By ACHARA PONGVUTITHAM
“We cannot say when we will get the new brands, as negotiations for any deals are not easy to complete in detail. It is still in the process, so it is hard to tell you how many brands will be acquired this year or next,” said Thiraphong Chansiri, president of the company.
In the EU market, the company has concentrated on canned seafood and is looking for more brands. TUF currently only has brands with good access to five of the EU’s 27 member states, and it is looking at Scandinavia, Germany, Benelux, and Eastern Europe as focuses for expansion. Outside Europe, North Africa and the Middle East are also in the company’s sights.
However, new investment in the US has declined, as the company has already set up businesses there for production of canned and frozen seafood and pet food.
To serve the coming Asean Economic Community, the company will penetrate more markets in Vietnam, Laos and Cambodia.
“It is the busiest year for me, as I have to fly to many European countries every month to explore business opportunities,” Thiraphong said. “Currently, 50 per cent of my life is spent abroad both in the US and the European Union, where TUF’s businesses have been established and still create high returns for the company.”
TUF’s international brands include US brand Chicken of the Sea, while John West, Petit Navire, Parmentier and Mareblu came under its umbrella after completion of the acquisition of MW Brand last year to be marketed in the United Kingdom, Ireland, Italy and France. In addition, the company manages leading tuna-products brand Select, fish products under the Fisho brand, and Bellotta pet food for the domestic market.
Mergers and acquisitions are still the company’s key strategy for business expansion.
As one of the leading global seafood companies, TUF’s strategic business has been classified into six core product groups: tuna, shrimp, pet food, sardines, salmon, and ready meals.
The tuna business holds the major share of the group’s production, accounting for 45-50 per cent, followed by shrimp at 20 per cent, pet food at 7 per cent, sardines at 5 per cent, salmon at 4 per cent and ready meals for the rest.
Thiraphong noted that these six core businesses would be the company’s main drivers to achieve total sales of US$5 billion (about Bt470 billion) by 2015 and $8 billion by 2020.
TUF posted Bt2.47 billion in net profit in the first half of this year, up by 21 per cent year-on-year, despite the slowing European and US economies. The slowdowns have not affected the company’s financial results, as food is a basic necessity. On the other hand, consumption of tuna should increase amid tough economic times.
TUF’s new investments will be introduced by 2015 or earlier, depending on how the negotiations progress.
Thiraphong said the euro-zone crisis was an opportunity for TUF, as many European companies had weakened in line with the regional economy. This creates more acquisition opportunities together with a stronger baht, which lowers the company’s M&A costs.
“TUF wants to buy such companies but it should be the right time for those targeted firms also, as they want to sell out,” he said.
TUF is also positioning itself as a regional brand for tuna products while as the group as a whole aims to become a global brand.
“We don’t want to design ourselves as a single-brand operator. That is why we concentrate on acquiring [existing] brands for business expansion in the future. Look at Heineken’s operation – it manages about 100 local brands,” Thiraphong said.