Thai Union will sell its stake in a joint venture operating in fish and seafood in the Middle East, the Thai company said in a statement on 22 February.
The Bangkok, Thailand-based company had previously established a partnership with Savola Foods, a food and retail company based in Saudi Arabia, to do business in the seafood retail sector in the Middle East, called the SIC Group.
The SIC Group is comprised of entities SIC1 and SIC2, and Thai Union holds 50 percent of shares in SIC2, which owns 80 percent of a second entity called SIC1. The company also holds 10 percent of shares directly in SIC1.
According to Thai Union, the decision to walk away from the joint venture with Savola Foods was made because the partnership “has not delivered as per expectations over the last years.”
The shares in SIC2 and SIC1 will be bought by Favola Foods and Afia Arab Food, which has links to Favola Foods, Thai Union said. The value of the transactions was not disclosed.
Thai Union’s exit from the retail joint venture in the Middle East comes as its share of losses from its investment in associates rose last year, reaching THB 189 million (USD 6.3 million, EUR 5.2 million) in the fourth quarter, compared with a loss of THB 66 million (USD 2.2 million, EUR 1.8 million) a year earlier. The losses were attributed mostly to difficulties in the restaurant business faced by affiliate Red Lobster during the COVID-19 pandemic.
Thai Union’s share of losses from its investment in associates last year widened to THB 527 million (USD 17.5 million, EUR 14.5 million) “largely due to Red Lobster, from lockdown restrictions that limit numbers of operating dining hall and capacity at the restaurants, in contrast to a 2019 share of profit of THB 591 million [USD 19.7 million, EUR 16.2 million],” it said.
