Catching More Tuna and Lowering Costs
Lifts Thai Union Net Profit and Gross Margin

Thai Union Frozen Products (TUF), the world’s largest canned tuna producer, is looking to make a record net profit this year.

As wealthy regions such as the United States and Europe rebound from the financial crisis, their appetite for Asian frozen seafood is recovering fast, noted TUF President Thiraphong Chansiri. His company, which owns the Chicken of the Sea brand and sells a lot of tuna to Walmart and Costco, expects this year’s profit to exceed last year’s, which was the highest since TUF went public in 1994.

“The seafood market outlook is looking pretty good. We are seeing strong momentum with signs of rising consumption especially in our core US market,” Thiraphong said, adding he was keen for acquisitions after setting up three joint ventures last year in Japan, India and Papua New Guinea. “Sales at supermarkets have been great so far, and we should be able to keep gross margins at around 15%,” he added.

Despite flat sales and one-off, pre-tax expenses from a plant relocation to Georgia, TUF’s 2009 net profit more than doubled to a record high thanks to a good catch that lowered raw material costs. Tuna accounted for 44% of TUF’s sales last year. This year, the company is likely to report a 4.6% rise in net income to 3.5 billion baht ($108 million), according to analysts. “We are more likely to beat it,” Thiraphong said of their estimate.

In Asia, TUF is the largest frozen seafood processor outside of Japan, competing with Charoen Pokphand, Seafresh, GFPT and others.