India’s Apex Frozen Foods in has installed a new shrimp processing plant in Andhra Pradesh, tripling its capacity in the state, according to the company’s second quarter earnings call.
Apex’s total capacity will now rise to 29,240 metric tons (MT), from 9,240 MT previously.
“Of the 20,000 metric tons [new] capacity, one line of 5,000 metric ton capacity is towards value-added or ready-to-eat products. This is the first time that we are processing cooked or ready-to-eat products in our business,” Apex Executive Director Subrahmanya Chowdary said during the call.
The capital expenditure incurred towards the new plant is to the tune of around INR 108 to INR 110 billion (USD 15.22 million to USD 15.55 million, EUR 13.66 million to EUR 13.95 million) which was largely funded by the IPO proceeds and balance through the internal accruals.
Apex is sending products from the new plant to non-U.S. and non-E.U. markets, and is awaiting some necessary regulatory approvals.
Chowdary said as production at the new facility stabilizes, the company has planned to discontinue production at a leased 6,000-MT plant, also in Andhra Pradesh.
Apex will explore new markets and have forayed into China since the beginning of this financial year.
“While E.U. sales continue to be dismal due to the market conditions in that specific market, we remain focused on exploring newer markets across geographies, especially with the operationalization of the new processing plant,” Chowdary said.
In the second quarter, almost 91.3 percent of Apex’s total sales were to the U.S., followed by about 7.3 percent to the E.U. and 1.4 percent to China.
The company sees improvement in demand from its key markets including the U.S due to the clearing of inventories and the beginning of the pre-holiday season. On the supply side, the situation has stabilized and initial harvest from the delayed first crop in Andhra Pradesh seems to be normalized, Chowdary added.
