INDIAN TUNA EXPORT LTD 2010

Guru Nanak College

Import export Project

SUBJECT : - Import Export STD:- SY-BMS

SUBMITTED TO : - Prof. Rahul Shah

SUBMITTED BY : - SARABJEET 13 Akash 27

Gautam 08 Bharat 45

Girish 03 Avtar 35

INDIAN TUNA EXPORT LTD 2010

INDIAN TUNA EXPORT LTD. (ITE)

After graduating from college we six friends had decided to start export business of Tuna fishes to Japan. Fishing Tuna in india is still premature and is not taken as a serious business but in international market it is worth of billions of dollars. Our head office is in Mumbai and our plant is located in Vishakapatnam.

We have invested personally and bought 5 trawlers and have converted them to Longliners

These trawlers where converted to longliners with the help of Marine Products Export Development Authority (MPEDA)

INDIAN TUNA EXPORT LTD 2010

“Kochi, March 15 In a bid to bolster the tuna catch from the coastal and deep sea waters of the country, Syndicate Bank plans to join hands with the Marine Products Export Development Authority (MPEDA) to provide financial assistance to fishermen. MPEDA already extends assistance of Rs 7.5 lakh for converting vessels below 20 metres into tuna long liners and Rs 15 lakh for vessels over 20 metres.

One of the objectives of the scheme is to introduce more resource-specific deep sea fishing vessels to the Indian fleet. MPEDA would also strive to offer hassle-free bank loan facility to fishermen, better realisation and an assured buy-back package.

Mr George Joseph, Chairman and Managing Director of Syndicate Bank, has held discussions with Mr G. Mohan Kumar, MPEDA Chairman, regarding the extension of financial assistance to promote tuna long-lining. “

We have banked with Syndicate bank because it is providing us Loan amount for convertion of trawlers in longliners and also because it has a good tie-up with Marine Products Export Development Authority (MPEDA).

What is Tuna ?

INDIAN TUNA EXPORT LTD 2010

"Tuna" is the general name applied to the Teleostei, Percida, Scombina, and Scombridae species of fish. Mainly inhabiting the open sea, these fish are extremely agile and can cover long distances at high speeds. They also reside at the top of the food chain among other fish species. There are several types of tuna: bluefin tuna, southern bluefin tuna, bigeye tuna, yellowfin tuna, albacore, etc. Approximately 1.6 million tons of tuna are caught worldwide each year.”

We use the technique to fish known as LongLine fishing

What is Longline fishing ?

INDIAN TUNA EXPORT LTD 2010

Longline fishermen are succeeding in their efforts to feed the world through sustainable and environmentally-friendly harvests.

To catch this diverse and renewable harvest, fishermen use a wide variety of different fishing gear and methods.

One of these methods, called longline fishing, is an effective and environmentally friendly way to harvest seafood. It is used in oceans all over the world in small-scale fishing as well as in modern mechanized operations. Tuna longline fishing was predominantly developed in Japan.

Longline vessels set out a mainline supported by floats that may extend for miles beneath the surface of the ocean.

We catch Tuna fish near vishakapatnam and Andaman and Nicobar islands, these fish are found at the dept of

INDIAN TUNA EXPORT LTD 2010

100 meters beyond, once caught starts the tedious process of numbing of Tuna it is done by

1. Hitting the tine on a particular spot on the head that it paralizes and does not die

2. After hitting it on the face the next phase is to put and iron rod throw its spines to remove the liquidy substance. This liquid if not removed quickly could spoil meat of the Tuna which will not fetch any value.

3. They have to be imidiatly put in deep freezers on the ship and till the time they reach japan they have to be kept in a freezer.

There is great risk in Tuna business if the above procedure isn’t done quickly and efficiently there is a risk that the importer might not accept the fish, But on the other hand the profit makes the business worth every risk.

The per unit cost of capturing a whole Tuna is about Rs 400-600 and its selling price can be in thousand of dollars if exported within 3 days of capturing it.

REGISTRATION FORMALITIES

INDIAN TUNA EXPORT LTD 2010

We have opened a partnership firm to enter into export trade of Tune Fish by following the guidelines of foreign trade (Development & Regulation at 1992).

We have registered our self with the Directorate General of foreign Trade (DGFT). As registration of export business is compulsory with authorizes because it deals in foreign exchange and makes us eligible to enjoy the benefit and incentives provided by the Government of India.

A bank account has been opened in the name of our firm M/S Indian Tuna Export LTD in Syndicate Bank, where instructions can be given by partners of our company.

We have obtained Exporter Code No. provided by DGFT , this code number acts as our identification number in the world of Import/Export, every registered firm is given such unique code no.

We have registered our firm with the Income Tax

department and obtained Permanent Account Number (PAN).

Our firm was then registered with Value Added Tax authority and Sales Tax Authority.

We have also registered our firm with export

promotion council of India to promote our business worldwide.

INDIAN TUNA EXPORT LTD 2010

Our firm has also been registered with Export Credit & Guarantee Corporation (ECGC) to cover our risk of credit after the export has been made.

Our firm is also registered with Federation of Indian Chambers of Commerce and Industries (FICCI) as FICCI serves as the first port of call for Indian industry and the international business community.

 

Export Licensing

Tuna is a restricted product, it does not affect the Indian food chain if exported in large quantity but it affects natures balance. Indian government wants to make sure of sustainable development i.e. fishing in long term which includes a quota of fishing and also three conditions they are:-

I. No fishing during Tuna fishes mating season, this will allow an ever increasing population and will guarantee a continuity of the species.

II. Fishing should be halted if there is drop in population as/when conveyed by Marine preservation authority of India

III. Only the adult Tuna fish can be caught, others need to be released in the sea again

INDIAN TUNA EXPORT LTD 2010

Hence a special license needs to be procured from DGFT for fishing and exporting of Tuna fish. We have to obey by the tonnage restriction issued by The Association of Indian Fishery Industries prior to the commencement of the fishing season.

ORGANIZATION STRUCTURE (MANUFACTURE EXPORTER)

We are exporting Tuna fish . We are manufacturer exporters, we export processed fish caught directly to importers in Japan. For time being we are only focusing on the Japanese market but we wish to expand once gaining experience in the business

We have our plant at vishakapatnam, our headoffice is in Mumbai, and our target market is Japan as of now in (Tokyo).

Partners of Indian tuna Export Ltd are;-

Sarabjeet, Bharat, Girish, Gautam, Akash, And Avtar.

Bharat and Girish manage the processing plant at Vishakhapatnam

Gatam, Avtar, Sarabjit are situated at the Mumbai headoffice their job is to communicate and find customers

INDIAN TUNA EXPORT LTD 2010

Akash constantly travels to japan to meet new importers and show them our product samples

Why we have chosen to Export Tuna in Japan?

The reason we selected to export Tuna fish to Japan is given below

Japan is the market for the high-quality fresh tuna and the price fetched for such a variety can be $15-48 a kg.

Tsukiji fish market is the biggest wholesale fish and seafood market in the world and also one of the largest wholesale food markets of any kind. The market is located in Tsukiji in central Tokyo

INDIAN TUNA EXPORT LTD 2010

The market handles more than 400 different types of seafood from tiny sardines to 300kg tuna, from cheap seaweed to the most expensive caviar. Overall, more than 700,000 metric tons of seafood is handled every year at the three seafood markets in Tokyo, with a total value in excess of 600 billion yen (approximately 5.5 billion US dollars). Tsukiji alone handles over 2000 metric tons of seafood per day. The number of registered employees varies from 60,000 to 65,000, including wholesalers, accountants, auctioneers, company officials, and distributors.

INDIAN TUNA EXPORT LTD 2010

Tuna is among various categories of marine products being traded here. Most of tuna, both fresh and frozen, came from longline operations all over the world. Frozen tunas were landed at the Shimizu, Yaizu, or Misaki ports, while some of the fresh ones also came through the Narita airport, and being transported to Tsukiji.

This clearly shows the Japanese love for Tuna, They consume 40% of the Tuna caught all over the world.

Another reason and the most important reason is that banning of Blue inn Tuna, this species of Tuna was caught in colder waters of Pacific and Atlantic Ocean. But due to over-fishing this species has become en-dangered and European Union and

INDIAN TUNA EXPORT LTD 2010

America has banned fishing of this Tuna fish until their population regrows. This gives a good chance for Indian Yellow fin Tuna fish and gives it a boast as it is the second best tuna species after Blue fin.

Why Tuna from India?

India surprisingly has a large population of Tuna fish that have been untouched as Indians do not consume Tuna fish in their daily diet. Hence their population is thriving in the Indian Ocean where as in other places around the world their numbers have been dropping consistently.

According to Mr. George L. Skoutarides recently appointed as a consultant to tap this marine wealth by Marine Products Export Development Authority (MPEDA)

“The waters along the Andaman and Nicobar coast hold vast potential. In addition, the east coast and the southern tip of the Indian coast, especially the Nagercoil belt, where tuna fishing is now on, hold great promise. Studies have shown that the exclusive economic zone (EEZ) around the Andaman and Nicobar Islands is a major resource for a variety of tuna. Since freshness is what

INDIAN TUNA EXPORT LTD 2010

decides the price for tuna, the catch should be immediately airlifted to their markets.”

According to MPEDA

“From $35.68 million (Rs62 crore) in 2005-06, tuna exports almost doubled to $60 million last year”

Only 61 tuna catching vessels in India for a business worth over 20 billion dollars and is vastly untapped

Hence India has a large population of Tuna which has been untapped; tapping these resources can earn India billions of dollars.

INDIAN TUNA EXPORT LTD 2010

Attracting importer in using 4p’s of marketing

To attract Importers we have used have prepared marketing strategy

Product: We are selling Tuna’s. Well they are sold by more than 10 countries and 100 exporters then why buy from us?

Indian Tuna’s is a recent find; they are nearly untouched they have only been fished from past 4 years. Hence they are bigger and healthier due to less human intervention.

Price: Since there is no demand of Tuna in India, all the captured Tuna is available for export. This means they can be offered at lesser price since our only target market is Japan. We are selling Tuna at 40% lesser price than what is prevailing in international market. We have ready to accept payment in YEN and dollar; this will make us a favorite since our Japanese friends do not have to go throw trouble of foreign exchange.

Place: We have aimed to transport the fish as quickly as possible since the fish market is on the dock itself so there is no delay in fish reaching the Plate of a restaurant

INDIAN TUNA EXPORT LTD 2010

Promotion: To promote our product we have registered our self with Global Fish group who represent all the fish exporters in India around the world and also with FICCI which promote Indian industries all over the world including Japan.

We also plan to attend fish exhibition around the world and take sample of our Tuna fish along to show our customers the fine quality of our product and also explain to them why they would with doing business with us.

Launching Product in Japan

Since we only deal with importers we have to make them aware about our product, we have made them aware about a cheaper tuna which does not compromise on quality and taste.

We have kept seminars in the Japanese fish market and gave them free samples of our product and made them aware about the low price and our readiness to accept Yen instead of dollars. During the seminars we will try to find out interested customers and pamper them with discounts and lower rates compared to others, we will also give him the option of airlift of freshly captured tuna fish so that he can get more bids for his tuna’s.

INDIAN TUNA EXPORT LTD 2010

Payment Terms

We are exporting tuna fish to tuna fish to Japanese delegation .the Japanese delegation are our importer and is unknown. So to avoid the risk factor from trade, we prefer method of payment as letter of credit.

1)We had given our surety to importer regarding quality and quantity which is to exporters per the contract for which we had given u our local banks legal undertakings. L/C shall be Irrevocable, Confirmed, Straight and payment at Sight. We prefer a Green clause letter of credit as it offers us easy finance

INDIAN TUNA EXPORT LTD 2010

2)The promissory notes from importer should be in proper manner with an actual date of payment specified in order to avoid obligation in term of credit mention in the letter.

3)The shipment documents should be sent to importer before the goods dispatch from port or ship harbors per the MOU signed.

Price we quote

1 carten of tuna fish (100 kg carten) = 1kg tuna 35 $ 100Kg X 25 = 3500

Minimum order of 50 cartens are taken

Frieght cost (since it is a perishable item Freight has to be in a freezer ) = 4000$ for upto 20 tons

Insurance cost = 3000$

Importer Exporter Business Process

The export business process starts starts with an inquiry send by email or an official letter sent to our company, it can also start with floating of a global tender with specified requirements of the Importer.

We respond to the company with an Export quotation.

INDIAN TUNA EXPORT LTD 2010

When the export order is confirmed when the importer and our company signs a contract of sale, then the

INDIAN TUNA EXPORT LTD 2010

importer floats an irrevocable L/C addressing to Indian Tuna Export LTD.

The importer send the L/C to advising bank (which is our bank here in India) we then ask our bank for a confirmation of L/C which our bank gives to us.

Submission of Documents

Exporter (Mumbai)

Indian Tuna Exporter Ltd

Importer (Tokyo)

Japanese Tuna Importer

Syndicate Bank (Mumbai)

Exporter’s Bank

Bank of Japan (Tokyo)

Importers Bank

Contract of sale

Requests to open L/C

Opens L/C & sends to Exporter bank

Forwards L/C to exporter & confirms the L/C

INDIAN TUNA EXPORT LTD 2010

On recieveing the payment if needed we opt for pre-shippment finance, once the Product has been processed and ready to ship (by air or sea) we make arrangements of nessary documentation for customs and for submission to our bank so that release of payment can be made once the goods reach the importer.

Indian Tuna Exporter LtdIndian Tuna Exporter Ltd

Bank of JapanIssuing bank

Bank of JapanIssuing bank

Syndicate Bank(exporters Bank)Syndicate Bank(exporters Bank)

Importer(Japan, Tokyo)

Importer(Japan, Tokyo)

Presents Documents

Ships Goods

Collects consignment n instructs bank for releasing payment

Reimbursement of payment

Collects Payments

INDIAN TUNA EXPORT LTD 2010

Conclusion

It is risky business to export but with the support from Indian government and the high profit margin it is surely the quickest way to be a successful businessman.

High quality Tuna fish also existed in india, but as our Prof. Rahul Shah once said “india has many matirels to export to the world but we should know how to sell them”

The profits in such business are tremendous, once we start tapping our resources the road will be a lot easier

INDIAN TUNA EXPORT LTD 2010

Recommendation

At the end we would like to put forward some recommendation i.e there are many products/ resources available in India that have very high value in the world market. Indian government should recognize these resources and promote exporting of these resources to have a good Balance of payment.