Thai Union reels in 25% stake of TSR

Thai Union reels in 25% stake of TSR

The Dock by Thammachart Seafood is a popular seafood restaurant in the Thong Lor area.
The Dock by Thammachart Seafood is a popular seafood restaurant in the Thong Lor area.

SET-listed Thai Union Group Plc (TU), the world's biggest canned and frozen tuna exporter, has acquired a 25% stake in Thammachart Seafood Retail Co Ltd (TSR) in a bid to penetrate the retail seafood segment.

The deal is valued at 37 million baht and TU is using cash from its working capital to fund it. The transaction is expected to be completed by the end of July.

Established in 2007, TSR operates in 158 locations in Thailand, including 150 retail counters at supermarkets and eight food and drink stores, including the Dock Seafood Bar, the Lobster Lab and the Ocean Bar.

Julian Sebastian Gatenby Davies and Sansanee Gatenby Davies, who hold a combined 74.9% share in TSR, have sold their shares to TU.

Julian Davies and Yeeran Davies will initially remain majority owners and retain operational control. Through options, TU is expected to increase its shareholding to 65% in 2019.

Besides reducing the time taken to penetrate the retail segment, TU could launch retail frozen products under Qfresh brand with TSR.

TU could also generate additional sales by supplying TSR with some TU products such as salmon, said TU in a statement.

"TU has invested in TSR to build on its strong retail platform throughout Thailand, particularly in chilled and smoked seafood products associated with TSR," said chief executive Thiraphong Chansiri.

Mr Thiraphong said the investment marks a strategic step to quickly penetrate the retail segment with Thai Union's recently-launched frozen products under our Qfresh brand.

"Working together with Thai Union will enable TSR to pursue our ambitious growth strategy and strengthen our foundation across Thailand by increasing our ability to deliver superior value to our customers, employees and relevant stakeholders," said Mr Davies.

TU's net profit was logged at 869 million baht in the first three months of 2018, down by 39.3% year-on-year, as sales dipped 5.5% to 29.7 billion because of a decline in tuna sales and a stronger baht.

Gross profit declined by 26.2% year-on-year to 3.36 billion baht, while the gross profit margin was 11.3%, down from 14.5%.

TU shares closed yesterday on the Stock Exchange of Thailand at 16 baht, down 30 satang, in trade worth 80 million baht.

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