FALCON MARINE EXPORTS

By: • Arijit (U309011)• Lokesh (U309025)• Niharika (U309030)• Rakesh (U309041)• Suraj (U309057)

• Orissa, because of its coastline and rivers, features among the top ten states in terms of fish production.

• At present Orissa is having 23 exporters who are processing in 19 nos. of modern processing plants spreading throughout the coastal districts of Orissa.

• Out of 19 processing plants, 5 are European approved standard and few of them are highly International standard to meet the requirement of the International market.

• The total contribution of sea food production of Orissa in the basket of India sea food export is 8% in terms of quantity and 5% in terms of value.

• The sector, which employs more than 1 lakh people in the state, reported a record exports figure of Rs 411 crore during the last fiscal.

SEAFOOD INDUSTRY OF ORISSA

Contd..• Major species available for growth are shrimps, prawns, pomfret, seer fish,

etc.

• Frozen shrimps and frozen scampi contributes to around 95% of the total value of exports.

• The major export destinations are Europe, Japan, USA, EU and Middle East.

• Recently, there has been an increase in the export of fishes and fish- related products both to out- state markets (Kolkata, Mumbai) and abroad, by near about 30%.

• Falcon Marine was set up in 1982 by Mr. Tara Ranjan Patnaik and Mr. Prava Ranjan Patnaik both stalwarts in this field with three decades of experience.

• Since Inception in 1982 Falcon Group has grown to conglomerate consisting of Seafood's, Stell, Finance, Real Estate, Drinks, Moters, Movies and Educational Institutes.

• At Falcons, sea food is processed in their state of the art processing plants at Orissa and West Bengal. Their manufacturing processes adhere to HACCP, BRC, ISO standards.

• The facilities are extensive consists of Plate Freezers, Blast freezers , Cooking Lines, Flake Ice Makers, IQF Lines Cold Storages.

• The brands that Falcon is dealing with are Tarax, Royal Gold, Aquagem, Sea Gold, Nice, Typee, Royal Tiger & Royal Scampi.

ABOUT FALCON MARINE EXPORTS

Blanched pink Blanched pud

Butterfly cut Cooked HLSO

Cooked PD Cooked PDTO

Cooked tail on Cooked white

Cooked white pud Head on

HLSO Black Tiger PD Block

PD TQF PDTO Black tiger

PDTO IQF Pink

PTO IQF Raw PD

Salad shrimp Skewer

White

PRODUCT PORTFOLIO: SHRIMPS

Black Tiger Shrimp

The value of the raw material stands at 70-75% of the final product

Raw materialRaw material

Raw materialRaw material

• The quality of the raw materials are adjudged on the following parameters

Variety

Condition

Grade

Visual

Physical

Odour

Temperature

Packing

Micro Biological Parameter

Antibiotic Pesticide Residue

Sulphite Residue

The raw material of the company gets supplied in trucks full of ice. The company has its own transport fleet. It hires the services of transporters if the there is an abundant supply of raw materials and its own fleet is unable to meet the requirements

LogisticsLogistics

The company has a fleet of trucks of capacity 5 and 10 tonnes. The cost of transportation comes to around Rs 3/quintal/km according to company officials.

Area of ProcurementArea of Procurement

FALCONFALCON

Area of ProcurementArea of Procurement

Common Supply Chain for Shrimp Common Supply Chain for Shrimp ExportExport

Marine CaptureMarine CaptureAquaculture Aquaculture ProductionProduction

Fish ProcessorsFish Processors

Landing Landing Site/AuctionSite/Auction Independent/Common Independent/Common

processing Unitprocessing Unit

Overseas Importers & ExportersOverseas Importers & Exporters

AgentAgent

Main StakeholdersMain Stakeholders

Main StakeholdersMain StakeholdersPROCESS FLOW OFPROCESS FLOW OF

BLOCK FROZEN SHRIMPSBLOCK FROZEN SHRIMPS

PROCESS FLOW OFPROCESS FLOW OF

Cooked IQF Shrimps

PROCESS FLOW OFPROCESS FLOW OF

Cooked IQF Shrimps

STORAGESTORAGE

PACKING

PROCESSING

PREPROCESSING

PROCESS FLOW OFPROCESS FLOW OF

RAW MATERIAL TO FINISHED PRODUCTRAW MATERIAL TO FINISHED PRODUCT

EXPORTEXPORT

• Adulteration issues– Bacteria– Filth– Histamine– Listeria– Poison– Salmonella– Unsafe additives– Veterinary drug residues

• Non-adulteration issues– Certification and quality assurances

Risks Involved in ExportRisks Involved in Export

SWOTSWOT

OBSERVATIONS…SWOT ANALYSIS

1. Commercial sea port at Paradip.

2. Strong force of fish cultivators.

3. Great stretch of 480 kms of coastline.

  

1. Exposure to foreign markets would act as a threat to their independent pricing policy.

2. Tighter access to funding in capital markets.

3. Global imports of shrimps are declining and demand for processed food is increasing.

4. Imposition of strict quality control standards by Japan and US, the major market of Indian marine exports.

1. Increase in demand for protein food.

2. Dedicated technical workforce

3. The biggest brackish water lagoon of Asia – Chilka provides vast scope for fish production with suitable areas for sea weed culture.

4. Better Equipped

1. Changing consumer behavior, looking for more economical options.

2. Increase in the cost of energy, transport, finance, ingredients, etc.

3. Changes in the currency rates may reduce the profitability in exports.

4. Single product(shrimps) and single market (US and Japan) oriented industry.

  

Financial Results….

2008—09 (in lakhs) 2007-08 (in lakhs)

Export sales 21141.68 20647.03

Other Income (Export incentives, etc.) 2692.55 1631.03

Profit before interest and depreciation 1307.25 1333.91

Interest 310.81 299.96

Cash surplus (3-4) 996.44 1033.95

Depreciation 246.30 309.83

Net profit before tax 750.14 724.11

Provision for taxation 289.15 239.46

Deferred tax liability written back 8.78 13.38

Profit available for appropriation 5267.95 4881.26

Dividend declared for the year 2008-09 was 10%, due to an impressive turnover of Rs 211.42 Cores.

• Entering into direct contract with the shrimp cultivators would not be advisable as it would increase the cost of operations. The agents should act as an interface between the exporters and the shrimp cultivators.

• In view of the fluctuating prices, the company should form associations (company, farmers and agents), to agree upon the prices to stay competitive and create a win- win situation for all the stakeholders.

• The above pricing strategy might help the company to achieve bulk and steady procurement from the farmers.

• Agents should be hired by the company on a permanent basis, to provide training and raw materials to the farmers on the one hand, and procure the cultivated shrimps on the other from them, and behalf of the company.

RECOMMENDATIONS

CONCLUSION• There are good prospects for exploiting domestic market,

targeting high income group so that producers get a sizeable share in consumer rupee.

• Shrimp processing is still at low level in our country. There is a need to create more processing units at major producing states such as Maharashtra, West Bengal and Orissa.

• In recent years, food safety has assumed greater importance among the consumers, resulting in development of various restrictions on food trade. Our processing industries should be proactive in ensuring the required quality expected by importing countries.

• The marine growth story“ Seafood exports grew by about 22 per cent to $ 170 million (Rs

790.55 crore) in July compared to the same month last fiscal, thanks to increasing demand from markets like Japan and the US”.The Economic Times, 6th September, 2010.

Thank YouThank You

Thank Thank YouYou

Thank Thank YouYou

Thank YouThank You