The Market

The acute shortage of product, rising shrimp prices and an increased awareness in certain export markets for a healthier and sustainable food source has created an opportunity that EA|GA RAS Technologies is well suited to take advantage of due to the higher value added production methods we employ. There are many insurmountable issues facing open pond shrimp farming that will continue to be problematic in the future. Starting with the initial EA|GA RAS Technologies design, biosecurity protocols can be followed insuring that we only produce a quality product that will be accepted in the world market.

11J007 EA|GA RAS Technologies - The Market

Consumers and subsequently governments in the primary export markets are demanding a product that is healthier, eco-friendly and sustainable. The product from EA|GA RAS Technologies is targeted towards this very demanding market. The results of the technology used to bring our product to market are virtually unreachable by existing techniques used in Vietnam today. As a result, EA|GA RAS Technologies biosecurity protocols and through our facility that supports such protocols we are able to offer:
  • Predictable and stable supply of raw shrimp.
  • Highest quality, raw shrimp which is fresh, free of all chemicals, antibiotics and growth hormones.
  • 100% natural and organic.
  • Exceeds standards set by certification agencies and others including Global Aquaculture Certification Council, US DEA import standards, EurepGAP.
  • Recognized as a sustainable product by Marine Stewardship Council, World Wildlife Fund and others.

Global shrimp production has declined due to EMS and other diseases resulting in prices skyrocketing. Driven by high demand on the world market for shrimp and the urge for foreign currency earning, shrimp farming has been explicitly encouraged by the government of Vietnam. The EA|GA RAS Technologies facility will be able to produce 500 tons of a high quality product that can command top pricing for the export market that is is healthier, eco-friendly and sustainable. All of which the consumers and subsequently governments in the primary markets are demanding. This will be a problem for most shrimp farmers in Vietnam.
  • Higher value added production methods positions EA|GA RAS Technologies to supply a product demanding top prices.

  • Demand from the US, EU and S. Korea forecast to remain high.

  • Initial sales through existing export processors and domestic high end customers.

  • Second phase of sales program through country specific importers.

  • Brand awareness and additional processing required for phase two.

  • Limited amount of local direct sales to high end customers with global recognition used to initiate brand awareness.

  • Markets are demanding healthier and sustainable food source.
In 2013, Vietnam shrimp exports reached US$ 3.1 billion, an increase of 39.1% compared to 2012. he 500 tons of production that EA|GA RAS Technologies will produce represents 0.2% of the 253,052 tons exported in 2013. The following table illustrates the export market for Vietnam shrimp.

11J007 EA|GA RAS Technologies - Top Export Market for Vietnam Shrimp


Top export markets for Vietnam comprised over 80% of market share.

USA
No.1 - US$ 831 million
In 2013, white-leg shrimp supply from Thailand declined dramatically due to EMS, Vietnam and India became alternative supply sources due to increase in production.
In September, 2013 the Vietnam shrimp industry also received two important decisions ; as a result of the 7th anti-subsidy lawsuit, the entire 33 shrimp exporters involved were cleared. In late September, 2013, ITC denied DOC’s decision of 4.52% tax tariff on shrimp from Vietnam and 6 other countries initiated by local shrimp industry in December 2012. The case was considered closed.

Japan
No. 2 - US$ 709 million
Vietnam was Japan’s largest supplier of frozen raw shrimp in 2013.On 21-Jan-14, Japan Ministry of Health, Labor and Welfare issued an official announcement about raising maximum residue limits (MRL) for Ethoxyquin on Vietnam’s shrimp to 0.2ppm (20 times higher than level of 0.01ppm applied previously). Besides, Japan also dropped the regulation of 100% ETQ check on Vietnam’s shrimp.

EU
No. 3 - US$ 409 million
In 2013, Vietnam shrimp exports to EU reached US$ 409.5 million, increased 31.3% compared to 2012.
Frozen raw shrimp still dominated shrimp imports to EU. During first 6 months of 2013, frozen raw shrimp imports in EU from various sources reached US$ 1.45 billion while processed shrimp only accounted for US$ 434 million.

China
No. 4 - US$ 381 million
Shrimp exports to China have shown a sharp increase in 2013 with no end in sight to the increasing demand for shrimp in China.
It is expected that China will surpass the UE to become the third largest consumer of shrimp produced in Vietnam. Chinese have been competing with Vietnamese seafood processing companies to buy shrimp and ship to China. China is not only collecting high quality shrimp, but they actively accept low quality products as well.
Recently, the Chinese have been approaching the farmers directly for procurement of shrimp. It has been reported that the Chinese buyers also inject the shrimp with chemicals and other impurities to increase their weight. The approach of the Chinese in the Vietnam export market is destabilizing the market with higher prices vie poor business practices as well as the increased price that the Chinese are willing to pay has resulted in a shortage of shrimp for the Vietnamese processors and exporters.

South Korea
No. 5 - US$ 225 million
South Korea is developing market with similar consumer tastes as Japan that continues to expand. Shrimp exports to South Korea in 2013 saw an increase of 31.2% compared to 2012. South Korea also re-process much of it’s shrimp import, re-exporting it to japan.



Existing RAS Facilities
11J007 EA|GA RAS Technologies - Existing RAS Facilities
First RAS was developed in Japan in 1937.

Commercial applications of RAS technologies started in 1950s with Taiwan leading the development.

Today there are various sizes of RAS Systems operating in North & South America, Asia, Europe and the Middle East.

China is currently investing in many large RAS facilities.

EA|GA RAS Technologies using proven process technology by Longhorn Organics.











11J007 EA|GA RAS Technologies - Longhorn Organics, Inc