Thai Union lowers budget, targets 15% rise in revenue

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Thai Union lowers budget, targets 15% rise in revenue

By SOMLUCK SRIMALEE
THE NATION

 

THAI UNION GROUP targets 15-per-cent revenue growth to Bt150 billion this year as the investments it made in 2016 are consolidated.

 

The company has also set aside a budget of no more than Bt25 billion for new investments and mergers and acquisitions this year, depending on business opportunities, a TU executive said yesterday. 

 

Rittirong Boonmechote, president of the company’s global frozen and related products unit, made the remarks after a press conference to introduce its new frozen-food brand Qfresh.

 

The company’s investments in 2017 will be lower than last year’s approximately Bt25 billion, because the group has to manage its 2016 investments to generate earnings, he said.

 

“We have to maintain our debt-to-equity ratio at no more than 2:1. Currently the ratio is 1.3:1, which leaves us room to keep investing,” he said.

 

Yesterday, the group signed a loan agreement worth US$50 million (Bt1.73 billion) with HSBC Thailand. 

 

The funds will be used to continue Thai Union’s international expansion.

 

Rittirong said the trade policy of the United States, which announced that Thailand was one of 16 countries with trade surpluses with the US, will have little impact on TU’s business this year because the group has its own frozen-food production facility inside that country.

 

If the US hits Thailand with other trade barriers, TU may export from its other plants in third countries unaffected by such measures.

 

The United States is the No 1 market for TU’s frozen-food exports, accounting for about 50 per cent of total export value. 

 

Should the US announce measure that could have an impact on its business. 

 

Rittirong said, the company has ways to solve such problems, especially expanding sales from its plant in the US to replace the products it currently exports there.

 

“Our business strategy is to expand our portfolio overseas to balance our business when facing trade measures,” he said.

 

Last year, Thai Union Group reported revenue of Bt134 billion, up 7.3 per cent from 2015, and net profit of Bt5.25 billion, down by 0.94 per cent.

 

Currently, TU has 17 plants in 13 countries: France, Ghana, Poland, Portugal, Papua New Guinea, Seychelles, Scotland, Vietnam, India, China, Dubai, Norway and the US.

 

The group now owns several brands both in Thailand and overseas, such as Select, Chicken of the Sea, and King Oscar.

 

This year, the group is launching a new brand for frozen seafood products, Qfresh. 

 

It has a marketing budget of Bt50 million aimed at first-year sales of Bt300 million from the new brand.

 

Qfresh 

 

The group also targets Qfresh sales reaching Bt1 billion within five years, with average annual growth of 20 per cent.

 

“We see strong demand for frozen seafood in Thailand, with estimated total market value of about Bt20 billion a year. As a result we decided to launch our own brand to [cash in on] the demand in the market,” Rittirong said.

 

Qfresh will also be available for customers in Greater Bangkok to purchase online for delivery to their homes. 

 

Delivery is free for purchases over Bt500; otherwise the delivery fee is Bt100.

 

“We target 80 per cent of Qfresh sales from the offline market, and the rest online,” he said.

 

Source: http://www.nationmultimedia.com/news/business/corporate/30311658

 

 

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