Thai Wah food products group lists on Thai bourse
THAI WAH yesterday listed on the Stock Exchange of Thailand after Thai Wah Starch merged with Thai Wah Food Products with the aim to grow annually in the "higher single digits" over the next three years.
“We have more than Bt1 billion in cash for Thai Wah group after the merger. We plan to phase it out systemically via investment over three years in core categories related to our business such as starch-related products.
“And it has to be in good growth areas such as the Asean region,” said Ho Ren Hua, chief executive officer of Thai Wah.
Thai Wah Starch was one of the leading tapioca product manufacturers and exporters and Thai Wah Food Products was the country’s biggest vermicelli producer, so Thai Wah’s business is now going to be 77:33 starch and vermicelli.
Research and development and plant expansion are going to be the focuses of Thai Wah’s investment in the next three years.
“We are looking at specific opportunities to acquire assets with potential in Cambodia.
“We are looking to developing a factory in Vietnam, and we are speaking to some people in Laos regarding the possibility of doing some partnerships there.
“So there are a lot of different partnerships under way, and within six to 12 months, Thai Wah will develop a very clear Asean Economic Community strategy,” he said.
By next year, Thai Wah will have a “concrete breakthrough in Vietnam, Cambodia and Laos”.
Thailand will remain a “very good hub for the AEC” because of its proximity and access to the borders of the CLMV countries (Cambodia, Laos, Myanmar and Vietnam).
The Kingdom will always be Thai Wah’s home and the company aims to “truly be a regional leader within five years”, Ho said.
Open to M&A
Thai Wah is still open to mergers and acquisitions in the region if the match is right.
“Thai Wah Starch and Thai Wah Food came together because of their legacy. The management teams knew each other and had the same cause.
“We will only do M&A for the right reason. What is more important is the investment strategy, which is to invest in things that are related to our businesses and in areas with high economic growth,” he told The Nation.
Thai Wah expects annual growth of about 5-8 per cent in the gross domestic products of Cambodia, Vietnam and Myanmar over the next three years.
Thai Wah’s revenue in the second half is expected to be in line with the Bt2.79 billion it made in the first six months of the year.
Its net profit is expected to be around the usual Bt500 billion per year. Thai Wah earned net profit of Bt471 million on sales of Bt5.397 billion last year.
The company is not worried about the global economic slowdown since its products are food-related and demand remains stable from last year.
“We are still confident because global food consumption is still generally above global GDP growth,” Ho said.
“We are confident of close to [high-single-digit] growth because food consumption has remained steady and strong and our products go to the core of daily life. For example, daily products, various sauces, meat products and instant noodles.
“We are also diversified across Asia. We are very strong in Thailand. But for our starch products, we export to China, which still expects growth of about 6-7 per cent.
“So we are very realistic about the global outlook. But we are also confident in our category and our focus. Food consumption is generally very strong and very consistent.”
