TU banking on innovation to spur growth

TU banking on innovation to spur growth

Protein analysis is conducted at Thai Union using a protein purification system.
Protein analysis is conducted at Thai Union using a protein purification system.

SET-listed Thai Union Group Plc (TU), a global seafood conglomerate, aims to innovate for sustainable business growth, increasing the contribution from innovative products to 10% of total revenue within five years.

The company recently launched two innovative products in European markets -- tuna slices and tuna ham made from yellowfin tuna -- in transparent packaging made from 100% recyclable plastic, sealed with easy-to-open foil.

Calcium supplements made from tuna bones are expected to begin commercial production soon, while tuna oil has been registered a patent.

"Innovation is our strategy to drive the company forward," said chief executive Thiraphong Chansiri. "We have continued to invest in research and innovation for 10 years, increasing our budget for R&D."

Innovative products have a higher margin, more than 25% of the sales price, he said.

Tuna calcium supplements and tuna oil can be sold to other industries such as pharmacies and baby food, helping Thai Union diversify from the food industry that often experiences price volatility.

Other industries have stabler product prices and higher growth margins, Mr Thiraphong said.

The company has budgeted 300-500 million baht a year for innovation-related purposes. Some of the budget is used by Thai Union's Global Innovation Center, established in 2015 and partnered with Mahidol University, and Space-F, the first global food tech incubator and accelerator in Thailand, in conjunction with the National Innovation Agency.

Thai Union targets revenue to grow by 3-5% this year amid a slowdown in global economic growth and uncertainties arising from the worsening Sino-US trade dispute, the Brexit crisis and foreign exchange fluctuation.

"Top line [revenue] might not grow much, but the bottom line [net profit] is expected to expand well, as the tuna price is projected to fluctuate less than last year and we have focused more on production efficiency," Mr Thiraphong said.

Thai Union reported first-quarter sales of 29.7 billion baht, down 0.1% year-on-year, partly due to the depreciation of the euro and pound against the baht.

Excluding the foreign exchange impact, sales would have increased by 2.3% year-on-year, driven by sales growth of frozen and chilled seafood, as well as pet care.

TU shares closed yesterday on the Stock Exchange of Thailand at 18.60 baht, down 20 satang, in trade worth 162.95 million baht.


Do you like the content of this article?
COMMENT (1)

Russia's Sputnik V vaccine 'to be cheaper than rivals'

MOSCOW: Russia will charge less for its Sputnik V Covid-19 vaccine than rivals as Moscow aims to produce more than 1 billion doses at home and abroad next year, the head of Russia's sovereign wealth fund said on Tuesday.

18:03

Election charges

Progressive Movement leader Thanathorn Juangroongruangkit reports to Bangkok police to hear criminal charges over the alleged media shareholding that saw him disqualified from parliament.

17:40

Worsening land inequality widens gender, climate change gaps

Land inequality is growing worldwide, threatening the livelihoods of 2.5 billion people who directly rely on farming and widening disparities in gender, health and climate-change impacts, researchers warned on Tuesday.

17:00