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Thai Union 2012 Sales Reach USD 3.4 Billion, Profits Drop Thailand, March 5, 13


Thai Union announced its 2012 annual result with sales reaching USD 3.44 billion (106,698 million baht), up 6% from that of the previous year

Throughout last year, TUF had faced a host of challenges, namely a fire incident at one of its Thai processing plants, the high cost of tuna and shrimp raw materials and strengthening Thai baht, to name a few. The firm nevertheless managed to increase its sales continuously. The management is confident that the firm will be able to continue this growth trend in 2013.

Mr. Thiraphong Chansiri, president of Thai Union Frozen Products PCL. (TUF), a leading manufacturer and exporter of quality seafood with innovations and the owner of some world’s leading seafood brands, stated that his firm’s sales in US dollar terms increased by 6% from USD 3,232 million in 2011 to USD 3,441 million. However, the annual net profits dropped by 8% to 4,694 million baht (USD 155 Million) from 5,117 million baht (USD 166 Million) a year earlier.

“For the fourth quarter of 2012 alone, sales increased in both Thai baht and US dollar term. There were several challenges throughout 2012, but our determination to perform allowed us achieve the quarterly sales in US dollar terms of USD 861 million showing an 2.3% increase from USD 837 million during the same time in 2011. However, the quarterly net profit dropped 60% from the same quarter a year ago,” Khun Thiraphong added.

In 2012, TUF’s sales can be broken down in 6 main product categories as follows: tuna (49%), shrimp and related products (23%), sardine and mackerel (6%), salmon (4%), pet food (7%) and value-added and other products (11%). In terms of market, they can be divided as follows: USA (36%), the European Union (30%), Thai domestic market (10%), Japan (9%) and the rest of the world (15%).
As suggested by the result, Thiraphong admitted that 2012 was generally a very challenging year, particularly during the fourth quarter when a host of negative factors occurred at the same time.
For instance, the price of tuna raw material suddenly dropped sharply from its historic peak of USD 2,350 per metric ton in September to a recent low of USD 1,900 per ton within a month’s time and stayed there until the end of the year. This sharp volatility of raw material price did negatively impact the firm’s profit margin during the period. In addition, the business also suffered a shortage of shrimp supply and consequent skyrocketing shrimp raw material prices caused by the severe EMS (Early Mortality Syndrome) epidemic.
Chicken of the Sea, the firm’s US business, mostly relying on canned light meat tuna, did not grow as expected due to intense price competition. In spite of these challenges in the recent quarter, the management believes that they are just temporary.

Khun Thiraphong explained,”Our performance in the first 9 months last year was strong, in particular the third quarter when sales and net profits broke new highs. We remain profitable despite the fact that the eventual annual net profits did not meet our goal. In 2012, the major negative factors included a fire incident in our shrimp plant, the high cost of tuna and shrimp raw materials and booking of a one-off extraordinary accounting treatment during the 2nd quarter.”

He further added, “In the first quarter of 2013, the operating performance should improve when the tuna business returns to normal.”
“Our business plan in 2013 is to emphasize investments for growth. We will increase our production capacity, expand to new markets and stress new product developments. Meanwhile, we will also more aggressively penetrate the European markets, such as Eastern Europe, Russia, Germany as well as the ASEAN Economic Community (AEC). Within AEC, we are currently expanding in Vietnam, Myanmar and Laos with our own product brands, such as Sealect, Fisho and Bellotta. This year, we will also penetrate the Indonesian market.
In addition, TUF is still considering acquisition opportunities, though the timing is yet certain. With more supportive factors in the making, 2013 should be a good year ahead for us again.”