Thai Union er et av verdens største sjømatselskaper. Under finner du et intervju der deres toppsjef. Intervjuet ble først publisert på intrafish.com 7. mars, og er under gjengitt i sin helhet (på engelsk).

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In February, Thai Union posted yet another solid financial year, seeing record sales for the seventh straight year. But the year was not without challenges -- and the Thai seafood giant is looking at another testing year ahead.

IntraFish talked to the group's CEO and President Thiraphong Chansiri about what to expect.

Thai Union just recently published its 2016 financials. How content were you with the results?

Regarding our 2016 results, the top line growth was at approximately 7 percent. I believe the revenue growth during the year was okay given the market conditions. But bottom line profit was flat compared to a year ago, therefore 2016 was not a strong year for us. Even though we made a few acquisitions during the last year, the net profit remained the same.

The weak Thai baht in 2016 mainly contributed to our issues in the salmon business in Europe due to the high cost for salmon, especially from Norway. Besides the salmon business, our other parts of the business, including tuna and shrimp, saw an impact due to the volatility of the raw material market, especially during the last quarter.

Looking ahead, what will be the most important developments this year?

For 2017 we have a very clear plan. No.1 is to bring our salmon business back to break even. Secondly, we want to turn around our Chicken of the Sea business in the US. We want it to be among the three strongest brands, with a consistent performance going forward.

Last but not least, we want to make sure that our core businesses -- including salmon, tuna and shrimp -- are performing at their normal level. These are the top priorities that we will manage in 2017.

What's the outlook for raw material pricing for the year of Thai Union's core species?

Our view for 2017 is that the raw material prices in general for our main species will remain at a high level for at least another year, including tuna and including salmon. Even though pricing softened a little bit during the last few weeks, we believe it will remain at the high end in 2017. It's the responsibility of the management to manage our business under these circumstances.

Analysts recently suggested negotiations with buyers will be Thai Union's biggest challenge this year. Would you agree?

With the high raw material prices, our profitability also depends on our ability to pass on these costs to the market. That's definitely a key challenge for us. At the same time, we have to focus on managing our cost, making sure that we improve our production efficiency, that we focus on cost-saving and try to stay competitive.

In 2017, there are also many other unpredictable factors, including for example Brexit. We have a weak British pound, a weak euro and a weak Japanese yen. It will be very important for us in 2017 how we manage all those elements.

Do you expect any impacts from the Trump presidency for Thai seafood processors such as Thai Union?

I think it's still too early to speculate what is going to happen. We have watched the situation closely and we will try to adapt to whatever changes might emerge. Some news that might be beneficial for us is the potential reduction of the corporate tax in the US. We have quite significant investments in the US, so that could be positive for us.

Thai Union recently set up a trading arm in China. How do you rate the country’s potential for your group’s future growth?

The company was newly established in 2016, so it's quite new for us. We have developed a new go-to-market strategy. In the past we have only offered it to the market but today our daughter is handling it, including frozen seafood. We therefore are offering more products, including frozen shrimp, lobster, crab meat into the China market. We believe there is a big opportunity in that market but we need learn more about it because it's a highly competitive market as well.

In which markets do you see the biggest growth potential for Thai Union?

Since 2015 we have established new global business units, including global foodservice. We see a big untapped potential in this channel. Another business unit is the so-called emerging markets, which includes mainly China and southeast Asia.

These are the two areas that are new to our group and we have high hopes that these two business units can significantly contribute to our future success.

Last year, US seafood chain Red Lobster was added to Thai Union’s portfolio. What are you plans with the company?

We're currently a minority shareholder in Red Lobster, with an equity shareholding of 25 percent in the company. This is a completely new business. In the immediate future we want to learn more about the business operation. But we also see the opportunity in international markets. Red Lobster has not really put that much effort into this and hope that as an Asian company we should be able to help Red Lobster explore the opportunity in Asia even more.

Do you plan further M&A deals this year or are you planning on growing organically?

In 2017, M&As will not be our priority. I think we have made sufficient acquisitions over the last two years. We will more focus on the integration and on improving the performance of some of the investments we have made.

Last year there were reports Thai Union was interesting acquiring Nirsa in Ecuador. Was there any basis to this? Is Latin American a target market for you?

As a publicly traded company we cannot comment on any speculative stories. What I can tell you is that Latin America has always been part of the market we have interests in because we don't have any presence there. It is a very important region and we certainly are looking at it and if there is the opportunity we hope we can expand more into this region. But at this moment we cannot say much as we don't have a particular plan in place.

Given the recent controversy surrounding John West and its delisting in a major UK supermarket, what strategy do you have in place to fix this and make John West stick to its commitments?

In our Sea Change strategy we have made a commitment that we want that 100 percent of our tuna business is sustainable. Sustainable means either MSC [Marine Stewardship Council]-certified or under a fishery improvement project [FIP]. That's our commitment. We have a clear plan to have 75 percent of our branded tuna to be certified under a sustainability program.

Recently highlighted problems of human trafficking and slavery linked to fishing and shrimp farming in Thailand have resulted in a new focus on social responsibility. How do you rate country’s progress in tackling the issues?

These sustainability issues are very important topics and Thai Union takes it very seriously. We have done a lot of work together with the other stakeholders, including our customers and NGOs. I think we have made a lot of positive progress over the last two to three years. But having said that, to me sustainability is a journey. We are committed to do whatever possible we can under our capacities to make positive changes in the industry.

We focus on two areas: The first one is on the fishing side and the other one is on the labor practice side. On the fishing side, especially the fishing industry in Thailand, we have worked closely with our peers in the industry and the Royal Thai Government to develop traceable processes with modern equipment.

This way we can trace our raw material to the origin more effectively. We're also trying to improve it from paperwork to a more digital form.

On the labor practice side, I think we have developed a very clear policy guideline and our commitment on eradicating labor abuses should ensure that not only within our organization but including all the suppliers in our supply chain will abide by that policy. Anybody who is going to work with Thai Union needs to follow this policy strictly.

Are you seeing more pressure by international customers to tackle these issues?

We don't see it as pressure, we see it as an opportunity to do the right thing for the industry. At Thai Union we see it as an opportunity to show our leadership and to create positive change. We want to do the right thing and we believe we need to lead the industry to the right direction.

What role did buyers’ price pressure and market competition play in creating an industry tainted by slave labor?

The point is that this issue requires collaboration from every part of the industry, not only on the supplier side but also from the buyers' part, including customers and consumer. We have to make sure that we are on the same level-playing field. We cannot produce cheap products in the long run. I think we need to be competitive but under the right approach, complying with regulation and the policy we have made. As the leader we have to really believe in it and take the lead. I'm sure we might suffer a little bit but at the end, if we can change our current industry, this is going to be for everybody's benefit.

Are US and European retail and foodservice customers prepared to pay higher prices for products, which guarantee a ‘clean’ supply chain?

I don't want to say higher prices. I think people are willing to pay at the right cost. What's the right cost? I think it's the cost for the right labor practices, the right aquaculture practices, the right fishing practice -- it's a combination. I see a great collaboration within the industry, including the customer. We can see that on the tuna side we have ISSF [International Seafood Sustainability Foundation] as the main platform for our stakeholders. On the shrimp side, we have the Shrimp Passport, which was established by a number of important customers in the market in the US and Europe together with producers in Thailand to develop and improve the traceability and the practices at the farms.

Where do you want to see Thai Union in five years' time?

It's very clear that we want to achieve our 2020 target of $8 billion [€7.5 billion] in revenue. Besides that, our vision and mission is to be the most trusted seafood company in the world. That's what we're aiming to achieve by 2020.

Nyheter

- Oppkjøp ikke et prioritert område i 2017