Export of Processed Shrimps

Operations Management

End Term Project

Group 7

Subrat Jain - 170301039

Ritesh Amale - 170301034

Hridayankur Dev Sarma - 170301027

Uday Sethi - 170301045

Vejei Carthic Thirunavukkarasu – 170301047

Table of Contents

BACKGROUND 3

EXPORT QUALITY SHRIMPS 3

SOURCING 4

SITE SELECTION 5

CAPACITY PLANNING 8

PROCESS FLOW 8

EQUIPMENTS USED 9

ACTIVITY RELATIONSHIP DIAGRAM 10

FINAL LAYOUT 11

LINE BALANCING 12

PROCESSING TIME 12

REFERENCES 13

Export of Processed Shrimps

BACKGROUND

India’s seafood exports touched an all-time high of $5.78 billion (₹37,870.90 crore) in FY17 on robust demand for frozen shrimp and frozen fish in overseas markets. India exported 11,34,948 tonnes and the figure in the previous year was 9,45,892 tonnes, valued at $4.69 billion.

While the US and South East Asia continue to be major importers, demand from the EU has also gone up substantially.

Frozen shrimp maintained its position as the top export item, accounting for 38.28% in quantity and 64.50% of the total earnings in dollar terms. Shrimp exports increased by 16.21% in terms of quantity and 20.33% in dollar terms.

The US imported 1,88,617 tonnes, accounting for 29.98% in dollar terms. Exports to the US grew 22.72%, 33% and 29.82% in terms of quantity, rupee value and dollar value, respectively.

South East Asia remained the second largest destination of marine products, with a share of 29.91% in dollar terms, followed by the EU (17.98%), Japan (6.83%), West Asia (4.78%), China (3.50%) and other countries (7.03%). (1)

EXPORT QUALITY SHRIMPS

The aquaculture sector of India witnessed a boom with the introduction of white leg shrimps (Litopenaeus Vannamei; also known as Penaeus Vannamei) in 2004. The production of Vannamei variety has outpaced Black Tiger and has resulted in increasing exports over the years as can be seen from table below. The overall export of shrimp during FY17 was pegged at 0.43 million tonnes (0.37 million tonnes in FY16) with a y-o-y growth by 16.21%, majorly at the back of y-o-y growth in export quantity of Vannamei shrimp by 28.46% in FY17 to 0.33 million tonnes.

SOURCING

Cultivation, harvesting and storing:

The shrimp farmers design and construct a suitable pond according to the characteristics of the selected site and culture system and maintain the water quality suitable for the selected breed. The cultivation to harvest takes 120-150 days’ time with good quality seed stocking and availability of all the required nutrients in the feeds, which constitutes 60%-70% of the total variable cost of farming. As per best practices, the cropping is halted for 40-45 days after one cropping to make the ponds ready for next cropping. Generally, the farmers are able crop twice a year. As the cold storage involves high cost, the cold storage chains act as a commissioning agent who procures the entire harvest and store it for up to one year to supply to the processors or wholesalers in the local market.

Processors/Exporters:

The processors procure the shrimp, either directly from the farmers or from the agents, depending on the location, availability and pricing of the shrimp. Farmers have lower bargaining power as they lack the cold storage. Due to seasonality in cropping, the processors procure large quantum of harvest during the harvesting seasons which increases the inventory and working capital requirements. The shrimp processors are equipped with the advanced cold storages in their facilities capacity ranging between of 1,000 Metric Tonne (MT) and 10,000 MT where the processed shrimps can be stored for up to 1 year, using Individual Quick Freezing (IQF) process, freezing the product at -27 degrees centigrade. Though the IQF process requires large capex, it is a more efficient approach than the earlier block freezing where customers were forced to buy the product in bulk. The transportation from farmers to processing units to ports requires insulated vans where the temperature needs to be maintained at -18 degrees centigrade

SITE SELECTION

There are several factors involved during site selection.

Topography and Climatic Condition

Topographically, the best areas for shrimp culture are those with average natural ground elevations of about 1-3 m above mean sea level or at least 1 m above the highest high tide level to allow drainage and harvesting. The cost of pumping increases in highly elevated sites. The sites should have minimum vegetative cover, be near the sea or other natural waterways such as rivers and streams, have easy access to roads, a sparse population and be nearly square or rectangular.

In terms of climatic conditions, areas having short and not as pronounced a dry season with moderate rainfall distributed throughout the year are the best suited for shrimp farming. A pronounced long dry season may cause an increase in water temperature and salinity, which will promote excessive growth of algae and result in oxygen depletion at night.

State wise table of brackish water area & area under cultivation

S. No. State Estimated brackish water area (ha.) Area under cultivation (ha.)

1 West Bengal 405,000 34,660

2 Orissa 31,600 11,000

3 Andhra Pradesh 150,000 50,000

4 Tamil