Thai Union seeks mergers, acquisitions
Thai Union Group, the parent company of Chicken of the Sea, John West, and other major seafood brands, is looking for merger and acquisition opportunities.
In addition, the major global supplier will spend up to THB 4 billion (USD 123 million, EUR 104 million) a year to renovate its plants, said Thai Union CEO Thiraphong Chansiri during the company’s recent 40th anniversary exhibition in Bangkok, Thailand.
“We cannot say at this time what will happen regarding merger and acquisition deals in the future. However, we have enough funds available for investment if a deal opportunity arises,” Chansiri said at the event, according to an article appearing in The Nation.
Chansiri said that Thai Union could consider a merger or acquisition of up to USD 1 billion (EUR 847 million).
The company also plans to outlay an annual average of THB 300 million (USD 9.2 million, EUR 7.8 million) on research and development from 2018 through 2020. By 2020, innovation will play a bigger role in Thai Union’s business and is expected to contribute 10 percent of the company’s total sales projected at US 8 billion (EUR 6.7 billion), said Tunyawat Kasemsuwan, global innovation director at Thai Union, in a statement from the company.
Thai Union’s THB 900 million (USD 27.6 million, EUR 23.4 million) investment in its Global Innovation Incubator (Gii) in 2015 has led to the development of several innovative products, including patented sliceable tuna, which gives consumers “fresh, natural tuna in a great tasting and convenient format,” Thai Union said. The Gii has also worked at enhancing processing for tuna sausage, creating a nutritious sausage with only one percent fat.
“Both food products are 100 percent natural, and are currently in the market introduction stage, and receiving a very strong reception from customers around the world,” Thai Union said.
The Gii is also developing marine ingredients that maximize use of raw materials to create human nutrient ingredients, such as nutraceuticals from highly refined tuna oil with Omega 3 DHA.
“We’re very committed to invest in innovation, as it will help us deliver what consumers want now and what they will want, and need, in the future,” Chansiri said.
However, not all of Thai Union’s news is positive. Because of rising production costs and global currency fluctuations, the company’s revenue growth will be below two percent this year and gross margin will be lower than 14 percent.
“We hope to boost our gross margin to 17 percent next year and 20 percent in 2020,” Chansiri said in The Nation.