Free Press Journal

Manu Mahtani, Managing Director Castlerock, discusses challenges and opportunities in the fishing industry

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Seafood processing in India is a multi-billion dollar industry, generating millions of direct and indirect jobs. Unfortunately, it has not got its due from the Government, in terms of policy clarity or support. The industry has now shifted focus to freshwater aquaculture rather than deep-sea merchant catch. One of the oldest players in the industry is Castlerock, which is well-qualified to quantify the challenges and opportunities in the industry. Manu Mahtani, Managing Director, discusses relevant industry issues and the company’s growth plans in a chat with R N Bhaskar and Pankaj Joshi.

Can you chart the industry growth contours?

The seafood industry in India has its roots in the Kerala region, from where it gradually spread to Maharashtra and Gujarat through the sixties and seventies. The key to growth obviously was coastal fishing access. The west coast of India was a large coastal fishing base, which served the seafood processors well. The east coast suppliers – Andhra Pradesh and Bengal – were not significant in comparison. However, in the mid-nineties, aquaculture (fish breeding) started and then the equations changed. The east coast gained more prominence as Andhra Pradesh companies picked up the concept and became leaders, followed by Bengal, Orissa and Tamil Nadu. Companies like us, focused on the west coast and on market procurement, lost out on this period of growth. We slipped from our premier position while aquaculture-focussed companies reached turnover levels of Rs 600 crore.


Aquaculture advantages are immense, like in the case of shrimp farming where the season lasts for ten months of the year. Companies relying on coastal fishing for their input simply cannot dream of such a season. Then again, each state has its own policies. Fisheries industry does not have a ministry, even though it employs millions directly and indirectly – fishing, selling, processing. There is no regular policy – breeding season, net size, conservation of fish population are all issues where policies are needed. In so many species, like pomfret, there has been massive overfishing. Therefore, the sea catch is shrinking across categories. In local pomfret it is massively down.

Where does the industry stand and how important is it to have a policy for catalysing growth?

For India, fish processing is a six billion dollar-export market. The local market is around three times this size. In that context, when we say that there is no industry attention, no policy, no support, you can estimate the gravity of the situation. All these can galvanise the industry growth.

Having a policy in place is vital. Gujarat is a late entrant into aquaculture, but shrimp farming there is flourishing because there is a policy in place right from land allotment to other key aspects. Another reason for a flourishing industry in Gujarat is the essential nature of people there – they have better vision and business sense. They have from the start built business with systems unlike the Andhra Pradesh entrepreneurs. The Gujarat companies never crowded their ponds with excess seeding, thus avoiding disease and other complications.

Today aquaculture in Gujarat is growing at 30 percent. Against that, Maharashtra, with an equivalent coastline and equal potential, is suffering in comparison. Here you have instances of rampant purse sein fishing, which may be allowable in limited measures or for limited period. But when done consistently it just spells doom for growth of sea-catch population. Overseas laws are much more stringent. In Australia for instance, a young catch must be put back. If caught, penalties may extend to even imprisonment.

For Indian exporters, there was a lull in business in 2016 when South Africa had put a temporary ban on Indian imports. As a company, we had in fact to ship back some quantities. There is some similar talk of EU proposing to ban cultured seafood products from India, on the grounds that they may have issues with process control in the farms.

What we could request from the Government is greater focus on fish conservation, to maintain relevance of sea-catch. Today, the catch is dwindling alarmingly and that would be bad for the industry. Better study would help focused action on areas like breeding time, avoidance of undersized catch and so on. All these would help sustain coastal fishing and the processing of the same, which would be worth thousands of livelihoods.

Can you provide some perspective on your operations and growth plans?

For Castlerock, today main markets are the US, the EU, Japan, China and Russia. We are looking at a revenue in the range of Rs 600 crore in the current fiscal wherein the US market would contribute around 50 percent. Our earlier infrastructure consisted of four functional factories each in the vicinity of Mumbai and in Veraval (Gujarat). Today, these have reduced to two each. Now with growth focus on aquaculture, we are looking to revive one of the closed units in Mumbai.

Castlerock is looking to grow to Rs 1, 200 crore over the next three years. In Gujarat, we have applied for a land allotment of 100 hectares near Bharuch, wherein the process is nearly through. Against that, in Maharashtra such a policy does not exist. Hence, to cater to our Maharashtra market and service our infrastructure here, we are looking to buy 200 acres in South Gujarat, adjacent to the state borders. You can estimate the aggression in our growth plans now, because as pioneers we have a lot of growth potential to harness. We estimate a capital investment outlay of Rs 70-80 crore over the next three years.

In south Gujarat, apart from the farm development, the facility would also include a feed mill to generate feed for the prawn farm. This is right now externally sourced. Among the funding options, one is a planned equity public issue. The feed business would be a separate division in itself. Today our supply comes from Thailand, from Avanti Foods. We are, in fact, a distributor for the Western region and the only other key player in this market is Godrej Agrovet. Now we plan to make it ourselves.

The separate investment in feed business would be around Rs 50-70 crore. We think that this business with proper planning, can grow anywhere between Rs 500 and 700 crore.

Year Tonnage Revenue (Rs crore)
 2013-14 11,852 421.16
 2014-15 10,415 430.26
 2015-16 7,682 342.49
 2016-17 9,232 410.80
H1 2017-18 6,137

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