June 6, 2005

Taiwan's Uni-President makes its foray into India; aims to be among the top three aquafeed producers

Taiwan's Uni-President Enterprises Corp is making its foray into the aquafeed industry in India. The company has reportedly signed a strategic alliance agreement with Godrej, India's fourth largest aquafeed producer, with the near-term target of becoming one of the top three aquafeed producers in India. 

Although Uni-President has evaluated the Indian market for 10 years, it was hesitant in making a hasty entry due to the following factors:

• Although India is a densely populated country, only a mere 5 percent of its population has sufficient purchasing power
   
• Sales taxes can be reach a high of 36 percent
   
• Logistics issues

With an annual output of 180,000 tonnes, India's aquafeed industry is ranked fourth in Asia and has shown the potential for continual growth. 

In the initial phase, Uni-President and Godrej would team up to procure feed raw materials to lower costs.  Uni-President would then impart technological knowledge to Godrej and work to grow the combined market shares of both companies to reach 10 percent. Thereafter, a joint-venture company would be set up to increase their competitiveness in the aquafeed industry.  Their immediate goal is to overtake the current third largest aquafeed producer Waterbase, which owns 13 percent of the market share, to become the one of the top three aquafeed producers in India.

At present, the top three aquafeed producers in India are foreign companies.  Godrej, a local enterprise, has a market share of only 6 percent.  However, with the collaboration between Uni-President and Godrej, their market share is raised to 8 percent, narrowing the gap with that of Waterbase.