Thai Union ‘never faced such challenges’ in over 25 years November 12, 2013, 9:26 am Thai Union Frozen Products’ third quarter profit gave reason for optimism after two of the hardest quarters the Thai firm has faced, said its president, adding the lowest point has been passed. “We have been operating our business for over 25 years, never before have we faced with such unprecedented challenges,” said Thiraphong Chansiri, president of Thai Union. “This is the first time the company was challenged with difficulties of this scale. EMS [early mortality syndrome] in shrimp and fluctuated tuna prices greatly affected the company’s performance in the first two quarters,” said Chansiri. The tuna and shrimp processor saw its net profit in the third quarter of the year drop 37.7% year-on-year, or $18.9 million, to THB 1 billion ($31.6m), despite higher sales. This, however, was better than expected and was a 180% improvement from the second quarter, when its net profit had tumbled to THB 398m. Chansiri said the lowest point appears to have been passed. “This year the company has seen fluctuations in many aspects of its business, largely due to external factors. However, it believes it has passed the lowest point.” The third quarter “has shown more improved performance than ever expected”, said the president. The executive attributed the better performance to higher efficiency, which it achieved by optimizing production and operation management. He also noted the role of product innovation. “The innovation front is run by both local and international teams with impressive outcome of their contributions with the gross margin increased by 14%, up from 12% in the last quarter.” Commenting on the months ahead, Chansiri said the company expects to benefit from more stable tuna prices. Regarding shrimp it said, “The issue regarding shrimp raw materials has been improving from the first half of this year due to shrimp farmers’ ability to prevent juvenile shrimps from EMS. Nevertheless, the company is closely monitoring the EMS.” With no cure in sight, management practices are so far the only tool at hand for farmers to prevent or manage EMS. The situation, especially in Thailand, is one of despair. “It’s a disaster,” Jim Gulkin, director and founder of Southeast Asian exporter Siam Canadian, told Undercurrent News during the China Fisheries & Seafood Expo in early November. In China, there is no coordinated effort to tackle the issue, while in Thailand, he said, producers are no closer to a solution. “There is no light at the end of the tunnel. We are nowhere near where we thought we would be [in terms of forecasts].” Thailand is now expected to drop to 240,000 to 270,000 metric tons this year, down from more than 500,000t in 2012. Tuna and shrimp make up for 49% and 24% of Thai Union’s revenues, respectively, with sardine and mackerel accounting for another 6%. The US and the EU are its biggest markets, generating 40% and 30% of sales, respectively.
Posted on: Tue, 12 Nov 2013 11:11:16 +0000
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