Record profits for Thai canned seafood giant

Strong sales of its canned seafood products in Europe helped the world-leading packaged fish producer Thai Union Group (TU) to record sales in 2015 of THB125.2 billion (US$3.5 billion), up 3.1 percent year-on-year.

TU is behind such leading brands such as John West, Petit Navire, Mareblu, Chicken of the Sea and Hyancinthe Parmentier.

Acquisitions in the year also added to the higher sales, such as of MerAlliance, the leading chilled smoked salmon producer in Europe; King Oscar, the premium sardine brand; and Orion, the largest lobster supplier in North America. Strong recovery of TU’s Thailand-based shrimp processing operations and successful restructuring of US Pet Nutrition, the US-based pet food producer, also helped the bottom line.

Pre-tax profit was up 4.8 percent at THB11.5bn ($322m), while net profit was a record THB6.1bn ($171m), up 19.1 percent.

TU chief executive Thiraphong Chansiri commented: “This is another great year with record sales and net profit. The 2015 result demonstrates our resilience and ability to grow in spite of a host of challenges faced by Thailand and the global seafood industry.

“Volatile foreign exchange rates, global correction of tuna and shrimp prices, uncertain global economic conditions and sustainability issues faced by Thailand did not discourage us from outperforming the industry. Our top line might be a bit short of the original target, our bottom line has nevertheless more than made up for the shortfall, allowing us to set another record level.”

Canned tuna is TU’s biggest category with 37 percent of the business, followed by shrimp and related business with 29 percent, salmon with 9 percent, pet food 7 percent, and sardine and mackerel 6 percent.

TU said that while there were challenges on the top line growth of the tuna category because of low raw material prices and increased competition, it managed to further improve its profitability from a year ago. A similar development also applied to the shrimp category. Chicken of the Sea’s new lobster business through Orion also established the group’s leading presence in this space in North America. The star categories with both top line and bottom line growth were sardine and mackerel and salmon business, mainly thanks to the acquisitions of King Oscar and MerAlliance since late 2014.

Chansiri added: “We are well positioned for another solid year in 2016. The year is a period which we would reset our base for further growth. A lot of new initiatives are being launched this year, namely our continual drive for innovations in products and production processes, a new focus on serving food service customers and emerging markets, namely the Middle East, South East Asia and China. Therefore, growth will be primarily driven by these endeavours and the full consolidation of Rugen Fisch, which is our latest 51 percent acquisition of the leading seafood producer with own brands in Germany, into the group.”