Thai Union, a leading seafood company, has reported significant growth in the first half of 2024, driven by rising tuna prices and strong performance in its ambient product business. The company, known for its popular brands like John West and Chicken of the Sea, highlighted a 3.6% year-on-year increase in sales, reaching THB 35.3 billion. This growth is further supported by a 10.6% rise in operating profit and a 14.2% increase in net profit. The robust performance is attributed to favorable market conditions and strategic initiatives aimed at enhancing product offerings and expanding market reach.
Thai Union’s ambient product business has been a major contributor to its recent growth. The category, which includes canned tuna, sardines, and mackerel, saw over 50% of total sales in the first half of 2024. The rising global tuna prices have positively impacted profit margins, with prices increasing from $1,333 per ton in the first quarter to $1,478 per ton in the second quarter. This price rise, coupled with higher selling prices and recovering demand in key markets like Europe and the Middle East, has driven significant revenue growth.
The company’s CFO, Ludovic Garnier, emphasized the importance of the ambient product segment during the latest investor update call. He noted that the continued momentum in this category, along with strong performance in value-added and PetCare products, has been crucial for the company’s overall success. The second quarter of 2024, in particular, showed accelerated sales growth and a robust profit margin increase, reaching the highest level in 12 quarters.
Expansion of Value-Added Products
In addition to ambient products, Thai Union has been focusing on expanding its value-added product offerings. This category includes higher-value, higher-priced items such as plant-based foods and fish oils. Sales in this segment saw a significant rise of 13.1% year-on-year, with a profit margin of 28% in the first half of the year. The company’s alternative protein brand, OMG Meat, continues to launch innovative products, while the ingredients business has commercialized a collagen production line and plans to introduce a new protein hydrolysate line by the end of 2024.
The value-added products are seen as a high-growth potential category for Thai Union. The company’s strategic investments in this area are aimed at diversifying its product portfolio and capturing new market opportunities. By focusing on innovation and quality, Thai Union aims to strengthen its position in the global seafood market and drive long-term growth.
Challenges and Future Outlook
Despite the positive performance, Thai Union faces challenges in its frozen business, which saw an 11.7% decline in sales in the first half of 2024. The company attributed this decline to challenges in seafood market prices in the U.S. and soft demand across key markets. However, Thai Union remains optimistic about its future prospects, with plans to continue investing in high-growth areas and enhancing operational efficiency.
Looking ahead, Thai Union aims to capitalize on the growing demand for sustainable and high-quality seafood products. The company’s strategic focus on expanding its value-added and ambient product offerings, coupled with favorable market conditions, positions it well for continued growth. As Thai Union navigates the challenges and opportunities in the global seafood market, it remains committed to delivering value to its shareholders and customers.
