March 1, 2007

Thai Union Frozen Products expects a better year despite challenges

Thai Union Frozen Products PLC (TUF), a leading seafood procesor in Thailand, is now expecting a more profitable this year after a challenging 2006. 

The company last year posted a 6-percent drop in net profit due to higher interest expenses and non-recurring merger and acquisition expenses.

Last year, the company recorded net profit of THB 1.96 billion (US$57.8 million), down from 2.08 billion (US$61.4 million) a year earlier.

The drop in profits came despite a 3-percent rise in sales driven by shrimp feed, shrimp exports and pet food.

Besides higher energy prices, the company also had to deal with a 13-percent rise in the baht against the US dollar.

Moreover, raw material prices such as tuna were up 7 percent from a year ago and wages have doubled, president Thiraphong Chansiri said.

Despite the increased costs, TUF could not raise product prices much as doing so would mean losing out to rivals such as China, Vietnam and India, whose currencies did not experience steep increases against the dollar.