Thai Union Frozen Plc (TUF), Thailand’s largest seafood exporter, is confident it can achieve a 40% increase in sales this year to at least US$3 billion despite the European debt crisis, says president Thiraphong Chansiri.
“The canned food business has not had any impact from the economic crises in the United States and Europe, which have lasted years already. In fact, the consumption of canned tuna has increased because of the bad economy due to its low price,” said Mr Thiraphong.
“[Tuna] is the cheapest source of protein in the market, even cheaper than chicken. Shrimp, meanwhile, are the cheapest seafood in the market.”
However, the prices of raw material have increased by almost 20% compared to last year, resulting in the same level of increase for product prices.
Prices of tuna this year should average $1,600 per tonne, with those in the first half averaging between $1,650 and $1,700, said Mr Thiraphong.
After spending 680 million (28.5 billion baht) buying France’s MWBrands Holdings (MWB) last year, TUF has no plan for major investments for at least two years starting this year.
As part of the company’s aim to achieve $4 billion in sales by 2015, it plans to lower debt-to-equity ratio from 1.6 times to an appropriate level of 1:1 within 2013 before making more investments.
“For the next two years, we would be focusing on developing our MWB brand in Europe, lowering costs and expanding markets in Europe,” said Mr Thiraphong.
While 9% of the company’s sales are domestic, 33% are exports to 27 countries in Europe, up from 12-13% following the MWB acquisition. Exports to Japan are 9% of total sales, while 37% are to the United States and the the rest to other regions such as the Middle East and South America.
Revenue from its own brands is 62%, up from 50% last year, due to the acquisition of MWB, while original equipment manufacturing makes up 38%.
Mr Thirachai declined to comment on the new government’s wage increase policy, saying the details remain sketchy, but he noted that a sudden increase would result higher labour costs, which account for 10% of TUF’s total costs.
“Our economy is currently strong, except that there is uncertainty in the new government’s policies,” he said.
Shares of TUF closed on Thursday on the SET at 53.25 baht, up 1.25 baht, in trade worth 415.7 million baht.
Source: Bangkok Post
