Seafood exporters seek revival package

The Forum for Revival and Reconstruction of Seafood Export Industries in India has urged the central government for a one-time settlement to clear around 150 non-performing asset (NPA) accounts, involving nearly Rs 300 crore, of the sick seafood export companies. It has also sought a revival package for these companies.

The forum called on Union Finance Minister P Chidambaram in New Delhi recently and urged him to support the seafood industry with a revival package. The forum sought a one-time settlement at 15 per cent of the net loan.

It also asked the government not to liquidate the properties of the promoters and owners of the seafood export companies. The government was also urged to put on hold all the legal and recovery proceedings under the Securitisation and Recovery Act.

Speaking to Business Standard, Veerabhadra Rao, a leading exporter, said: "The government has extended concessions through a one-time settlement, based on the Murari Committee's recommendations, to the ailing deep-sea fishing trawler industry in 1997. Due to these concessions, the deep-sea fishing industry benefited to the tune of Rs 180 crore. On the same lines now, the newly-formed forum, with the support of Seafood Exporters Association of India (SEAI), is asking for a one-time settlement to clear the NPA accounts of seafood exporters involving nearly Rs 300 crore in the country."

As part of its recommendations, the forum also sought the government's support for the consolidation and merger initiatives to revive the sick exporting units.

"We have also suggested some rehabilitation packages for the units which have the potential for revival. If the industry is revived, around 50,000 workers and fishermen will benefit from this. Keeping this in mind, the forum asked for some relief measures from the government. Otherwise, most of the small and medium exporters will vanish, which will lead to a significant drop in marine exports from the country," M N Reddy, an active member of the forum and a leading exporter, said.

Around 150 small and medium seafood export companies located in the states of Andhra Pradesh, Kerala, Karnataka, Tamil Nadu, Gujarat and West Bengal are in dire straits.

Several merchant exporters are also on the verge of closure. These units collectively owe around Rs 300 crore to various banks and financial institutions and the debt recovery tribunals had initiated proceedings against many of them, Reddy said.

The reported move by the financial institutions to initiate action under the Securitisation and Recovery Act would further aggravate the situation.

Over the last decade, the central government earned close to Rs 40,000 crore of foreign exchange because of the seafood exports alone. These sick companies have collectively accounted for nearly Rs 3,000 crore worth exports. They have paid around Rs 100 crore to the banks as interest.

They have also paid bank charges and premium to Export Credit Guarantee Corporation to the tune of Rs 50 crore. The banks have already collected an amount equivalent to their total loan amount," Veerabhadra Rao, another leading seafood exporter, said.