November 13, 2012

 

 

Thai Union Frozen Products (TUF) aims to boost its capital expenditure in the next two years to a combined THB12 billion (US$391 million), mainly to expand production capacity and upgrade production facilities in Samut Sakhon.

 

President Thiraphong Chansiri said the company also plans to expand its canned seafood products such as frozen shrimp, salmon and ready-to-eat products.

 

"Our production facilities in Samut Sakhon will hit full capacity in 2014," said Thiraphong, adding that the new capital would also go to upgrade facilities to meet global standards on food production.

 

From 2010-12, Thai Union Frozen earmarked capital expenditures of about THB3 billion (US$97.8 million) annually excluding expenses for mergers and acquisitions. It is confident sales growth this year will reach at least 12% to THB100 billion (US$3.3 billion) despite an increase in raw material prices, particularly for both tuna and shrimp, said Thiraphong.

 

This is down from an earlier projection of 15% worth THB108 billion (US$3.5 billion). The average price of tuna over the first nine months of the year was US$2,168 a tonne, up by 26% on-year. Shrimp prices have been volatile, as supplies have been affected by a disease called early mortality syndrome.

 

The revenue breakdown over the first three quarters was tuna (50%), shrimp and related businesses (22%), value-added products and other products (11%), pet food (7%), sardines and mackerel (6%) and salmon (4%).

 

Company revenue by market was the US (35%), the EU (31%), Thailand (10%), Japan (9%), Africa (5%), Oceania (3%), the Middle East (3%), Asia (2%), Canada (1%) and South America (1%).

 

TUF reported third-quarter sales rose by 12.8% on-year to THB28.3 billion (US$922 million) for a net profit of THB1.61 billion (US$52.5 million), up by 4.6%. Sales for the first nine months this year increased by 10.6% on-year to THB80.4 billion (US$2.6 billion) for a net profit of THB4.08 billion (US$133 million), up by 13.8%.

 

In a related development, TUF reported its shareholding in Avanti Feeds Ltd of India (a listed company on the National Stock Exchange of India) increased to 25.12% from 14.99%. The stake increase was the result of a share swap of Avanti Thai Aqua Feeds stock that was previously owned by TUF. As a result, Avanti Feeds is now the sole shareholder of ATA.

 

The adjustment will allow the company to improve its operational efficiency.

Shrimp businesses in India, especially shrimp feed, have more than tripled over the past three years, suggesting a promising future, said Thiraphong. TUF shares closed on the Stock Exchange of Thailand at THB71.50 (US$2.33) in trade worth THB193 million (US$6.3 million).