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-adozen 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

1998) The varieties of culture systems that can be adopted as per the available resources are quite wide. Integrated fish farming with poultry. Composite carp culture. the utilisation of natural resources and manipulation of biological systems. pigs. etc. (Midlen A. However. Almost all of the states in India have their dedication towards . In India the heterogeneous culture systems that have attained best possible achievable production rates are classified as follows 1. These classifications are based on the distinct types or species being cultured and on geographical location and the socioeconomic context. 7. Sewage-fed fish culture.. ducks. there is one common thing in all forms of aquaculture i. it is most commonly in pond systems through intensive. The state of Andhra Pradesh leads the production with the highest contribution of about 86% of total India's seafood production. semi . Weed-based carp polyculture. However when they are farmed or cultured. Pen culture. Central Institute on Freshwater Aquaculture (CIFA). 4.intensive or extensive management systems. horticulture. (1999). Focusing on the importance and significance of aquaculture globally and to improve aquaculture research and development. 2. Intensive pond culture with supplementary feeding and aeration. 9. Central Institute for Brackish water Aquaculture (CIBA) and National Research Centre for Cold Water Fisheries (NRCCWF). 6.. and Redding T. 8.grow naturally in brackish water regions of the world.e. 5. Classification of various culture systems There is different aqua culture production systems used widely across the globe. Another important area of concentration in Indian Aquaculture is the reserved water percentage of about 60 percent for only Prawn farming. Biogas slurry-fed fish culture. the Indian council of Agricultural research rearranged the fisheries research institutes viz. 3. Running-water fish culture .Gopakumar et al. Cage culture.

i. is almost not available in Indian farming. . hatcheries and feed mills have proven to be the pioneers of improving opportunities. has reached the industry state. Brackish water culture has also been substantially used in the area of aqua farming. salt resistant deepwater paddy. which holds a very low key for the Indian Aqua culture.. 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. The expansion of shrimp farming has surely created opportunities in the coastal areas.. a database of all the human resources associated with the shrimp and fish farming.fisheries development keeping in mind its significance to the whole sector.Subhasinge and Currie (2005). there are other species like shellfish and finfish. No doubt. Catla Catla. . The commencement of All India Coordinated Research Project (AICRP) was a great breakthrough towards the brackish water aquaculture.Subhasinge and Currie (2005). Considering the brackish water aquaculture. based on the production and awareness of its importance. and Cirrhinus mrigala are those three significant carps. Pokkali. On the other hand. As far as the brackish water sector is concerned. About 300 000 employment opportunities have been generated due to the shrimp aquaculture. As Bhatta (2003) did the research regarding the average age of Indian aquaculture farmers. it came to 47 years. It is restricted to: 1. .e. . Even Andhra Pradesh has shown a positive movement in the percentage of earnings for the shrimp farmers. human created impoundments in coastal wetlands. some experiments on mono and poly culture of mullets whiting. finfish. The highest contribution to the total aquaculture production is because of the three Indian Carps. Carp. It had considered fish and shrimp farming to be its options.Subhasinge and Currie (2005). There are certain things that Indian system also lacks. is the hugely significant species farmed for the freshwater aquaculture. One of the crucial productions of brackish water. it is highly supported by shrimp production and the giant tiger prawn. Indian aquaculture. Labeo Rohita.e. shrimp holds the similar position in the brackish water sector. Whereas. mainly. i. In India. 2. Bheries.spots and milkfish have depicted the latent for farming. pearl .

FAO (2009). saline water and brine water. And in recent years. Out of which approximately 70 % of produced shrimps are traded internationally. is considered to have the required potential and capabilities to become the next most powerful nation. captured and cultured. over capacity. followed by cooked and boiled form respectively. This distinctly indicates the huge potential and global market of shrimp industry. has weakened the foundation of the industry. around 60% of shrimps are in frozen or preserved form. The conflict between the small-scale industries. Some construction projects can give rise to brackish water collection due to flooding in that particular area. Aquaculture in India India. And most of the countries are completely dependent on the monetary gain of shrimp industry. There could be freshwater. exploitation. Around 7 million fishermen are employed in fisheries sector. Out of total shrimps traded world wide. around 60% of shrimps are in frozen or preserved form. There are various other key sectors that have a significant contribution in India's growth and fiscal revenues.Krishnan and Birthal (2002:81). Nearly 6 million tonnes shrimps are produced globally i.e. followed by cooked and boiled form respectively. Agriculture accounts to about 27 % of India's gross domestic product (GDP). It is imperative to consider the different water conditions when it comes to aqua farming. 65 % of the total employment of the labour force and most importantly it accounts to 21% of total exports. being one of the central and prime developing nations. Out of total shrimps traded world wide. Agriculture accounts to the maximum social and financial revenue of India. 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 . which makes it the most important and principal fisheries commodity worldwide . one of the promising and upcoming divisions is 'Aquaculture' .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. Generally brackish water is the type of water. which is more saline than freshwater but not as much as the water from the ocean. Fisheries have always been a traditional avocation in India. etc. brackish water. However the biggest challenge for fisheries institution is in the developing countries.

Shrimp. and is referred to. There are. (2006:47). Some exceptionally common type of aquaculture systems are Ponds. Simpler systems like small family ponds are also used in some situations. The other methods like indoor rearing is also frequently practised. Everything has the intention of increasing natural productivity. In some cases it's also possible that some other stream is diverted to the very pond. As per FAO's fisheries and aquaculture department. it contributes to about 1% of total GDP. as decapod crustasceans are the majorly concentrated areas. 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 sector has shown a decent growth and potential . on the contrary. On an average. The water in these methods is re-circulated. and in brackish water production. For brackish water the utilization is even less at about 13 percent of 1. These ponds are either naturally created or manually by aqua-farmers near their house and it gets filled normally with the natural rainwater. The increase in per capita income will accelerate the consumption of fish. when compared with the world. Its been researched that consumption of fish in India is comparatively quite low. . The culture systems adopted also vary greatly relying on the geographical culture and the financial capability of the farmer. which is the term.36 million hectares of ponds and tanks for freshwater aquaculture. In general. Furthermore. Indoor-rearing. Almost 50 percent of comprehensive aquaculture is of herbivorous and filter feeding fish like carp. Broadly. India's involvement in the worldwide fish production has been increasing since a decade now.Anon1. The very reason for the same is the prices of fish. 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. India utilises only about 40 percent of the huge availability of 2. The total fish production (marine and inland) projected in 2006-07 is 6. India is the third largest producer of fish and has important contribution to the world aquaculture. India's contribution is more towards freshwater aquaculture.8 million tonnes. Indian aquaculture has shown six fold growth over the last 20 years.exports and improving the foreign exchange. In the freshwater production. As can be seen in the following figure. which is a huge ordered group of arthropods. the very high-tech systems like some intensive closed units or some sort of sea cages. Carp. outdoorrearing and coastal aquaculture. used for various species of an oily freshwater fish.2 million hectares.

Wood et. producing around 120. The following section throws some light on the classification of culture systems as per Indian aquaculture.000 tonnes shrimps each year (Coastal Aquaculture Authority. As a result of continuous strong demand. which provides a more suitable location for shrimp farming. Background of shrimp culture in India India has a long coastline of 8129 km along with a vast continental shelf of 0. Krishna river. These plants are mainly seaweeds. 2006). and Kavery river. shrimp production has been increasing again . Mangroves are mainly located in the Sunderbans delta region. About 40% of the farmed area is under traditional farming and remaining portion of the farmed area is under scientific farming (Kurup B. they could grow either on the seabed or racks in shallow coastal waters. In the following years.24 million hectare of brackish water area .. from 1998 onward. form the largest portion of the shrimp produced in India. During eighties growth of shrimp farming was slow and traditional farming accounted for a production of 30.Kurup B. culture activities in Coastal Regulation Zone (CRZ) area were stopped due to Supreme Court rule. The west coast has a narrow continental shelf with a relatively rocky shoreline. from Gujarat in the northwest to Kerala and Tamil Nadu in the south to West Bengal in the northeast.There is certain population in current world aquaculture that concentrates on the production of plants. Farming faced . shrimp cultivation in India has experienced very fast growth. Recent production data suggest that. (2008). 2002). whereas the east is mainly estuarine.50 million km2 and involves nine states. during early nineties. and white shrimp / Penaeus indicus. an exponential growth took place because of high export demands and liberalized economic policies of the Indian government. which extends over West Bengal and into Bangladesh. in particular. The viral "white spot disease. during the early 1990s (see Table 1). al (1992) This growth was boosted due to higher participation of private sector and practice of semi intensive methods of farming. as reflected in the production figures for the subsequent years. Tiger shrimp / Penaeus monodon. Mangroves are also found in the deltas of the major rivers such as the Godavari river.000MT. has caused great damage to Indian shrimp industry. In the next decade. India avails 1. 2008 and Vasudevan. One of the most common and popular practices in coastal areas of India is Shrimp culture." which was first observed in India in late 1994.

The main area in India is West Bengal and Kerala. 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. especially China. Indicus is followed. Similarly. Monodon and P. However. As Wood et. has got a good potential to have a strong economy. Shrimp industry in India India. There have been many countries that became aware of shrimp farming and the importance of aquaculture towards the growth of an economy. is surprisingly associated with the rice production.a major setback due to outbreak of diseases and alleged negative impacts on social and environmental aspects. . being one of the developing nations. In this kind of culture. there is another culture system. This culture in the Indian land has been termed as 'bheri' culture. which is known as paddy-cum shrimp culture system. there was a . a brood stock-hatchery phase for producing seed or post larvae. (1992:4) has explained the extensive West Bengal shrimp culture. It is a twostep process. farmers in Andhra Pradesh attempt to culture a low input second crop of shrimps. Moreover. Many farmers in the rural coastal areas still depend on the wild shrimps for the development of quality seed. wherein the water salinity level is low do the prices of the immature shrimps. some standard farming practices are used for shrimp farming as well. There always are some or the other kind of obstacles for any type of production. In India. As per Leung and Engle (2006:247). out of which only four have commercial importance. where exclusive stocking of P. Some of the farmers in Bangladesh still use wild seed. no feed supplementation is normally carried out. a phase that occurs in earthen culture ponds. Out of total area available for shrimp farming nearly 60% is farmed area and rest 40% is under traditional farming. the paddy fields are used for shrimp cultivation again depending on the requirement. the shrimp aquaculture was already at its peak in the neighbour countries. which had been washed over the rice field outskirts bunds during the time of high tides. there are around 56 species of shrimps available. first.Leung and Engle (2006:247). This is because the rice was cropped or rather intercropped with naturally stocked fish and shrimp seed. . al. Shrimp production and exporting started in mid eighties in India. in India.Yadava (2002:1). By that time. One of the concerns for Indian shrimp farmers is. Second. the production totally relies extensively and only on hatchery-reared post larvae shrimp. In this culture system. In Southeast Asia.

Cultured species There are hundreds of different species inhabit the marine and brackish waters of the world.e. Andhra Pradesh. which had created havoc and had de-motivated the shrimp farmers. The different shrimp species cultured globally are:   Giant Tiger shrimp (Penaeus monodon) Western White shrimp (Penaeus vannamei) . However. By the year 2006. the giant tiger shrimp 'Penaeus monodon' and western white shrimp 'Penaeus vannamei' accounted for almost 85% of global shrimps production. 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. These species are named as Panaeus.com. shrimp farming has offered employment to about 0. In a country like India. (shrimp news. its very crucial for any sector to create employment. The installed production capacity for the same is 11 billion post larvae (PL). penaeus monodon. There are also about 200 hatcheries in production. There is also lack of diversity in coastal aquaculture in India. The concerned people have also generally accepted it now that the efficient management activities could make shrimp farming easily sustainable. Apart from raising the standard of the country at the international level. 2009).3 million people. constitutes almost the total crop produced. All cultured and majorly captured shrimps across the globe belong to Penaeidae family of decapod crustaceans and are termed as "Penaeids". which is also known as tiger shrimp. A single species. 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. which have come with the output of about 7 billion PL. shrimp farming has also created ample employment opportunities. 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.disease called the white spot disease (WSD). Moreover. There is roughly around 280 shrimp hatcheries spread all over the country.

& Engle C. 247). intensive and semi . Out of which. Shrimp farming provides high returns in terms of investment in areas of production. for more effective integration and the use of land and water resources in the coastal areas. semisulcatus. P. named. Blue and White shrimp Chinese White shrimp (Penaeus chinensis. (2006). extensive. indicus. presently. In scientific extensive farming. inputs (feeds.. merguiensis have commercial importance. Based on the intensity the amount of input (stock. stocking density.        Indian white shrimp (Penaeus indicus) Western Blue Shrimp (Penaeus stylirostris) Red. (Leung P. the most commonly adopted shrimp farming practice in coastal areas are scientific extensive shrimp farming and traditional/ improved traditional system. etc) used. Practices and systems of shrimp culture The four classified production management systems of shrimp culture in India are traditional.intensive. In India extensive production systems of shrimp culture is more profitable. also known as P. feeds etc. fertilizers etc). The following systems are categorized on the basis of area. 1999. In extensive production management system there is very little or negative complementary feeding. However in intensive and semi intensive systems. about 80 per cent of the shrimp culture activities in the country are under traditional/ extensive systems . processing and exports and is regarded as a high pay-off economic activity (Krishnan et al. 2009) In India. 2006) . yield and water management.Coastal Aquaculture Authority. tiger shrimp is the most commonly cultured species with the established and suitable advanced technology. Peneaus monodon. Other species like P.) and yield increases. water or soil treatment (air. use of supplementary seed and feed are encouraged (Coastal Aquaculture Authority. p. At present. orientalis) Japanese Kuruma shrimp (Penaeus japonicus) Banana shrimp (Penaeus merguiensis) Brown Tiger Shrimp (Penaeus esculentus) The Atlantic White Shrimp (Penaeus setiferus) (Ref: FAO. 2000). the use of commercial feeding and stocking density is very high to speed up the growth of shrimps resulting high production. 2006. and P.

labour cost being 15%.07 cost per kilogram. respectively. which is very high compared to other nations. (Leung P. In addition. and they contain supply and drainage canals which control flow of water.  Modified extensive systems: The ponds used in this system are prepared with tilling. cost of feed constitutes major component to per unit cost of shrimp produced.25 to 1. Average production of semi-intensive farms in India is about 2200 kg/ha/year (ADB/NACA 1998). Other limitations of the traditional production system remain in this system for example no control on entrance of predators. Feed consists of a combination of local feeds and locally produced or imported pellet feeds. irregular pond depths.  Semi-intensive systems: The ponds are 0. Density of stock ranges from 15-30/m2.. and fertilization and contain higher density stock. & Engle C. traditional ponds consisting stocked shrimp seeds are used. In this method. Thus extensive production system management is more profitable in India.50 ha in size. which produces shrimps at US$ 1.25-0. in the range of 5to 10/m2. and complete dependence on food naturally available in the ponds. with four aerators per pond and a centralized drainage system to remove sludge and manage water . Overall production increases from 300 to 600 kg/ha/year. liming. 247)  Traditional aquaculture method: In this type of method.  Extensive systems: In this method. 2006. inputs i. average production is low and ranges from 200 to 500 kg/ha/year of mixed species. lowest compared to many other nations.  Improved traditional systems: In this method.  Intensive systems: The ponds are 0. with one or at the most two crops a year. Chemicals are also used along with imported pellet.e. one or two crops in the range of 600 to 1100 kg/ha can be produced . The ponds are stocked at rates of 2-5/m2. These ponds are filled with tidal water without any control over quality. square shaped ponds with excavated walls are used.0 ha in size. India is one of the lowest productions cost country. Followed by seed cost that accounts to 35% of total production cost in India.In intensive and semi intensive production systems. p. However in extensive production system. ponds consisting of a large proportion of various fishes and a small proportion of shrimps are used. Water is supplied to these ponds through canals.

However. all the major European countries exhibit a stable or increasing trend for shrimp imports. like salinity control. Coastal aquaculture shrimp production also showed negative trend at 75. Business and Sales of shrimps in India Shrimp is and continues to be the largest single commodity in terms of value. the United States of America and Japan. the EU strengthens its position being the leading shrimp market in the world. and accounts for nearly 17 percent of the total internationally traded fishery products .2009).6 crops per year (ADB/NACA 1998). Density of stock is 30 to 80/m2.FAO (2009).flow in the pond. Many cultured shrimp producers are now looking for value addition strategies and diversifications with margins and prices under pressure. about 143.8 billion US dollars.915 crore. in India it is not frequently used (James 1999).997 tonnes from the utilized culture area of 1. Viet Nam and Thailand.com.9 per cent in production area. This system is common in Thailand and Taiwan. India contributes approximately 6% of global aquaculture production (Hindu Business Line . The major exporting countries in terms of value are China.079 crores in export sales that is equivalent to 0. Shrimp imports were weak in the year 2007 in major shrimp importing countries i. During the year 2008-09 the aquaculture production was declined to 88. The decline was around 28 % in quantity produced and 10. (all business. with 1.54 lakh hectare area. generating foreign reserves of about Rs. are same as for semi-intensive systems. Prices for wild shrimp went up in beginning of the year 2008. October 2006).08 lakh hectares. With the exception of United Kingdom. Despite of increase in export volumes. its market share and average price demonstrates negative trend. 4. . whereas due to fall in demand the prices of cultured shrimp showed downward trend. (allbusiness .170 metric tonnes of shrimps have been produced from a 1.com. In 2006.803 tonnes with an estimated value of Rs 1. compared to previous year. Shrimp production At present there are approximately two lakh farmers engaged in shrimp aquaculture. 2006).e. The average production in India is about 4500 kg/ha/year. Many other parameters.

and few other countries have shown evident decrease in Shrimp demand. $1.02 lakh tonnes. (Antony M et al. Italy. The total of marine exports in financial year 200809 was 6. US. which accounts for record earnings of Rs 8. 2009 Contribution to the Indian economy Shrimps being the principal export item and one of the largest export industries in India. but European consumer is now becoming more calculative about the average money spent on daily basic commodities. By the end of 2008. Shrimps contribute more than 52% of the total seafood exports (quantity) in which EU accounts for more than 37% of the total shrimp exports. the demand for Shrimp has declined noticeable. due to festive period. being high priced commodity. Since very long time.63 million in US Dollars (Hindu business line. 2009).607. . but a decline was seen in the imports of shrimp in European countries and Japan. The best solution to improve and sustain the shrimp business is through the process of diversification and exploring regional and domestic markets. resulting in the downward movement of the Shrimp price tag.Decline in demand for shrimps Shrimp imports grew to some extent in US. China and US with 16%. One of the key reasons for the decline in demand is the current global economic recession.e. due to which the shrimp demand has remained constant because Shrimp is highly consumed in restaurants. (EUROSTAT. Globefish. Shrimp exports account for more than 70% (in terms of total earnings) of marine products.7 % respectively (Hindu business line. The French consumers have maintained their eating out lifestyle. The purchase of shrimp is more like to get affected.908. 2002). However the export-earning share of EU has dropped in dollar terms revenue to 32. which has not affected all countries equally. there is increase in sale of Shrimp expected. Spain. the household consumption of Shrimp in European market has increased by 0. 14% and 13% respectively. due to recession. However. by the end of the year 2009. European markets had been lucrative for shrimp exports. Currently demand is still low in all three major shrimp 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. 2009).94 crore i.1%. 2008) However. Uk. however.

shrimps are mainly exported while others are mainly consumed in domestic market. Compared to any other finfish produced by aqua culture. land. one of the century old regulation that penalizes for killing of fish through i. which was valued over US$ 0.e.61 million. There are many laws relevant to shrimp aquaculture that are adopted at state level and at central level. around 66% of total exports were contributed from cultured shrimp and prawns.271 tonnes at $278. water.80 billion (FAO. poisoning of water  Environment Protection Act (1986). In 2008-2009. the price of the produce is easily influenced by supply and demand. Andhra Pradesh is the second largest producer. In addition there is no certification system available for the sale of produce. the state legislatures has the power to make regulations on various matters and issues. 2009) With respect to India's poor performance of unit value of exports and lack of value added products.12 million metric tonnes valued at US$ 1.19 per kilogram compared to US of US$ 2. However except for shrimps and freshwater prawn. which contains provisions for all the environmental issues . In the year 2005-06 the total Indian fisheries export reached a record of 5.6 billion. 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.0. There is negligible government regulatory control over domestic marketing systems for aquaculture production. Brackish water shrimp is a prime aquaculture species produced in India. The governing regulations As per the Constitution of India. Several key laws and regulations implemented by the central government of India are as follows:  Indian Fisheries Act (1897). predominantly in frozen form. fisheries etc. Markets and trade The unit value performance of fish exports in India is only US$ 1. this is considered as an umbrella act. emerging as the second largest importer of Indian seafood exports with 57. after West Bengal. It markets the bulk of the production in the eastern and north-eastern parts of India through their established network. which includes. the postharvest processing of aquaculture produce is virtually non-existent in India. Thus.The highlight in the export trend for the year 2008-09 is the development and increase in exports to China.

It also necessitated the coastal states to form Coastal Zone Management Plans.  Water (Prevention and control of pollution) Act (1974). particularly to deal with the impact of shrimp aquaculture industry and to safeguard coastal areas. and CRZ-IV . The Supreme Court declared:  Mangroves. 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. the Supreme Court of India imposed an order. 2009) Policies In February 1991. which were to be accepted by the ministry. These plans were classified into four categories: CRZ-I. estuaries. bays. CRZ-III. which had a major impact on the aquaculture sector specifically in setting up the shrimp farms in coastal areas.  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. forest lands. CRZ-II. the Ministry of Environment and Forests issued a notification under the Environment (Protection) Act. seashore. excluding hatcheries was prohibited in the CRZ. agricultural lands. utilized for shrimp production (FAO. waterfront etc. Areas like the coastal stretches of seas. wet lands and common village purpose land will not be converted to shrimp ponds or for shrimp culture purpose. Wild Life Protection Act (1972) On 11 December 1996. Under the notification. 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. 1986. construction of fish processing units.

forestry.The CRZ Notification were issued to state governments.. issues and development This section concentrates on the current trend. This zone especially consist areas. various issues and development opportunities of Indian shrimp business in global market. Activities related to agriculture. which are free of houses and infrastructure. and forestry are allowed in the area up to 200 m from the high tide line (Government of India 1991b) Government subsidies Trends. up to the shoreline. In the area flanked by the low tide line and the high tide line. Trends . but none of them formed the Coastal zone management plans. and salt mining are allowed. CRZ-IV Areas: Coastal areas in the Andaman and Nicobar and other small islands except those selected in other categories. etc are permitted. Due to various appeals made to the Supreme Court for the implementation of the 1991 Notification. the only construction activities used for carrying treated water discharge into the sea. The area up to 200 m from the high tide line is declared as no-development zone. gas. construction of buildings is not permitted on the seaward side of existing roads or existing official structures. Coastal Regulation Zones CRZ Characteristics (Government of India 1991b) CRZ-I Areas : These Zones comprise of ecologically sensitive areas. In this zone no new construction is permitted landward of the high tide line. amenities used for carrying seawater for cooling purposes. Buildings can be constructed only from 200 to 500 m above the high tide line. This investigation will aid to capitalise on the giant potential of shrimp market in coming years. like mangroves and areas between the high tide line and the low tide line. e. salt mining. state government prepared the Coastal Zone Management Plans.g. CRZ-III Areas: These zones consist of relatively undisturbed areas. like rural areas. although activities pertaining to agriculture. In this zone. CRZ-II Areas: The areas under this zone are already developed. with housing or infrastructure facilities. oil.

Shrimp exports to USA from India were 41% in 2003-04. European union is forecasted to be the biggest emerging shrimp export market for India (FIS world news. access to institutional credit. Also the Japanese market for Indian shrimp exports has shown a negative trend of 27% in 2004 to 22% in 2007. to legalise shrimp aquaculture in Coastal regulation zone. Supreme Court of India imposed a ban on intensive. negative environmental impact. Packaging / branding / marketing quality of shrimps exports etc. it has declined to an alarming figure of 19%. whereas in 2007-08. 2008). infrastructure.There is a declining trend of shrimp exports from India to USA. One of the major reasons being the anti-dumping measures taken against production of shrimps in India since 2004. 2008) Culture management . However to capitalise on the emerging shrimp business market worldwide. 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. However there is also an Aquaculture authority bill in Indian parliament . and global criticism against Shrimp culture. improvement of forward & backward linkages and favourable legislations and policies (MANAGE. In 1996. This uncertainty and frustration has affected the expansion of shrimp aquaculture in India. wherein some oppose due to local disagreement.Lok Sabha. 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. Some states and communities are positive and supportive of shrimp culture practices due to economic growth and prosperity. 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. The export market in USA has weakened by almost 50%. semi-intensive and extensive shrimp aquaculture in Coastal regulation zone (CRZ). India needs to develop and focus on some key areas of opportunities such as: Develop a systematic distribution channels. Issues Shrimp aquaculture is and has been one of the most contentious issues in India.

which can ensure quality.  During the 1990s there was an oversupply of shrimp produced in the global market. Effective usage of technology is needed to reduce the cost.MANAGE. Indian farmers face a major problem as cost of production is increasing and there is decrease in the price. Therefore Better Management Practices (BMPs) should be used for sustainable shrimp farming. Finance and Infrastructure for shrimp culture  Easy availability of credit facilities is the need of the hour for farm management and improving existing facilities. Domestic market was unorganized and consisted of only a low count variety. which they get from the market.  The cost of feed used in the shrimp farming accounts for the 50 to 60 percent of the total cost of shrimp production. But there are huge opportunities for shrimp and other aquaculture products with greater penetration of organized retail in India. which is not sufficient. As most of the farmers belong to poorer segments of the society. A larger share is also given to the middlemen and thus reducing the profit margin further. 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. the access to credit facilities is not available to them. for increasing the domestic as well as export business there is a need to develop a brand identity. This led to a decrease in the price of the shrimp as the demand was less and supply was more. . Institutional has shownlittle interest in this sector. About 95 % of the shrimp produced in the country are exported. Density of stock. Therefore its necessary to use effective management practices to decrease the cost of production and increase the profit margin. . At the same time. management of water resources plays an important role in the output of the shrimp farming process.  Environmental issues have been a major concern in case of shrimp farming in India.

 There is a need to popularize micro finance with the cooperation of local banks. The interest structure is also highly complex which makes the borrower permanently indebted to the credit supplier. which has few advantages over institutional financing. 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 educate the farmers to produce greater proportions of Tiger shrimp and freshwater prawns which will be accepted by global markets. This is also called Buy. Whereas in India. The recovery is in the form of cash or kind i. The freshwater prawn Macrobrachium rosenbergii is the only commercially produced freshwater species in India.32 million tonnes (2004). China is also the highest exporter of aquaculture products in the global market. Non-institutional credit is available in the form of credit sale of inputs like feed. DIVERSIFICATION of species  China ranks first in the production of aquaculture products with a total production of 41. There is a need to analyze the organizational strength of the clusters in the coastal region before financing them. To prevent this. Insurancealso needs to be marketed in this sector. while India ranks second in the global aquaculture production with a total production of 2.e. The major reason for high production and export of aquaculture products by China is Diversification. farmers are increasingly using different chemicals. Penaeus monodon is the only commercially produced brackish water species. They are i) Easy availability of credit. ii) Least formalities needed. Chinese produce approximately 50 commercially important species in freshwater and 40 commercially important species in marine water. they purchase the shrimp produced by the farmers. which may affect the quality standards in other foreign markets like US and Europe.47 million tonnes (2004).  Due to the threat of diseases. The non-institutional players mainly dominate the finance sector.Back system. iii) Personal relations. etc by the input suppliers.

Therefore there is a need to maintain a balance between environment and growth in shrimp farming. Water bodies like coastlines get severely affected as the waste produced from shrimp farms and hatcheries. Currently even though. which have a size greater than 5 hacters. the technology for seed production of sea bass. Mathematical programming or Operations Research based simulation These techniques have their own limitations and the techniques of measurement need to be perfected. The treatment system should consist of three main components (a) settlement pond. But the most important reason and issue of concern is the lack of knowledge among the farmers about the potential market for these species. For example. The size and the design of each . Tools for measuring sustainability Sustainability means different to different stakeholders in the business. 2. Cost of feed increases when farmers try to diversify the products. Some of the techniques to measure sustainability are: 1. it is not being utilized due to lack of awareness. 3. Environmental issues The process of shrimp farming leads to the release of various farm effluents in the aquatic ecosystem. (b) biological treatment ponds and (c) chemical treatment ponds. The term sustainability in Indian shrimp industry includes economic sustainability. an Effluent treatment system is mandatory for farmers. The profit margins are not as high as in Tiger shrimp production. the technology has advanced in certain areas. As per Coastal regulatory authorities. mud crab and banana shrimp is available and well tested. The reasons for the low production are as follows: 1. but their production remains low. There have been minimal efforts from the regulatory authorities to encourage farming of these species. Nurseries for sea bass as well as mud crab are inadequate. Carrying Capacity Evaluation 3. social as well as environmental sustainability. Ecosystem Approach to Aquaculture (EAA) 2.

However. 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. Farmers from neighboring district of Guntur who participated in the field day. being one the hub of Indian fisheries. 3.component varies according to the characteristics of effluent produced in the farm.NACA. The distinct advantage in this state is.Globefish (2009)  Farmer's field day was arranged byThe National Centre for Sustainable Aquaculture (NaCSA) on 16th October 2008 at Chinnapuram. it is recommended that 10 % of the farm area should be utilized only for effluent treatment system. Out of this area. To improve the shrimp production. the laboratories of the Marine Products Export Development Authority of India (MPEDA) are authorized for analysis and certification of farmed shrimps. The cost of production was also less and it was achieved without any usage of chemicals 4. for the first time. In the southwestern shrimp farming belt. 15% for chemical process and 15 % for settlement Developments  On 1st April 2009. 70% should be used for biological process. Approximately 200 farmers witnessed this event from Krishna and neighboring Guntur District of Andhra Pradesh. Chinnapuram Society farmers were able to achieve successful crop. In last 14 years. the locally available dried fish trash is added in . 2. For this purpose. Unity amongst farmers and availability of good quality seed using contract hatchery are some of the key reasons for the success. were encouraged to use the method for summer crop in 2009 . This lead to many positive results which are as follows: 1. Krishna District to popularize the successful harvest of farmers of the society. there is no rice crop being intercropped with fish seed and the unproductive saline land has been transformed into brackish water ponds. the black tiger shrimps are being produced through an integrated process (hatchery/ feed mill/ grow out) to obtain antibiotic free shrimps . (2009)  The most dynamic development in the shrimp culture has taken place in Andhra Pradesh.

What is Competitive advantage 'Competitive Advantage' is an advantage over competitors. Also. I will discuss briefly what competitive advantage is. which a business gain by doing things differently and providing the products or services to customers with . 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. Businesses today face a lot of difficult choices. 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. Theoretical Framework Introduction How a nation / company or any organizations compete and what strategies they implement are questions every business mind wants to know. . services. Further.the feed assortments. its different sources and three key methods of assessment SWOT analysis. provide them a competitive advantage and methods of analyzing different sources of competitive advantage. to make the raw material out of animals and marine origin is becoming very difficult. I will investigate on business strategy and competitive advantage of shrimp aquaculture industry in India and its limitations. Porter's five-theory analysis and PEST (EL) analysis. 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. On the whole. answering their needs and an unforgettable experience which would earn them genuine loyalty.Wood et. 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. 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. seed production and processing units as well as production of equipments and aquaculture machineries.al (1992:6). Development in shrimp aquaculture also resulted in growth of several ancillary/ related activities such as feed production. Another recent development is the unavailability of raw materials like the dried trash.

. Barney (1991:99) "Creating sustained competitive advantage depends on the unique resources and capabilities that a business brings to competition in its environment". the special and unique benefits that no one else can give your customers. It means deliberately choosing a different set of activities to deliver a unique mix of value. M. This is the advantage that a business has over its competitors in the same marketplace. what they really want at the highest quality and affordable cost. low cost that in return generate profits. there are three basic types of competitive advantage namely. 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.Hamel. PEST (EL) analysis. perhaps far more. 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. Value chain Analysis. After the business has attained a competitive advantage. Ansoff's six factor. it's vital to sustain it in order to stay ahead of competition. from raw material to cultured shrimp. According to Michael hammer "More value added (MVA) means that you give the customer more. India has successfully managed to become one of the leading nations in shrimp aquaculture industry. India's Shrimp aquaculture . 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. Porter's fiveforce theory. E. SWOT analysis. . Differentiation is the core aspect of a business.G and Prahalad c. This is achieved by concentrating on improving the efficiency of the supply chain and by economies of scale. India must concentrate to provide the consumers. which requires a long-term strategy .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. cost leadership. than you ever have before".Porter. highly skilled R&D and stronger sales team to communicate the perceived strengths of the product to the consumers. (1980). This is where India is lagging behind and has a huge potential to explore.increased value.k (1989). differentiation and focus. Businesses that are successful in a differentiation strategy often have leading scientific research facilities. According to Porter (1998:15). According to Jay B. competitive strategy is about being different.

barriers of exit.e. . powers of customers to drive down the prices. switching options are simpler. It helps businesses to analyze the strength of their current competitive position and the strength of the position they are looking to move into. The new entrants can therefore easily dominate the market environment in terms of prices. SWOT and PEST (EL) analysis are key assessment tools for strategy building. They five forces are:  Threat of new entry: The easier it is for the business to enter the market. The buyers impose pressures on suppliers when there are less number of buyers in comparison. high investments and fixed costs.  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. margins etc.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.  Bargaining power of buyers: Similarly.  Bargaining power of suppliers: Power of suppliers to drive up the prices. market share and customer loyalty. This is when the competition is high i. Similarly. Supplier's bargaining power is likely to be high when there are few suppliers. similar strategies. the harder it is for existing industries. 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. I have assessed the competitive advantage of India's shrimp industry with the help of these tools. are high etc. substitutes available. and the switching options are expensive. 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. no substitutes for the particular input. price competition. The threat of new entries mostly depends on the barriers to entry which are: economies of scale. government regulations.

G. Weaknesses. The above investigation and literature review of shrimp industry in India forms the base in context of research approach. SWOT stands for Strengths. It consists of: .e. which are adopted for data collection and analysis.. Scholes K. Lumpkin.G. .M (2004) PEST (EL) analysis Another method of assessing the sources of competitive advantage is PEST (EL) analysis. . 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. It's a first stage of strategic planning in any organisation. There is no a single research method. It is an investigation of the external macro environment that can influence or affect the business. opportunities and threats are the external factors .SWOT Analysis It is a powerful tool for auditing an organisation and its environment. and Whittington K. Strengths and weakness describe internal factors of a company that are favourable or unfavourable in achieving business objectives whereas.Johnson G.T and Taylor. qualitative and quantitative methods (Guba and Lincoln.Dess. 1994: 105). (2004)       Political Factors Economics Factors Social Factors Technological Factors Environmental Factors Legal factors Research Methodology There are various research methods and strategies. Opportunities and Threats. Two methods that are appropriately used with research paradigm i.

 To instigate a new approach and model to improve the quality of cultured Indian shrimp.Types of Research There are different types of research conducted depending on the purpose of study.  To investigate the opportunity areas and develop management of aquaculture shrimp industry. exploratory and explanatory. after collecting the data and not during the . Later I have studies the competitive advantage of Indian shrimp industry to identify the real factors affecting the growth of business. 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. 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. To analyse the performance of aquaculture industry specifically shrimp aquaculture. My research is a mixed approach with exploratory and explanatory purpose. Research Purpose The principle objectives of my research are. 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. 2003). 2003). Research approach The two commonly used methods while conducting the research are quantitative and qualitative research methods.e. 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. The difference between the two methods is distinguished during the treatment of data i. Mainly the purpose of any research can be classified into three: descriptive.   To explore the current shrimp business environment in India.

It is more focused on testing numbers and statistical hypothesis particularly when there is large sample size (Saunders et al. (FAO. limiting shrimp catches.course of collecting it (Denscomb. 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. 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. the production of shrimp reaches the point where the total cost of producing equals total revenues. It is mainly used for exploratory research purpose for detail understanding of research (Saunders et al. It does not engage into numbers and statistical analysis. closed seasons etc. There is a need of management interventions and control on access shrimp fisheries i. 2003). 2003) Qualitative method is more of comprehension and knowledge based data. 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. 1998). Quantitative research method deals with numbers and quantities transforming the data collected into statistical analysis. 2003). 2003).e.easy access to enter the 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 . to prevent the economic overfishing in long term. As there are no barriers to enter the shrimp fisheries market. 2009) . Within the qualitative research method the two most important approaches are structured approach and grounded approach. 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. it interprets the collected data into words.

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. It's a perfect example of price is a function of demand and supply. We have built a strong core team of professionally qualified industry experts in processed foods and agriculture. Vegetables with a state of the art plant located strategically at Hubli. The Company has international JV with Jogrex NV. Jogrex NV BELGIUM is a producer of Frozen vegetables mainly Silver Skin Onion & Parisian carrots. COMPANY PROFILE Tropicool Foods Private Limited(TFPL) was established to produce IQF(Individually Quick Frozen) Fruits. the profit margins and prices of Indian shrimps has dropped significantly. 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. . Karnataka. And since the shrimp culture market has experienced the situation of over supplying shrimps products in early 1990's.

we bring out the very best from local farming operations which enables us to produce fresh from the fields. VISION OF THE COMPANY Company will be Adaptive. deliver on time and process in their prime. This is the state’s first project under the PPP model (Public Private Partnership) providing us credibility with the farming community. 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. The company is located strategically on the outskirts of Hubli. 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. and Southern India. 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 can produce and/or source products and product mixes tailormade to customer requirements. Here in the midst of growing area.The Company has also profitably partnered with KAPPEC (Karnataka State Agricultural Produce Processing and Export Corporation Limited). Karnataka. 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    .

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.  The prices they quote are in US Dollars or in EURO Dollars and they do not export the same in the domestic market.      They have the certification of FSCC.  The procedure they followed was through direct contact with the customers in the exporting countries. . and has been exporting mainly to European countries which was decided based upon the market potential of its products. The product they exports is not exactly same as domestic market.  They price differently for different market and the possible reason for price variations is demand of the products. Through Mumbai port they freight their products. They have separate production / operations set up for exports.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. They do get export incentives for exporting your products. ISO and FPO for the quality standards.  They decide on differentiating products for exports on basis of the requirement and the way the domestic market wants.  They do send products to foreign customer directly. They do advertise and promote their products through overseas exhibition. They use container services at your plant for loading export cargo.

. They participate and exhibit their products in overseas exhibitions for export promotion.