ACI swims against the tide, enters shrimp export market
ACI Agrolink, a subsidiary of Advanced Chemical Industries (ACI), has set foot in shrimp processing to produce a breakthrough in the global seafood market and take the sector out of troubled waters.
Bangladesh's shrimp exports have been on the wane since fiscal 2013-14 when confronted with increased competition from countries such as India, Vietnam and Thailand, where low-priced vannamei shrimp are grown.
The factory, which was set up at a price of Tk 25 crore, sits in the shrimp farming village Amian in Kaliganj upazila of Satkhira, among the primary shrimp growing districts.
This is as opposed to other processors, who choose to have plants on the banks of Rupsha river in the southwest division of Khulna, meaning the shrimps spend hours on the road before they are processed. Because of this, the caliber of shrimp deteriorates.
"This is one of the differences inside our shrimps," said FH Ansarey, managing director and leader of ACI's agribusiness division.
ACI Agrolink purchases black tiger shrimps directly from farmers, so there is next to no risk of bacterial contamination on the way to the processing plant, which includes the capacity to process 30 tonnes of shrimp daily.
Besides, the locational advantage means the caliber of shrimps sold will be better than the other processors'.
"So, ACI should be able to win the confidence of the quality conscious customers abroad," Ansarey added.
ACI is entering the export-oriented sector at the same time when half of the shrimp and fish processing factories have gone out of business because of shortage of a few essential recycleables.
Currently, about 15 processing plants are engaged in exports.
They are registering falling receipts thanks to change in consumer preference: buyers now choose cheaper alternatives to the expensive black tiger and freshwater prawn types of shrimp, which are mainly farmed on 2.72 lakh hectares of land in the southwest coastal region.
A lot more than eight lakh farmers cultivate shrimps because of their livelihoods and the united states market has been the mainstay of their earnings over the past couple of decades.
As demand from abroad has fallen in recent years in the face of ample way to obtain vannamei shrimp from other countries, the neighborhood market acted as a safety net for farmers because of the rising purchasing power of individuals.
ACI Agrolink, which commenced production at their factory in October this past year, is well aware of this fact.
Therefore, the company intends to focus on premium customers through marketing and branding of local amian shrimp, according to Ansarey.
"Consistent quality is crucial for branding."
And ACI is confident of delivering what it promises on the label.
"It is the future of Bangladesh shrimp," he added.
A few industry insiders remain sceptic over whether ACI can flourish in the absence of increased production of shrimp and higher value addition.
Exports are declining as the black tiger variety is failing woefully to withstand your competition from the high-yielding vannamei, said Kazi Belayet Hossain, president of the Bangladesh Frozen Foods Exporters Association.
"Due to this fact, factories are becoming sick day by day."
Feasibility study shows the prospects of new entrants aren't too bright.
"They may prosper but the chances seem to be low," Hossain added.
There are currently 4 or 5 companies that are sincerely trying to improve the country's exports. But they are yet to derive any benefit being that they are not too well-known like ACI, Ansarey said.
"We've a corporate brand image, and buyers trust us," he added.
ACI Agrolink have identified the reasons why Bangladesh isn't faring well in the export market, said its ceo M Saifullah.
"Corporate governance, quality and compliance will be key. Besides, the other are not manage to do the sort of communication that we can," he added.
At the moment, ACI's market capitalisation stands at Tk 1,071 crore.
ACI have almost 220 tonnes of shrimp worth more than $2 million altogether, said M Ahsan Habib head of procedures and marketing of ACI Agrolink.
