January 31, 2014

Thai Union predicts 10% tuna growth despite flat market

Despite flat growth in canned tuna development markets, Thai Union Frozen (TUF) Products is forecasting a 10% growth rate in its tuna business.

The current growth rate of 2-3% annually in developed countries may be far from that goal, but Wai Yat Paco, head of investor relations for the company, said there are still many markets where tuna is not yet popularised.

He also points out a positive trend in the industry that bodes well for demand. Tuna prices have been decreasing since less than six months ago, reaching US$1,400-US$1,500 per tonne.

TUF will push to expand its tuna sales through expanding market coverage for each of its canned tuna brands beyond their home markets, but it is also setting higher growth targets for its non-tuna business to help reduce dependence on tuna sales.

In three years, the company aims to increase the contributions from sardine and mackerel products and pet food to over 10% from 6% and 7% at present, and value-added products and "other products" to 15% from 10%.

In January-September of last year, tuna contributed 49% of TUF's total income, followed by processed shrimp and shrimp feed meal at 24%, pet food at 7%, sardine and mackerel at 6%, salmon at 4%, and value-added and other products at 10%.

Innovations can also help create new demand but they will take time. Market expansion will be a more near-term strategy.