Thai Union Frozen Products (TUF) expects to break last year's record profit and sales of frozen and canned seafood by squeezing greater synergy out of its group companies. Targets for efficiency improvement are TUF's operations in the US, its largest market with 49 per cent of sales.
Last October, TUF relocated its American Samoan plant to Georgia to improve inventory and transportation management. It merged two US companies: Tri-Union Frozen Foods and Empress International.
The company achieved revenue of Bt69.7 billion for a net profit of Bt3.34 billion last year, up from revenue of Bt69.52 billion for a net profit of Bt2.2 billion in 2008.
President Thiraphong Chansiri yesterday said the record net profit came from effective management and cost-control measures, as well as outstanding operating results in foreign subsidiaries.
Last year was a year of group restructuring, which helped the company hit a new high in profit. This year is the year of sustained growth in profit and sales.
TUF plans to increase its net profit 15-20 per cent and sales 12 per cent this year in US-dollar terms.
Also this year, the company will open a Bt2-billion cold storage facility with a capacity of 40,000 tonnes and is looking for merger-and-acquisition opportunities.
"We have enough cash flow and a lower debt-to-equity ratio at 0.7. We can allocate US$200 million [Bt6.64 billion] for investment in the future. That investment budget will come from our own cash and financial institutions," Thiraphong said.
The strengthening of the baht and fluctuations in raw-material prices are risk factors for TUF, which caused sales to drop 3 per cent last year in dollar terms.
However, the Bank of Thailand's monetary policy has instilled confidence in local exporters and TUF that the baht will remain in the range of 33-34 to the dollar this year.
Thiraphong said the economic crisis in Europe and the uncertainty of the US economy did not affect TUF or the food industry last year, because people must consume food. The record results for the company guaranteed that food producers could maintain their growth rate.
This year's expected high net profit will allow the company to pay a higher dividend than last year's Bt1, he added.
