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

It is restricted to: 1. 2. it came to 47 years.. . It had considered fish and shrimp farming to be its options. The state of Andhra Pradesh on its own contributes 47 percent of the area and provides 50 percent of the total production. mainly. Bheries. has reached the industry state. hatcheries and feed mills have proven to be the pioneers of improving opportunities. Carp.e. and Cirrhinus mrigala are those three significant carps.Subhasinge and Currie (2005). Labeo Rohita. pearl . It is now due to some issues that scientific and business-related culture at present is confined to shrimp farming only. there are other species like shellfish and finfish. About 300 000 employment opportunities have been generated due to the shrimp aquaculture. Considering the brackish water aquaculture. is the hugely significant species farmed for the freshwater aquaculture. In India. Brackish water culture has also been substantially used in the area of aqua farming. Pokkali. salt resistant deepwater paddy. No doubt.spots and milkfish have depicted the latent for farming. which holds a very low key for the Indian Aqua culture.. Even Andhra Pradesh has shown a positive movement in the percentage of earnings for the shrimp farmers. . Catla Catla. human created impoundments in coastal wetlands. Indian aquaculture. The highest contribution to the total aquaculture production is because of the three Indian Carps. As far as the brackish water sector is concerned. i. finfish. Whereas.e. i.Subhasinge and Currie (2005).fisheries development keeping in mind its significance to the whole sector. On the other hand. The commencement of All India Coordinated Research Project (AICRP) was a great breakthrough towards the brackish water aquaculture. . There are certain things that Indian system also lacks. As Bhatta (2003) did the research regarding the average age of Indian aquaculture farmers. based on the production and awareness of its importance. is almost not available in Indian farming. . some experiments on mono and poly culture of mullets whiting. One of the crucial productions of brackish water. it is highly supported by shrimp production and the giant tiger prawn. shrimp holds the similar position in the brackish water sector. a database of all the human resources associated with the shrimp and fish farming. The expansion of shrimp farming has surely created opportunities in the coastal areas.Subhasinge and Currie (2005).

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

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

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

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

All cultured and majorly captured shrimps across the globe belong to Penaeidae family of decapod crustaceans and are termed as "Penaeids".5 million hectares. the giant tiger shrimp 'Penaeus monodon' and western white shrimp 'Penaeus vannamei' accounted for almost 85% of global shrimps production. its very crucial for any sector to create employment. The installed production capacity for the same is 11 billion post larvae (PL). The average production for the sector is about 100 000 metric tonnes of shrimp per year. 2009).disease called the white spot disease (WSD). Apart from raising the standard of the country at the international level.3 million people. Andhra Pradesh. constitutes almost the total crop produced. In a country like India. which had created havoc and had de-motivated the shrimp farmers. There is also lack of diversity in coastal aquaculture in India. However. penaeus monodon. By the year 2006. Cultured species There are hundreds of different species inhabit the marine and brackish waters of the world. These species are named as Panaeus. which is also known as tiger shrimp. which have come with the output of about 7 billion PL. shrimp farming has also created ample employment opportunities. There are also about 200 hatcheries in production. The different shrimp species cultured globally are:   Giant Tiger shrimp (Penaeus monodon) Western White shrimp (Penaeus vannamei) . the area of about 157 000 ha is used for shrimp farming which is approximately 10% of the potential coastline. (shrimp news. The concerned people have also generally accepted it now that the efficient management activities could make shrimp farming easily sustainable.e. There is roughly around 280 shrimp hatcheries spread all over the country. 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. A single species. shrimp farming has offered employment to about 0. 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.

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

Thus extensive production system management is more profitable in India.  Extensive systems: In this method. labour cost being 15%. lowest compared to many other nations. Feed consists of a combination of local feeds and locally produced or imported pellet feeds.. These ponds are filled with tidal water without any control over quality. inputs i. & Engle C. and fertilization and contain higher density stock. and they contain supply and drainage canals which control flow of water. 247)  Traditional aquaculture method: In this type of method.  Intensive systems: The ponds are 0. 2006. Density of stock ranges from 15-30/m2. p. Overall production increases from 300 to 600 kg/ha/year. The ponds are stocked at rates of 2-5/m2.  Semi-intensive systems: The ponds are 0. with one or at the most two crops a year. which is very high compared to other nations. However in extensive production system. 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. liming.  Modified extensive systems: The ponds used in this system are prepared with tilling. average production is low and ranges from 200 to 500 kg/ha/year of mixed species. Average production of semi-intensive farms in India is about 2200 kg/ha/year (ADB/NACA 1998). cost of feed constitutes major component to per unit cost of shrimp produced.50 ha in size. one or two crops in the range of 600 to 1100 kg/ha can be produced .0 ha in size.25-0. square shaped ponds with excavated walls are used. Followed by seed cost that accounts to 35% of total production cost in India. which produces shrimps at US$ 1.25 to 1. (Leung P.  Improved traditional systems: In this method. ponds consisting of a large proportion of various fishes and a small proportion of shrimps are used. In this method. Chemicals are also used along with imported pellet. in the range of 5to 10/m2. respectively. irregular pond depths. In addition.07 cost per kilogram. Water is supplied to these ponds through canals. with four aerators per pond and a centralized drainage system to remove sludge and manage water .In intensive and semi intensive production systems. and complete dependence on food naturally available in the ponds. India is one of the lowest productions cost country.e.

Many other parameters. Viet Nam and Thailand.FAO (2009).079 crores in export sales that is equivalent to 0. This system is common in Thailand and Taiwan. October 2006). (allbusiness . generating foreign reserves of about Rs.2009). the United States of America and Japan. The major exporting countries in terms of value are China.803 tonnes with an estimated value of Rs 1. Business and Sales of shrimps in India Shrimp is and continues to be the largest single commodity in terms of value. whereas due to fall in demand the prices of cultured shrimp showed downward trend. like salinity control.6 crops per year (ADB/NACA 1998).com. However. Coastal aquaculture shrimp production also showed negative trend at 75. the EU strengthens its position being the leading shrimp market in the world. Shrimp production At present there are approximately two lakh farmers engaged in shrimp aquaculture. During the year 2008-09 the aquaculture production was declined to 88. With the exception of United Kingdom. 4.997 tonnes from the utilized culture area of 1. all the major European countries exhibit a stable or increasing trend for shrimp imports.8 billion US dollars. with 1. The average production in India is about 4500 kg/ha/year.flow in the pond. Many cultured shrimp producers are now looking for value addition strategies and diversifications with margins and prices under pressure. in India it is not frequently used (James 1999).e. are same as for semi-intensive systems. . India contributes approximately 6% of global aquaculture production (Hindu Business Line .54 lakh hectare area. about In 2006.9 per cent in production area.08 lakh hectares. compared to previous year.170 metric tonnes of shrimps have been produced from a 1. 2006). Prices for wild shrimp went up in beginning of the year 2008. Shrimp imports were weak in the year 2007 in major shrimp importing countries i.915 crore. The decline was around 28 % in quantity produced and 10. Density of stock is 30 to 80/m2. (all business. and accounts for nearly 17 percent of the total internationally traded fishery products . its market share and average price demonstrates negative trend. Despite of increase in export volumes.

and few other countries have shown evident decrease in Shrimp demand. 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. US. the household consumption of Shrimp in European market has increased by 0. due to recession. The French consumers have maintained their eating out lifestyle. which has not affected all countries equally. By the end of 2008. Italy.Decline in demand for shrimps Shrimp imports grew to some extent in US. 2008) However. The best solution to improve and sustain the shrimp business is through the process of diversification and exploring regional and domestic markets. (Antony M et al.02 lakh tonnes. The purchase of shrimp is more like to get affected. 2009 Contribution to the Indian economy Shrimps being the principal export item and one of the largest export industries in India.607. however. However the export-earning share of EU has dropped in dollar terms revenue to 32. due to which the shrimp demand has remained constant because Shrimp is highly consumed in restaurants. 2009). Shrimp exports account for more than 70% (in terms of total earnings) of marine products. . resulting in the downward movement of the Shrimp price tag.7 % respectively (Hindu business line. $1. Globefish. 2009).e. However. Uk. Shrimps contribute more than 52% of the total seafood exports (quantity) in which EU accounts for more than 37% of the total shrimp exports. 14% and 13% respectively. being high priced commodity. due to festive period. 2002).63 million in US Dollars (Hindu business line.908. Since very long time.94 crore i. the demand for Shrimp has declined noticeable. Currently demand is still low in all three major shrimp markets. China and US with 16%. but a decline was seen in the imports of shrimp in European countries and Japan. One of the key reasons for the decline in demand is the current global economic recession. there is increase in sale of Shrimp expected. but European consumer is now becoming more calculative about the average money spent on daily basic commodities. by the end of the year 2009.1%. European markets had been lucrative for shrimp exports. The total of marine exports in financial year 200809 was 6. Spain. which accounts for record earnings of Rs 8. (EUROSTAT.

which contains provisions for all the environmental issues . water. which was valued over US$ 0. Compared to any other finfish produced by aqua culture. the price of the produce is easily influenced by supply and demand.e. after West Bengal. Thus. emerging as the second largest importer of Indian seafood exports with 57. the state legislatures has the power to make regulations on various matters and issues. one of the century old regulation that penalizes for killing of fish through i.19 per kilogram compared to US of US$ 2. It markets the bulk of the production in the eastern and north-eastern parts of India through their established network. Several key laws and regulations implemented by the central government of India are as follows:  Indian Fisheries Act (1897). shrimps are mainly exported while others are mainly consumed in domestic market. In the year 2005-06 the total Indian fisheries export reached a record of 5.12 million metric tonnes valued at US$ 1. 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. Markets and trade The unit value performance of fish exports in India is only US$ 1. In 2008-2009. poisoning of water  Environment Protection Act (1986). There is negligible government regulatory control over domestic marketing systems for aquaculture production. There are many laws relevant to shrimp aquaculture that are adopted at state level and at central level. Brackish water shrimp is a prime aquaculture species produced in India.0. The governing regulations As per the Constitution of India. 2009) With respect to India's poor performance of unit value of exports and lack of value added products.80 billion (FAO. this is considered as an umbrella act.61 million. Andhra Pradesh is the second largest producer. land. around 66% of total exports were contributed from cultured shrimp and prawns. In addition there is no certification system available for the sale of produce. the postharvest processing of aquaculture produce is virtually non-existent in India.6 billion. which includes.271 tonnes at $278. fisheries etc. predominantly in frozen form. However except for shrimps and freshwater prawn.The highlight in the export trend for the year 2008-09 is the development and increase in exports to China.

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

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

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

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

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

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

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

I will investigate on business strategy and competitive advantage of shrimp aquaculture industry in India and its limitations. which a business gain by doing things differently and providing the products or services to customers with . Another recent development is the unavailability of raw materials like the dried trash. What is Competitive advantage 'Competitive Advantage' is an advantage over (1992:6). Other type of meats are also scarce because if we consider beef skin that mostly depends on the leather demand. to make the raw material out of animals and marine origin is becoming very difficult. seed production and processing units as well as production of equipments and aquaculture machineries. provide them a competitive advantage and methods of analyzing different sources of competitive advantage. Theoretical Framework Introduction How a nation / company or any organizations compete and what strategies they implement are questions every business mind wants to know. . I will discuss briefly what competitive advantage is. Also. It takes a lot of time and additionally three man-hours are required for the collection of fish and beef for the feed. Development in shrimp aquaculture also resulted in growth of several ancillary/ related activities such as feed production.Wood et. Further. services. Porter's five-theory analysis and PEST (EL) analysis. its different sources and three key methods of assessment SWOT analysis.the feed assortments. Businesses today face a lot of difficult choices. 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. The bad weather also adds to all the existing difficulties of shortage of raw material. The primary concern is the feed preparation. 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. On the whole. answering their needs and an unforgettable experience which would earn them genuine loyalty.

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

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

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

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

2009) . 1998).easy access to enter the shrimp industry. One of the fundamental problems of Indian shrimp industry is open and easy access . There is a need of management interventions and control on access shrimp fisheries i. Quantitative research method deals with numbers and quantities transforming the data collected into statistical analysis.e. 2003) Qualitative method is more of comprehension and knowledge based data. its current position in global market and its competitive advantage. the production of shrimp reaches the point where the total cost of producing equals total revenues. limiting shrimp catches. 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. As there are no barriers to enter the shrimp fisheries market. (FAO. 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.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. 2003). It does not engage into numbers and statistical analysis. 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. It is mainly used for exploratory research purpose for detail understanding of research (Saunders et al. 2003). closed seasons etc. 2003). it interprets the collected data into words. It is more focused on testing numbers and statistical hypothesis particularly when there is large sample size (Saunders et al. to prevent the economic overfishing in long term.

COMPANY PROFILE Tropicool Foods Private Limited(TFPL) was established to produce IQF(Individually Quick Frozen) Fruits. And since the shrimp culture market has experienced the situation of over supplying shrimps products in early 1990's. . It's a perfect example of price is a function of demand and supply. Around 95% of the total cultured and captured shrimp are exported in global market. The Company has international JV with Jogrex NV. Vegetables with a state of the art plant located strategically at Hubli. 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.There is considerable market penetration for Indian shrimp in abroad than at home. the profit margins and prices of Indian shrimps has dropped significantly. Karnataka. Jogrex NV BELGIUM is a producer of Frozen vegetables mainly Silver Skin Onion & Parisian carrots. We have built a strong core team of professionally qualified industry experts in processed foods and agriculture.

VISION OF THE COMPANY Company will be Adaptive. deliver on time and process in their prime. 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. Food is an integral part of our social and cultural life quality and hygiene are critical factors when we choose any food product. 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    . Karnataka. The company is located strategically on the outskirts of Hubli. Here in the midst of growing area.The Company has also profitably partnered with KAPPEC (Karnataka State Agricultural Produce Processing and Export Corporation Limited). 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. we bring out the very best from local farming operations which enables us to produce fresh from the fields. 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 tailormade to customer requirements. This is the state’s first project under the PPP model (Public Private Partnership) providing us credibility with the farming community. and Southern India.

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

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

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