Thai Union Acquires Stake in Shrimp Feed Manufacturer


Linda Salim, for SeafoodSource from Surabaya, Indonesia

Published on
October 7, 2008

Thai Union Frozen Products (TUF) purchased a 14.99 percent share in Avanti Feed, India's second largest shrimp feed producer, in a $1.16 million transaction. TUF took ownership of 1.19 million shares for 83 cents per share from the Bombay Stock Exchange-listed company.

Avanti Feed's activities include shrimp feed manufacturing and black tiger shrimp processing, mostly for export.

The move is a strategy to boost TUF's market base. The Indian government, which had restricted shrimp farms to breed P. monodon exclusively in the past, has opened production up to P. vannamei. According to Thiraphong Chansiri, TUF president, production typically goes up as shrimpers in a country begin breeding vannamei.

A TUF acquisition of Avanti is regarded as an obvious next step, after a long-term relationship between Thai Union Feedmill, a TUF subsidiary, and Avanti Feed, in which Thai Union Feedmill provides technical support in shrimp feed production.

Thai Union Feedmill produces and distributes shrimp feed in Thailand.

Through an Avanti buyout, TUF expects growth in frozen and canned seafood sales in India's growing market. Thiraphong stated that India is a vast market and a sizeable seafood consumer.

Shrimp feed is a significant profit maker for TUF. In the first half of 2008, Thai Union Feedmill's net earning was up 120 percent from the same period last year.

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