SET-listed Thai Union Group Plc (TU), the country's global seafood conglomerate, has partnered with two establishments to set up "SPACE-F", aimed at building an ecosystem for food tech startups and supporting the company's business expansion into the non-seafood segment.
Chief executive Thiraphong Chansiri said the company's business strategy is aimed at promoting innovation rather than mergers and acquisitions, the latter of which it used to drive growth for nearly the past decade.
"We are less interested in acquiring regular businesses or commodities, focusing instead on businesses that have higher net profit margin, as well as innovations," said Mr Thiraphong.
The company plans to keep steady growth of 5% in total revenue in 2019, with higher net profit anticipated due to cost control and innovations, he said.
TU still spends 400-600 million baht a year for innovation projects and supports food tech startups through funding, facilities, tools, research and human resources, said Mr Thiraphong.
"Innovation is our strength leading us to further success in the global food business. It could be a starting point for creating opportunities and entering other non-seafood businesses," he said.
The company can continue to maintain a steady annual growth rate without new innovations, but the growth ratio will expand by double digits if new innovations are adopted, said Mr Thiraphong.
Besides establishing the Global Innovation Centre four years ago, TU collaborated with Mahidol University's Science Faculty and the National Innovation Agency (NIA) in setting up SPACE-F, hoping to develop game-changing technologies, processes and products.
Revenue generated from innovation accounts for less than 1% of the total, but that figure is expected to rise to 5-10% over the next three years, said Mr Thiraphong.
The NIA aims to have 60 startups within three years for SPACE-F, with a minimum accumulated Series A funding worth US$600 million (18.8 billion baht). Apart from TU, the NIA is in discussions with Osotspa Plc and Mitrphol Group.
Food technology covers nine main areas, comprising health and wellness, alternative proteins, smart manufacturing, packaging solutions, novel food and ingredients, biomaterials and chemicals, restaurant technology, food safety and quality as well as smart food services.
"Thailand needs to have a profound food tech startup that uses innovation and science in order to strengthen future growth of the food industry, which is worth over 500 billion baht in the total value chain of production, exports, services and processing," said NIA executive director Pun-arj Chairatana.
By this May, 12-20 startups are expected to be in an accelerator programme, while the incubator will focus on local universities, said Mr Pun-arj. The NIA is open to other strategic partners from the food and beverage sector participating in the scheme.
Tunyawat Kasemsuwan, director of global innovation at TU, said the company aims to allocate a budget of 50 million baht for the SPACE-F programme over the next three years.
"This excludes potential investment to acquire shares in startups or licensed technology of interest," said Mr Tunyawat.
TU's support of new startups enables faster technological acquisition for improving products, he said.