Gemini Sea Food, German firm team up to boost shrimp exports
Gemini Sea Food, a frozen shrimp and fish exporter in the country, has entered into a deal with Lenk Frozen Foods (Asia) Company, a leading German-based frozen food company, to boost shrimp exports.
Gemini Sea expects an increase in its revenue of more than Tk50 crore from the deal.
Both parties will work together to expand the business and find nonconventional global markets, which will improve the backward linkage periphery of the business, says Gemini Sea Food.
Usually, Gemini Sea exports shrimps to the USA and European countries by its own sourcing, but under the new agreement, it will process exportable shrimps sourced by Lenk Frozen Foods.
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According to the Dhaka Stock Exchange (DSE), before disclosing information about the deal, in eight trading sessions, Gemini Sea Food's shares soared by 22% to Tk491.4 each, from Tk403.8 each on 26 February.
Industry sources said Gemini Sea Food inked the deal when a country's shrimp exports were passing a bad time as demand or consumption declined significantly in destination countries.
Along with the other shrimp exporters, Gemini Sea Food's half-yearly financials revealed that its revenue has been declining in the past few months due to lower demand.
In a disclosure, Gemini Sea Food said, under this agreement, it will process shrimp to make them exportable to the specified purchase order of Lenk with 100% advance payment.
It said the export momentum of Gemini might achieve a significant unconventional market, which will add more than Tk50 crore revenue and reduce the cost of production along with the operating expenses to ensure a sustainable growth in future profitability.
Revenue falls on slower exports
In the first half of the current fiscal year, the company has reported a 21% fall in revenue to Tk40.50 crore.
Despite a revenue drop, it has reported an 80% growth in profit to Tk4.33 crore during the July-December period of 2022, which was Tk2.40 crore in the same period of the previous fiscal year as its cost of raw materials prices reduced compared to the previous period.
Regarding the revenue drop, it said the demand and price of black tiger (BT) shrimps are under pressure in the global competitive market because of the aggression of new spices like Venami.
On the other hand, the freshwater shrimp market in the USA is slowly increasing due to the improving of Covid situation. Moreover, the entire global market was down in 2022 and 2023 due to the Russia-Ukraine war.
After a significant fall in the 2019-20 and 2020-21 fiscal years owing to the pandemic, shrimp exporter Gemini Sea Food witnessed a big jump in revenue in fiscal 2021-22.
In fiscal 2019-20, Gemini Sea Food incurred a loss of Tk4.61 crore, and in the last fiscal year, it made a profit of Tk5.86 crore.
Gemini Sea Food exported organic shrimp from Bangladesh to EU retailers in 2008.
It exports products to the USA and EU countries like the UK, Germany, Denmark, the Netherlands, Belgium, and Russia.
In fiscal 2021-22, the company paid a 10% cash and 40% stock dividend to shareholders. The stock dividend is mainly for maintaining regulatory requirements to increase its paid-up capital.
