Thai Union Group Plc, a global leading seafood company, has repledged its intention to invest 6 billion baht to expand its business over the coming year, despite the ongoing global economic challenges, including runaway inflation and rising interest rates.
Thiraphong Chansiri, the group's chief executive, said on Wednesday that 1 billion baht of the investment would be used to support the ongoing construction of its two new factories in Samut Sakhon. On completion, one of the plants would produce protein hydrolysate and collagen peptide, while the other would manufacture certain culinary products.
The company is also building a tuna cold storage facility and a wastewater treatment plant in Ghana. Construction began in the middle of last year and they are expected to become operational for commercial purposes next year.
Meanwhile, the other 5 billion baht would be utilised for maintenance of the company's existing facilities and for innovation.
"Although the situation in terms of logistics and the exchange rate is expected to return to normal next year, we still have to be careful and closely monitor global inflation and interest rate trends while following up on the market environment and getting closer to clients and customers," Mr Thiraphong said.
The spending power of consumers is likely to remain limited, while the company needs to closely monitor how consumer behaviour changes over the coming 12-18 months, said Mr Thiraphong.
More importantly, there are no signs yet that the war between Russia and Ukraine will end, he said.
"With such challenges, the company will have to focus on managing its business agility and flexibility, while closely monitoring the market on a month-by-month or even weekly basis so the company can quickly readjust," he said. "Moreover, overall, organisations need to be revamped, with newly qualified people recruited who fit today's business world."
The company aims to grow its revenue next year by 5% from the estimated 156 billion baht expected in 2022.
"We remain positive on our business prospects because of declining logistic costs which result in lower operating costs. We have become more careful on inventory management and focus more on making a high profit from new product launches,'' he said, adding that, unlike other businesses, the canned food business feels little impact from floods, war or even the looming global economic recession.
According to Mr Thiraphong, as well as the group's three core businesses -- ambient seafood, frozen and chilled seafood, PetCare and value-added products, and others -- the company would put its efforts into building "Red Lobster", its chain of seafood restaurants, as its fourth business pillar in the future.
Red Lobster was added to the Thai Union portfolio in March 2022. Although the business suffered a loss due to the pandemic, TU believes it can reduce Red Lobster's losses by 50% or 500-600 million baht next year, allowing it to break even in 2024 and make a profit in 2025.