Waterbase: News update

The Waterbase Limited, manufacturer of high quality shrimp feed, is setting up hatcheries in Nellore, Andhra Pradesh, at an investment of Rs.20 crore. It will be operational by the end of March 2017 wherease this is to be operational now but due to floods they postponed and are now planning to set up.

In the recent interview, Ramakanth V Akula, Chief Executive Officer, told to BusinessLine that the company’s decision to set up a hatchery follows the booming shrimp export industry in the country.

Of the total marine exports, shrimp accounts for over 60 per cent, generating revenue of $2.7 billion during FY15. This gives the seed industry a huge potential for growth.

Akula said, “India’s seed requirement is five billion. Without the presence of organised players, availability of quality seed has become an issue and this gives us an opportunity to grow.”

Capacity expansion
The company is planning to increase its hatchery capacity of 500 million to match the domestic requirement in the coming years. Merger with Pinnae Feeds Limited, a wholly-owned subsidiary of the Karam Chand Thapur Group that owns Waterbase, has leveraged Waterbase’s distribution network, and enabled it to expand to Odisha and West Bengal.

Akula said, “We had capacity constraints and hence couldn’t venture into new markets. This merger has increased Waterbase’s capacity to 1.10 lakh tonnes a year, from 35,000 tonnes.”

Feed is the major revenue generator for the Rs.300-crore Waterbase Limited. The industry accounts for about Rs.5,000 crore and the company has a market share of about 7 per cent. Though the industry is growing, Akula feels the US government’s decision to hike anti-dumping duty will affect Indian exporters. Waterbase recently resumed their export operation and exports to the US and Europe.

Akula said, “The industry is growing at CAGR of 25 per cent, but it dropped last year due to fall in farm gate prices. Farmers reduced the area of cultivation resulting in reduced output.”

Incessant rain and outbreak of diseases in FY2016 too played a role in shrimp exports dip. “But this year, we hope the exports to pick up again,” he added. 

Conclusion: 

The two events happened recently will bring the attention once again,

1. Promoters hiked their stake considerably 

2. Company conducted the investor meet

In terms of investors point of view both are very excellent things... so one need to have a look in this counter closely...

(Source:BL)