Thai Union Aims to Double Sales by 2015 With European Expansion

Thai Union Frozen Products Pcl (TUF), Thailand’s biggest seafood exporter, expects sales to almost double by 2015 as it expands in Europe following last year’s acquisition of MW Brands Holdings SAS.

Sales may surge to $4 billion in 2015 from $2.27 billion last year, President Thiraphong Chansiri said in an interview at Thai Union’s headquarters in Bangkok today. MW Brands, the Paris-based canner of John West and Petit Navire tuna, plans to expand to more European countries besides its major markets of the U.K., Italy and France, he said.

Thai Union, which produces Chicken of the Sea brand seafood in the U.S., is betting on MW Brands to spearhead its expansion in Europe, where import tariffs are high. The company also aims to increase tuna demand among Asian consumers whose consumption of the fish is still low compared with the U.S. and Europe, Thiraphong said.

“MW Brands provides the great springboard to boost sales in Europe where our penetration has been hampered by high taxes,” he said. “Much harder work must be made in the Asian markets for our tuna product, which is perceived as Western food.”

Thai Union expects to earn about 70 percent of its sales from the U.S. and Europe after the integration of MW Brands, which it bought last year for 680 million euros ($944 million), Thiraphong said.

Earnings Rebound

Profit may increase by at least 30 percent this year, boosted by MW Brands and higher seafood prices, Thiraphong said. Net income dropped 14 percent in 2010, the first decrease in three years, to 2.87 billion baht ($94.7 million) as a surge in shrimp prices boosted raw-material costs.

“The company’s shrimp business has returned to normal situation after its worst year ever in 2010,” Thiraphong said. “We have raised the selling prices of shrimp products to pass on the cost after all of the buying contracts with customers expired.”

Thai Union plans to limit its dividend payment and capital expenditure over the next five years to reduce its debt-to- equity ratio to 1 from the current level of 1.6, he said. Dividend payment will be capped at a maximum of 1.2 billion baht a year and annual capital spending limited to 3 billion baht.

Long-term debt jumped more than fivefold to 30.6 billion baht in 2010 from 5.4 billion baht in 2009, as the company borrowed to fund the purchase of MW Brands, according to data compiled by Bloomberg.

-- Editors: Chua Kong Ho, Vipin V. Nair

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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Photographer: Dario Pignatelli/Bloomberg

Thai Union Frozen Products President Thiraphong Chansiri in an interview at the company's headquarters in Bangkok.

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Photographer: Dario Pignatelli/Bloomberg

Thai Union Frozen Products President Thiraphong Chansiri in an interview at the company's headquarters in Bangkok. Close

Thai Union Frozen Products President Thiraphong Chansiri in an interview at the company's headquarters in Bangkok.

Photographer: Dario Pignatelli/Bloomberg

Thai Union Frozen Products President Thiraphong Chansiri in Bangkok. Close

Thai Union Frozen Products President Thiraphong Chansiri in Bangkok.

Photographer: Dario Pignatelli/Bloomberg

Cans of Mareblu, WeightWatchers and John West tuna produced by Thai Union Frozen Products. Close

Cans of Mareblu, WeightWatchers and John West tuna produced by Thai Union Frozen Products.

Photographer: Dario Pignatelli/Bloomberg

Chicken of the Sea canned fish products produced by Thai Union Frozen Products. Close

Chicken of the Sea canned fish products produced by Thai Union Frozen Products.

Source: Thai Union Frozen Products Pcl via Bloomberg

The tuna production line at Thai Union Frozen Products Pcl's TUF factory in Samutsakorn, Thailand. Close

The tuna production line at Thai Union Frozen Products Pcl's TUF factory in Samutsakorn, Thailand.

Source: Thai Union Frozen Products Pcl via Bloomberg

The tuna production line at Thai Union Frozen Products Pcl's TUF factory in Samutsakorn, Thailand. Close

The tuna production line at Thai Union Frozen Products Pcl's TUF factory in Samutsakorn, Thailand.

Source: Thai Union Frozen Products Pcl via Bloomberg

Workers on the tuna production line at Thai Union Frozen Products Pcl's TUF factory in Samutsakorn, Thailand. Close

Workers on the tuna production line at Thai Union Frozen Products Pcl's TUF factory in Samutsakorn, Thailand.

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