Financial Daily from THE HINDU group of publications
Thursday, Nov 10, 2005
Agri-Biz & Commodities
Marketing - Strategy
HLL charts new products, markets for marine biz
HLL's cooked seafood products on display in Kochi on Wednesday. K.K. Mustafah
Kochi , Nov. 9
CONFRONTING formidable barriers in anti-dumping duties and execution of custom bonds before shrimp exports to the US, Hindustan Lever Ltd is introducing new product lines and entering new markets for its seafood export business.
The company is now looking at value-added products such as breaded shrimp, marinated shrimp and surimi analogous products such as imitation crab-sticks to strengthen its position in the international markets.
"In fact, value-added products like breaded and battered shrimp as well as specific varieties of `seafood cocktail' which have shrimp as an ingredient, do not come under the purview of the US anti-dumping duties," Mr Shivram Warrior, Vice-President, Marine Exports of HLL, said.
HLL, which operates eight seafood processing plants, is the single largest marine exporter from the country with an annual turnover of Rs 250 crore.
Of this, Rs 170 crore is in the value-added form.
Like every other exporter, HLL was also battered by the anti-dumping duty imposed on Indian shrimp exports to the US as well as the need to execute customs bonds.
"The value of the bonds in some instances and for some companies have gone up from $900,000 to $5 million and the path ahead seems formidable. We believe value addition and diversification is the way forward," Mr Warrior said.
In a bid to overcome the anti-dumping duties enforced on shrimp exports to the US, the company has already obtained its `importer on record' status in the US market. In addition, HLL has also introduced its value-added products for the US markets in retail packets with US bar codes targeted at the US super markets.
The products, which are sold under the brand names of Gold Seal, Ocean Excellence, Ocean Diamond, Shogun and Prima are not only sold in the US market, but also in several EU countries, Japan, South-East Asia, Australia and South Africa.
HLL factories have been undertaking re-engineering and re-processing exercises to upgrade and add further value to its products.
Targeting the Japanese market, the company had started its first surimi processing plant in Gujarat in 1995. From 2,110 tonnes of Indian surimi exports to Japan in 2000, the figure has shot up to 21,353 tonnes in 2005.
HLL today has 4 surimi factories, while there are 14 across the country.
The surimi market, Mr Warrior said, was huge. And India was emerging as a prominent player after Thailand.
The company got into the manufacturing and marketing of imitation crab-sticks just three years ago, but is already finding favour in the European and US markets.
HLL has traditionally played the role of category creator, which has been emulated by others as in the case of surimi.
The company said though value-added products still constituted around 20 per cent of Indian marine exports, it has been growing stridently at 55 per cent per year.
With the industry confronting both tariff and non-tariff barriers in the European and US markets, the way forward is through value addition and diversification, Mr Warrior said.
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