SET-listed Thai Union Frozen Products Plc (TUF), the world's largest canned tuna and seafood producer and exporter, anticipates only slight improvement in its second-half exports, in line with the marginal recovery of the global economy and with the labour issue a long-term challenge.
First-half exports contracted by 1% year-on-year due mainly to the sluggish world economy, president and chief executive Thiraphong Chansiri.
"The overall economy in the second half is likely to be along the same lines as exports since Thailand relies a lot on them," said Mr Thiraphong, adding it would take time for the EU and US economies to see a substantial recovery.
He pointed out that the domestic economy was hit hard since late last year from the political impasse.
Mr Thirapong said TUF was unaffected by the slowing economy, and despite its main revenue coming from international markets, the company has performed well against overall exports.
However, he voiced concern that the country being moved down to the third tier by the US recently following reports in the foreign media on the mistreatment of migrant workers in the Thai fisheries industry could pose a long-term threat to Thailand's exports.
"We don't expect any effect in the short term even if the US decides to cut the Generalized System of Preferences, which would result in higher costs for exporters. But in the long term we'll be affected, as the labour issue will definitely damage Thailand's image if we cannot address this problem," said Mr Thiraphong.
Both the private sector and the government must address the issue seriously, he added.
Thein Naing, labour affairs counsellor at the Myanmar embassy, said his government had acknowledged the situation of its workers in Thailand and was closely monitoring whether the problem is being properly tackled.
"We've been discussing the issue with the Thai government. We are ready to cooperate in order to solve the issue, and we hope to improve the conditions for our 3 million workers in Thailand," he said.
TUF yesterday officially opened its childcare centre for its workers.
On the business side, the company reported a strong performance in the first half of this year, with a net profit of 2.47 billion baht, up by 139% year-on-year.
Tuna accounted for nearly half of the revenue of US$3.6 billion last year.
This was followed by shrimp (23%), pet food (8%), sardines and mackerel (6%) and salmon (4%).
Gross profit margin rose to 15.5% from 11.7% a year earlier thanks to the growth of sales of its tuna, frozen shrimp and pet food businesses.
It targets revenue this year of $4 billion.
"We're still recording strong growth, as we've put great effort into developing high-margin products," said Mr Thiraphong.
More than 10% of TUF's revenue is generated by high-value products.
He suggested other exporters adopt the same strategy, saying product development was the solution for Thai export products in the long term.
At the same time, the government must figure out how to accelerate investment in infrastructure projects, as that would improve Thailand's competitiveness in the long run.
TUF shares closed yesterday on the SET at 68.75 baht, up 25 satang, in trade worth 81.7 million baht.