Thai Union Group has reported record high revenue of THB 36.3 billion for the first quarter of 2022. The 16.5 percent increase over the same period a year earlier was driven by a favorable foreign exchange environment and continuing robust global demand as business in many countries is returning to normalcy as restrictions and preventative measures related to the coronavirus pandemic measures have been eased or lifted.
Cost containment and ongoing consumer trust and demand for the Bangkok-headquartered company’s range of seafood products sold across Asia, Europe and North America resulted in a 15.4 percent increase in gross profit to THB 6.4 billion year-on-year. But, as a result of ongoing headwinds due to inflationary pressures as well as increased supply chain and global logistic constraints, Thai Union’s net profit decreased 3.2 percent to THB 1.7 billion.
“While we face persistent challenges, I am pleased that we were able to deliver a strong quarterly result and top line growth across our three core business units. Thai Union also continues to prioritize the health, well being and safety of its employees in light of the ongoing pandemic and Omicron variant, by enforcing strict Covid-19 preventive measures. This has allowed us to continue to manage our global production network well, and to deliver safe, quality, nutritious food products to consumers around the world,” said Thiraphong Chansiri (pictured above), the company’s chairman, president and chief executive officer.
Solid global demand was reflected in higher sales across all business segments, with receipts for ambient seafood growing 14.3 percent to THB 15.5 billion during the quarter, supported by both stronger sales volumes, a favorable foreign exchange environment, and an increase in selling prices.
The frozen and chilled seafood business reported a 14.2 percent rise in sales to THB 13.8 billion, driven by continued strong demand, particularly of shrimp products in Asia, and the recovery of the foodservice sector in the USA and Europe as well as a favorable foreign exchange environment. The company has also utilized automation to improve production efficiency and manage cost per unit.
PetCare, value-added and other businesses, continued to play a significant part in Thai Union’s growth in Q1, with sales jumping 27.2 percent to THB 7.0 billion.
During the first quarter, the company continued to expand its business in various markets and sectors, including establishing a joint-venture enterprise – RBS-TU Food Ingredients Private Limited – with R&B Food Supply Public Company Limited (RBF) and Srinivasa Cystine Private Limited (SCPL), an associate of Avanti Group, to provide high-quality food ingredients to the Indian market.
Thai Union also took steps to better manage its supply chain over the quarter, through the launch of a new joint venture with Pacific Cold Storage Co., Ltd., a subsidiary of JWD InfoLogistics Public Company Limited. The new company, Pacific TUM Cold Storage Co., Ltd., will build a refrigerated warehouse in Thailand’s Samut Sakhon province to handle Thai Union’s growing raw materials.
“But, while we will continue to focus on opportunities, challenges remain, including the ongoing impact from Omicron, and continued headwinds due to increased supply chain and global logistic constraints as well as inflationary pressures,” Chansiri said. “But business diversification remains a key strategy for us as we continue to invest and expand our business into high-margin areas where we can use innovation to create greater value, and optimize materials processed in our plants. With a focus on health and wellbeing across our Group’s portfolio, we will strengthen the growth and profitability of our core businesses and expand into new, attractive areas to support our commitment to Healthy Living, Healthy Oceans.”
Board Room Changes
Thiraphong Chansiri assumed the company’s chairmanship on May 9, following the resignation of former Chairman Kraisorn Chansiri and Executive Director of the Board Chuan Tangchansiri several weeks ago. [See link to related story published on April 19: https://www.frozenfoodsbiz.com/thai-union-chairman-and-director-resign-over-insider-trading-claim/]
Among other executive changes was the appointment of Kirati Assakul as an independent director to be the vice chairman of the board and lead independent director to balance the power between the board and the management, according to the principles of good corporate governance.
Additionally, Nakorn Niruttinanon was named as a director to replace Chuan Tangchansiri, and the company is seeking
a candidate to be nominated as director to replace Kraisorn Chansiri and present to the Board for further approval and inform to the Stock Exchange of Thailand accordingly.