The Hindu Business Line : Seafood units pin hopes on IBA for revival

BELEAGUERED seafood units are pinning their hopes on a forthcoming board meeting of the Indian Bank's Association (IBA), where a proposal submitted by the units with regard to their revival will be discussed.

The board meeting of IBA is slated to be on October 25. After discussing the proposal, IBA will again call for another round of deliberations with the representatives of the seafood sector, industry sources said.

On October 6, IBA held a preliminary round of discussions with the representatives of the seafood sector in Mumbai. The sources said IBA's response to the proposal was `positive' at this meeting.

The debt-laden seafood units, many of which have been declared sick, have proposed to the IBA that they be allowed to hammer out a one-time settlement of their dues to the banks and work out a rehabilitation package.

They have also suggested that units be allowed to go in for amalgamation so that they can operate as a single entity, enjoying benefits such as economies of scale.

The sources said there were some 130 seafood units in the country that have now sought the help of banks to revive their fortunes. Collectively, these units owe around Rs 260 crore to various banks and financial institutions. More than half of these dues are accumulated interest on loans.

According to the Seafood Exporters Association of India, many of the units have landed in financial trouble because of reasons well beyond their control.

Incidents such as plague in Surat, breakout of disease in aquaculture farms, blacklisting of cooked shrimp by the US and ban on Indian seafood announced by the European Economic Community (EEC) are some of the factors that are blamed for the current plight of the units.

On the other hand, processing units invested in modernising their facilities to remain competitive in the global markets. The lack of adequate raw material available for all units to function viably and the cutthroat competition prevailed in the sector also contributed to the downfall, the sources pointed out.

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