Mr Thiraphong says he expects this year’s profit growth rate to exceed revenue growth.
SET-listed global seafood company Thai Union Group (TU) is set to increase capital spending to 6 billion baht next year, more than its average of 4 billion to 4.5 billion , to respond to the recovery in foreign demand.
Thiraphong Chansiri, president and CEO of TU, said that in 2022, the company is planning new investments of 5-6 billion baht, including potential projects focusing on alternative proteins, functional foods and new technologies. for startups to stimulate innovation.
The company’s venture capital fund stands at $ 30 million.
The fund has allocated up to $ 10 million for investment projects so far.
According to Thiraphong, TU has also set up a new business unit to directly oversee plant protein as an alternative food for environmentally conscious customers.
The company manufactures plant protein products for original equipment manufacturers and exports to more than 10 countries, including the United States and several in Europe.
“Customers want to buy healthy food and focus on food safety and the credibility of manufacturers,” he said.
“Consumer behavior has shifted towards cooking at home and shopping online. Thai Union businesses are ready to serve all channels including foodservice, restaurants and online channels. “
However, export-oriented production still faces hurdles such as container shortages, tight shipping space and labor shortage, Thiraphong said.
He said the company is investing around 5 billion baht this year, mainly in a new factory making food ingredients such as protein hydrolyzate and collagen peptide, construction of which is expected to be completed next year.
Another project involves cold storage facilities in Ghana with a capacity of 8,000 tonnes.
In March, the company established a new subsidiary, Thai Union Lifescience Co, with an initial share capital of 300 million baht.
The new company is focused on the manufacture, trade, distribution and development of supplements, health products and biotechnology products.
Thai Union Lifescience is expected to launch Zeavita, its new brand of supplements, in September.
The focus is initially on three products – collagen, calcium and tuna oil – in an exclusive partnership with Watsons and top independent pharmacies, with online sales being another channel.
Mr Thiraphong said the company expects higher revenue growth for the second year in a row, driven by rising global demand, the weakening baht and the successful diversification of business into supplements and protein. vegetable.
During the protracted pandemic, TU did quite well in frozen seafood, pet care and value-added businesses as well as chilled seafood, he said.
“It is fortunate that our companies performed well in the first half of the year due to the growing demand for the reopening of many countries and the activities of our major trading partners, especially the United States and Europe, which represent together 90% of our export revenue. “said Mr. Thiraphong.
“More importantly, the company can operate factories as usual even with severe infections in the country.”
He said the company is forecasting 5% revenue growth this year after posting a 4.4% increase in 2020.
Last year, TU reported sales of 134 billion baht, up from 128 billion in 2019, 135 billion in 2018 and 139 billion in 2017.
Last year was the first time the company posted a net profit of more than 6 billion baht, recording 6.25 billion, up 64% from the previous year.
Excluding US antitrust litigation costs in 2019, 2020 net income continues to grow 20% year-over-year on a normalized basis.
Mr Thiraphong said he expects this year’s profit growth to outpace revenue growth, driven by rising purchase orders.
He said import orders from buyers around the world have flooded Thailand given the credibility of Thai production and confidence in food security.
The decline of the baht to over 33 baht against the US dollar is also benefiting Thai export earnings, Thiraphong said.
In the first half of 2021, the company said sales rose 4.4 percent to 67 billion baht, with net profit up 51.7 percent to 4.1 billion.
“Diversification in terms of markets, product categories and revenue sources is a key factor in our strong performance this quarter, and we continue to focus on profitability, financial discipline and new value-added businesses.” did he declare.