stake in Avanti Feed, India''s second largest manufacturer of shrimp feed in a deal worth about Bt40 million (US $1.16 million).
The investment is part of TUF''s plan to boost its market for both shrimp and non shrimp products.
The company sees India''s rapidly growing economy and the increased purchasing power of its people as a strong potential for shrimpproduction and non shrimp products.
TUF purchased 1.19 million shares in Avanti Feed for Rs 40 a piece. The Indian company is listed on the Bombay Stock Exchange and exports both shrimp feed and frozen shrimp.
TUF president Thiraphong Chansiri said the investment followed long-term ties between TUF subsidiary Thai Union Feed mill (TFM) and Avanti Feed.
TFM specialises in production and distribution of feed products for shrimp and fish in Thailand. Over the past few years, the Thai firm has been supporting Avanti with technical know-how on feed production for black tiger shrimp.
The Indian government restricted local farmers to raising only black tiger shrimp until recently. Its decision to also allow white shrimp farming, gave the industry potential to increase production and boost export volume.
Thiraphong said as a result, TUF expected strong growth in shrimp production in India and promising opportunities in the shrimp feed business. TFM has developed expertise and skills in white shrimp feed manufacturing that should benefit Avanti through the transition.
The Thai company expects to expand its sales of canned and frozen seafood products in the Indian market through the new connection. TUF''s seafood products such as tuna can fit easily into the Indian diet, he said.
TFM''s shrimp feed business contributes significantly to TUF''s financial performance. In the first half of the year, TFM''s net earnings grew 120 percent on-year on a sales increase of 5 per cent.