Thai Union has expressed optimism for a better business environment in FY2025.
Thank you for reading this post, don't forget to subscribe!Seafood giant Thai Union has expressed optimism for a better business environment in FY2025,but has urged continued caution over existing macroeconomic challenges.
Thai Union recently announced its FY2024 full year financial results, reporting a 1.7% year-on-year growth in sales to THB138.4bn (US$4.11bn) and a 7.2% year-on-year increase in net profit to THB5bn (US$148.3mn).
“2024 was a challenging year [due to] global pressures including trade war tensions, the Russia-Ukraine conflict, uncertainty around the US elections and more [but] Thai Union’s Ambient, PetCare, and Value-added businesses demonstrated remarkable resilience,” Thai Union Group CEO Thirapong Chansiri told the floor during the firm’s most recent investors’ meeting.
“This was in the face of weak global economic growth and more cautious spending among consumers around the world; [and moving forward] we expect a better macroeconomic outlook in 2025.
“There is a better outlook due to improved GDP growth in our key regions with easing global monetary policies compared to last year which saw the tighter spending by consumers – such as in Thailand which is expected to grow by 2.9%.
“[However, there are still] key headwinds we need to monitor including US trade policies such as the additional 10% tariff on all imports from China and 25% tariff on all steel and aluminium imports; as well as the ceasefire between Israel and Gaza.
“Overall, we are optimistic that Thai Union will be positioned for long-term, sustainable growth as we pursue our goal of boosting net sales to US$7bn and doubling EBITDA by 2030.”
Thai Union CFO Ludovic Garnier added that this was achieved despite exceptionally challenging freight situations throughout 2024.
“Key logistics market topics throughout the year included the Red Sea situation where many container carriers diverted their vessels away from this area, the three day strike in Gulf of Mexico ports, and container shortages,” he said.
“Thai Union felt the most impact in terms of container shortage, which led to shipment delays and higher freight costs – which we solved via cost-sharing, pricing negotiations, proactive inventory management and other strategies.
“That said, the Thai Baht has appreciated against all key currencies in the past year particularly EUR/THB which dropped by 5.4% year-on-year, and this has also been in our favour.”
Key categories
Thai Union’s Ambient business which comprises mainly its canned and pouched seafood items is its main sales driver at 49.4% of its portfolio, and is the company’s cornerstone category with well-known brands such as Chicken of the Sea and John West.
“Innovations are actively ongoing in this category, such as Chicken of the Sea on-the-go kits made using wild-caught light tuna with McCormick flavours such as Old Bay and Chilli Lime,” he added.
“There is also the new Mackerel in Sweet Thai Chilli Sauce under the King Oscar brand, which introduces royal fillets of skinless, boneless North Atlantic mackerel in a tangy, savoury, sweet and spicy sauce that is expected to appeal to consumers in markets like the United States.
“At the same time, we also have plans to increase the proportion of our high-margin categories PetCare and Value-added from the current 20% of our portfolio to 25% to 30% by 2030.
“Value-added in particular continues to be a high growth potential category for us, as sales from this category rose by 5.2% year-on-year in 2024 and our ready-to-eat business within this category also was ranked number one in frozen fully-fried products across all product categories last year.”
