12.40

6.80

5.80

0.80

1.20

7.80

8.80

9.00

0.20

0.20

12.40 7.90

7.50

Guides for gutter

8.40

1

Rabobank F&A insights

Lian Heinhuis, Food and Agribusiness Research

Strictly confidential

November 2015

Global Shrimp Aquaculture Industry Dynamics

2 2

Table of contents

Sections

I General outlook: times of supply volatility to persist

II Developments in key import markets

III Analysis of key production regions

IV Challenges

V Opportunities and concluding remarks

23

General outlook: times of supply volatility to persist 1

4

Key observations on the shrimp industry

High supply volatility expected to remain due to recurring disease issues

Re-ranking of leading exporters

Good global demand which is expected to continue

Growing importance of sustainability and certification

Emergence of new business models and a holistic approach to biosecurity

I

II

III

V

IV

Developments in key import markets 2

6

Main export markets stable in volume terms – i.e. consumption per capita is not increasing

Source: Globefish 2015

Shrimp imports in volume by EU countries, USA and Japan

0

200

400

600

800

1000

1200

1400

1600

1800

2009 2010 2011 2012 2013 2014

‘00

0 t

on

ne

EU 28 Extra EU 28 Intra USA Japan

7

But there has been considerable growth in value

Source: Rabobank, FAO 2015

Shrimp imports in value by EU countries, USA and Japan (includes E8 internal trade)

0

2

4

6

8

10

12

14

16

18

2009 2010 2011 2012 2013 2014

bil

lio

n u

sd

EU 28 Extra EU 28 Intra USA Japan

23

Analysis of key production regions 3

9

Total supply of farmed shrimp: tentative growth expected, but low prices will dampen recovery

Source: Rabobank 2015

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F

LAM

Asia

3% 4% 2%

7% 5%

-3% -2%

9%

6%

4%

-5%

0%

5%

10%

2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F

Global farmed shrimp supply

10 29

Bulk of industry is in SE Asia, but highest supply and export growth rate is likely to be outside of this region

91 90

268

355

496 524

India Indonesia

305

67

599

330

650

600

Thailand Viet Nam

16

5

40

55 53 54

87 84 86

Malaysia Myanmar Philippines

88

850

1100

China

2.5 4

40

Australia

25 50

33

74

281

100 118

415

127

Brazil Ecuador Mexico

2000 2012 2020E

Thousands tonnes

11 11

Thailand: a shrimp empire collapsed, but recovery seems on the way

Thai shrimp aquaculture production

Source: Rabobank, based on FAO and other sources 2015

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F

tho

usa

nd

to

nn

es

12 12

EMS TARIFFS TIP

A perfect storm in the Thai shrimp industry

13 13

China: light supply recovery, will not match demand

China: farmed shrimp production

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F

tho

usa

nd

to

nn

es

Source: FAO, Rabobank 2015

14 14

Shrimp demand is strong and is being fulfilled by imports that are much higher than stated in official data

China: shrimp imports and exports in volume (official figures)

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014

Th

ou

san

d t

on

ne

s

Total Imports Total Exports

Source: Rabobank, Uncomtrade 2015

15

Booming Indian shrimp exports

2008

in order of trade volume

map shows

85% of volume

86% of value

EU (#1)

65,603 tonnes $352 million

USA (#3)

21,538 tonnes $141 million

UAE(#4)

6,837 tonnes $42 million

Japan (#2)

28,815 tonnes $192 million

16

Booming Indian shrimp exports

2013

USA (#1)

82,199 tonnes $1,063 million

EU (#2)

52,780 tonnes $495 million

Japan (#4)

19,793 tonnes $244 million

Vietnam (#3)

33,269 tonnes $366 million

in order of trade volume

map shows

80% of volume

83% of value

17

Exports to US, EU are increasing, but uncertainty remains

Source: Uncommtrade 2015

Indian shrimp exports by volume and value

0

0.5

1

1.5

2

2.5

3

3.5

4

0

50

100

150

200

250

300

350

400

450

2009 2010 2011 2012 2013 2014

Bil

lio

n U

S D

oll

ars

Mil

lio

n K

ilo

s

Processed

Fresh or chilled

Frozen

Trade value

18

Prevalence of EHP is expected to result in a 10-20% decline of farmed shrimp production in India

Source: Seafood Exporters Association of India

Total production of farmed shrimp in India

353

300.05

0

50

100

150

200

250

300

350

400

2014 2015f

Th

ou

san

ds

MT

19

Summary: how long will Asia be the dominant shrimp exporter of the world?

Recovering volumes but just slightly

Costs are still high

New business model needed

Strong domestic demand

Long term net trade position of Asia likely to decline

I

II

III

IV

V

20

Rising Ecuadorian shrimp exports

2008

EU (#1)

72,836 tonnes $390 million

USA (#2)

51,565 tonnes $293 million

Chile (#4)

1,581 tonnes $9 million

Colombia (#3)

1,914 tonnes $5 million

in order of trade volume

map shows

98% of volume

98% of value

Japan (#5)

853 tonnes

$6 million

21

Rising Ecuadorian shrimp exports

2013

EU (#1)

83,376 tonnes $622 million

USA (#2)

73,323 tonnes $631 million

Colombia (#5)

4,609 tonnes $24 million

Vietnam (#3)

37,536 tonnes $301 million

China (#4)

8,173 tonnes $72 million

in order of trade volume

map shows

94% of volume

93% of value

South Korea (#6)

3,976 tonnes $33 million

22

Ecuador is export focused, was the # 1 beneficiary of the disease issues in Asia

Source: Uncommtrade 2014

Ecuadorian shrimp exports by volume and value

0

0.5

1

1.5

2

2.5

3

3.5

4

0

50

100

150

200

250

300

350

400

450

2009 2010 2011 2012 2013 2014

Bil

lio

n U

S D

oll

ars

Mil

lio

n K

ilo

s

Processed

Fresh or chilled

Frozen

Trade value

23

Ecuador’s industry shifts attention to Asia and China and becomes the link between Asian and Western markets

75.47 80.49 89.73 76.56

75.49 65.77

73.81

72.2

24.12 36.89

65.82 118.47

4.83 5.98

14.66

10.48

3.6 1.82

1.89

1.9

0

50

100

150

200

250

300

YTD '12 YTD '13 YTD '14 YTD '15

mil

lio

n l

bs

Europe USA Asia Americas Africa

19.34 23.17

19.51 20.52

18.43 14.97

20.13 16.43

3.87

9.23 10.93

26.69

0.78

1.71

3.6

2.17

0.79

0.62

0.42

0.35

0

10

20

30

40

50

60

70

May-12 May-13 May-14 May-15

mil

lio

n lb

s

Europe USA Asia Americas Africa

Ecuadorian shrimp exports by volume in May (left) and YTD May (right)

Source: Urner Barry 2014

24

Although the latest figures show the pressure on the Ecuadorian industry as a result of recovery in Asia

Source: Central Bank of Ecuador

1.2

1.25

1.3

1.35

1.4

1.45

1.5

1.55

155

160

165

170

175

180

185

190

195

200

2015 2014

Mill

ion

s

Th

ou

san

ds

MT

Volume

Value

YTD shrimp exports Ecuador in volume and value (first 7 months of the year)

25

Brazil: Unfulfilled promise, can this change in the current conditions?

Source: Rabobank 2015

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F

tho

usa

nd

to

nn

es

Brazil shrimp aquaculture

26

Mexico – huge potential but mysteriously stuck by EMS from the other side of the Pacific Ocean

Source: Rabobank, Kontali, Subsecretaría de Pesca

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F

tho

usa

nd

to

nn

es

27

Exchange rates are an important factor for the competitiveness of shrimp producers on global markets

-21%

-6% -5%

-4%

-14%

-44%

-23%

-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

IDR VND INR CNY THB BRL MXN

2 Y

ear

chan

ge

(dep

reci

atio

n)

agai

nst

US

D

28

LAM summary: potential for further growth

Well positioned region, with low cost

But many challenges, not living up to the potential so far

Ecuador seems unique

LAM growth forecasts are difficult due to the unpredictable situation in Brazil and Mexico

Potentially the most profitable shrimp farming region

I

II

III

IV

V

Challenges 4

30

With the introduction of Vannamei shrimp there was increased growth, but also increased biological risk

Source: Rabobank, FAO 2015

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

‘000 MT of farmed

shrimp

Monodon other Vannamei

Aquaculture starts initially with wild juveniles

Monodon farming drives growth

Global prices high

Vannamei introduction

Industry 400% growth

Shrimp Aquaculture 2.0

1

2

3

Monodon culture faces biological challenges

Cost rise

Other

31 31

Source: Rabobank

Why is shrimp farming a sector with high biological risk especially in Asia?

Trading Feed manufacturing

Fish & shrimp processing

Juveniles

Fish meal and other commodities

Shrimp farming

Fish by-products as input for feed

Typical shrimp farming business model in Asia

32 32

This means a large part of the farming is done by peasant or subsistence farmers

Many shrimp farmers in Asia are

subsistence farmers moving into

shrimp from other agricultural

activities

Experience and knowledge as well

as control at this critical point can

be low

This business model is often

successful for poverty alleviation

but has a higher risk

33 33

It’s the youngest animal protein industry

All shrimp farming is done in developing countries

It’s a tropical species

There are many different business models and sanitary levels neighboring each other

Even with the closed system, farming is still open to the environment

Shrimp is a heavily traded product, even among exporters

….and there are many other factors that cause supply side volatility

1

2

3

4

5

6

Opportunities and concluding remarks 5

35

Opportunities: there is shrimp farming potential also in relatively unexplored regions

Africa Australia Middle East

36

Another opportunity: increased cooperation within the sector to tackle disease issues- like was done in the Chilean salmon industry

37

GSI: a game-changing industry dynamic, tackling the image of salmon farming with NGOs, governments and customers

Source: GSI 2015

• Lower lice levels

• Eliminate escapes

• Reduce environmental impact of farms

Focus on reducing marine ingredients from wild catch fisheries

Source only from sustainable marine ingredients

Biosecurity

Standards

Feed and nutrition

38

Concluding remarks

A period of high supply (and price) volatility is to persist

Asian producers are challenged with biosecurity issues and competitiveness

Future potential growth areas for export are especially in LAM, but also in Australia, Africa

and ME

To ensure sustainability of the industry, cooperation is key

I

II

III

IV

39

Important notice

This presentation has been prepared exclusively for the benefit and internal use of Huon Aquaculture (“Huon Aquaculture” or the “Company”), and does not carry any right of publication or disclosure other than to Huon. Neither this presentation nor

any of its contents may be used for any other purpose without the prior written consent of the Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (“Rabobank”).

The information in this presentation reflects prevailing market conditions and our judgment as of this date, all of which may be subject to change. This presentation is based on public information. The information and opinions contained in this document

have been compiled or arrived at from sources believed to be reliable, but no representation or warranty, express or implied is made as to their accuracy, completeness or correctness. The information and opinions contained in this document are wholly

indicative and for discussion purposes only. No rights may be derived from any potential offers, transactions, commercial ideas et cetera contained in this presentation. This presentation does not constitute an offer or invitation. This document shall not

form the basis of or be relied upon in connection with any contract or commitment whatsoever.