TUF's CEO Thiraphong Chansiri ensures no large acquisitions will be made until 2017. (Photo: TUF/FIS)

TUF plans to settle Bumble Bee purchase and discards new acquisitions

While awaiting for US antitrust authorities approval to complete Bumble Bee Seafoods deal, Thai Union Frozen Products (TUF) ensures that it is not planning to perform major acquisitions for the next two years.

According to sources consulted by FIS.com, the purchase of TUF's US competitor would add USD 1 billion to its annual revenue and allow it to control nearly 40 per cent of the American shelf-stable tuna market.

The Thai firm’s president and chief executive officer Thiraphong Chansiri feels confident that the acquisition of Bumble Bee is expected to be finalised by September or October, The Nation informed.

Referring to the acquisition, Chansiri explained: "We have maintained our prudent financial management. As you see, the last time we made a major acquisition was in 2010 when we bought MW Brands."

TUF’s CEO pointed out the firm’s key focuses this year will be organic growth, integrating and synergising its global operations, and completing the acquisition of Bumble Bee, its largest deal ever.

"I'm still confident that we're on track to achieve our target of doubling our revenues to USD 8 billion by 2020," he added.

The firm’s sources said TUF's total sales grew by just 2.4 per cent in the first quarter, mainly because of all-time-low prices for raw tuna, which would eventually move up, and not because of a slowdown in its business activities.

Chansin expected tuna-fish prices to stay low for the rest of this year while the weakening of the euro and yen might affect the purchasing power of consumers in the countries using those currencies, which are among TUF's major markets.

The CEO explained that the ending of the Generalised System of Preferences for Thailand has caused a loss of market share for Thai frozen seafood in Europe. He also remarked that the European Union’s warning and the country's low ranking in the US Trafficking in Persons report have affected the image of Thai seafood products.

As to the outlook for the future, Chansiri highlighted that after setting up a global innovation centre in Bangkok, the firm would like to see innovative products contribute more than 10 per cent of total group sales by 2020.

TUF also has plans as to the shrimp sector in Thailand and will collaborate with India's Avanti Feeds Ltd to invest in a joint venture for shrimp feed and frozen shrimp for the export market, The Bangkok Post reported.

TUF's global shrimp business president Rittirong Boonmechote expects negotiations on shareholding and new production construction will be completed soon so that operations can commence next year. 

"Supply is falling short of demand, causing shrimp prices to double, which is a major indicator we should be able to beat our own target," he concluded.

Related article:

- TUF reveals expansion plans in India

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