The Hindu : Business : HLL plans alternative business model to tap export markets

Online edition of India's National Newspaper
Thursday, Nov 10, 2005

Business

Business

HLL plans alternative business model to tap export markets

Special Correspondent

Focus on ready-to-cook seafood markets

KOCHI: Faced with potential drop in U.S. exports in the wake of slapping of anti-dumping duties on shrimps and insistence on furnishing of Customs bond of $5 million by importers, consumer products major Hindustan Lever Limited is looking at alternative business models to maintain its hold in the export markets.

In the marine products export front, the HLL is looking at the ready-to-cook-and-serve seafood sector, especially in the European Union and other export markets like Japan.

Talking to reporters, Shivram Warrior, vice-president (marine exports) division of HLL, said the company continued to be the largest exporter of marine products from the country and leader in the value-added marine products exports, for which the Marine Products Export Development Authority (MPEDA) had honoured the company for the past four years. The turnover of the marine division was over $60 million, from the eight plants located along the coast. Of the Rs.250-crore turnover, the value-added segment alone accounted for nearly Rs.180 crores, he said.

He said the `surumi' plant was equipped to convert raw fish into crab sticks within two hours, all under one roof. Surumi processing is done at Veravel, Mumbai, Udipi and in Kochi.

A number of new players are entering surumi exports, which used to fetch very low prices a decade back (in the range of Rs. 1-2 a kg) and used to be exported for use as fishmeal. However, with the Japanese markets going in for surumi, the price realisation has improved now and the price is 10-fold of that a decade back, he noted.

There is a basket of value-added products, which goes under the general name of surumi analogues, including flakes, sticks, chunks etc.

Hard times

Answering a question, he said the seafood exports sector was passing through hard times for the past couple of years and the very existence of the sector had come under a cloud owing to restrictions imposed by the importing countries, especially the U.S.. First came the ban by the European Union, followed by the strict implementation of the phytosanitary norms by the West, and presence of antibiotics, and hardening of the stand by importers to comply with FDA norms.

Europe continued to be the biggest export destination accounting for 33 per cent of the exports by HLL, followed by US (25 per cent) and the South East Asian countries. Hence, the decision to develop categories in exports and to tap the ready-to-cook, barbecue and serve products, Mr. Shivram said.

Breaded and battered , marinated shrimps, seafood mix (comprising mussels, clams, cuttlefish ) are some of the categories to be exported on an intensive manner, he said. Shrimps do not attract anti-dumping duty if its presence is less than 20 per cent in the value-added category, he replied in response to a query. Value addition is taking place in a number of ways and the HLL hopes to successfully market crab meated shells, crab cakes (battered and breaded), imitation crab cakes made of surumi , all under the main four brand names like Gold Seal, Prima, Ocean Excellence and Ocean Diamond.

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