Thai Union Frozen Products (TUF) on Wednesday announced that it has agreed to acquire a 40 percent stake in Pakfood Public Co. Ltd. (PCC) through a tender offer.
One of Thailand’s leading frozen seafood processors and exporters, Pakfood’s main products are frozen shrimp, pasteurized crab meat and ready-to-eat meals, and its T Time brand of value-added food products, namely dim sum, is marketed domestically. In the first nine months of 2011, the company had sales of THB 4.98 billion, operating income of THB 270 million and net profit of THB 112 million. As of 30 September, its total assets amounted to THB 3.3 billion.
Pakfood’s main export markets are the United States, European Union and Japan.
According to Thai Union, the merger should allow for more efficient raw material sourcing, improved management of manufacturing capacities and more joint marketing efforts to expand its local and overseas markets, particularly the U.S. and the EU, where growth opportunities are plentiful. It should also lead to more business opportunities, as Thai Union can offer a greater variety of products to serve its customers’ needs.
With the merger, Thai Union will now procure almost 20 percent of annual Thai shrimp output. And, as the local labor supply continues to tighten, Thai Union will be able to better optimize its processing plant capacity without unnecessary expansion.
“We expect better supply chain management that should create more cost savings and further improve profitability for both firms,” said Thai Union in a press release.
“We are generally optimistic about the outlook of frozen seafood business, particularly shrimp. With the respective extensive market reach of TUF and PPC, this strengthened relationship should allow more exchange of market intelligence and make possible more strategic moves or expansion together in the U.S. and EU markets.”
