March 30, 2016

Thai Union Group acquires 40% of India's Avanti Frozen Foods

   

Seafood giant Thai Union Group Public Co. Ltd.  (TU) has acquired a 40% stake of Indian prawn and fish feed maker Avanti Feeds shrimp-processing unit Avanti Frozen Foods Private Ltd (AFFPL) for 1.25 billion Indian rupees (US$18.5 million).

TU said the acquisition should diversify its shrimp sourcing and add production capacity to meet growing demand for its products. "It should help compensate the current raw material shortfall in Thailand. India's shrimp farming sector has not been affected by serious disease outbreaks such as Early Mortality Syndrome (EMS). Despite recovery in 2015, Thai shrimp output is still less than half of the level seen before 2013", TU said in a press release posted on its website.

AFFPL was set up last year by its parent company Avanti Feeds Ltd as a shrimp-processing unit for the export and domestic markets. In November 2015, the company also acquired the existing shrimp processing operations of its parent. It is now in the process of building a new facility at Yerravaram in East Godavari District, about 80 kilometres from the existing shrimp processing plant at Gopalapuram in the state of Andra Pradesh, India. With the existing capacity of about 25 tonnes per day, the new facility will add another 50 tonnes.

AFFPL exports shrimp to the US, major European markets and Japan. It is targeting China as a potential market, as well as looking to fill the growing shrimp consumption in the domestic market.

"Avanti Feeds is our reliable long-term partner in India….The firm's strong management team has been consistently delivering great results in recent years, making us a very happy and proud investor of the company", said Thai Union president and CEO Thiraphong Chansiri.

For his part, Avanti Feeds Ltd Chairman and Managing Director A. Indra Kumar said, "This is another major milestone of Avanti Feeds….After feed, shrimp processing is another area that we want to strengthen our presence. With Thai Union's strong position in this space, I am truly excited about the prospect of this joint venture. India is becoming an important player in the global shrimp supply chain, and I hope that this venture will allow us to become a leading force in the shrimp industry".

Earlier this year, TU acquired a 51% stake in Rügen Fisch, Germany's shelf-stable seafood leader.

It also intended to acquire the US-based Bumble Bee Seafoods last year but called off the deal after the concerned US authorities ruled it would go against the antitrust law, or harm fair competition.