TU pursues global leadership through innovation and sustainability
Thai Union Group Plc is one of the world’s largest seafood producers and exporters. President and CEO Thiraphong Chansiri discusses the company’s strategy and outlook.
TU and yourself have received many awards including “Best Managed Company” from Asia Money, “Best Corporate Governance” from Finance Asia, and “Best CEO” from Institutional Investor. What are the key reasons for this?
Since we listed on the Stock Exchange of Thailand in 1994 we have aimed to be a very transparent organisation for all of our stakeholders. By being transparent, we can ensure that our stakeholders, including management, employees, partners, suppliers and shareholders, clearly understand the long-term goal to be a trusted global seafood company. As a result, we have been able to under-promise and over-deliver on the targets that TU has set over the past two decades, and we hope to continue doing so into the future.
As the company has grown since listing 1994, how has management evolved with it?
The management has evolved continuously because each new target, challenge and market requires new and additional skill sets, experience and thinking. We aim to drive growth via three key strategies: organic growth by means of adding value to our existing products; food innovations; and mergers and acquisitions.
In the past few years we have strengthened our management team with international executives who have the global experience to ensure that the ability of our team is able to drive the company towards its 2020 target of achieving US$8 billion in revenues while still ensuring sustainability and innovation.
TU has been active with mergers and acquisitions. What is the strategy behind this?
In 2015, we invested in three new businesses: Orion Seafood International, a major lobster supplier in the United States; a joint venture with Savola Foods Company, the largest food company in the Middle East, and most recently, an investment in Ruegen Fisch, the leading shelf-stable and chilled seafood company in Germany. Each one of these businesses is part of our M&A strategy because it adds either a new product category, a new region, or a combination of both.
How does TU approach innovation as a group?
We have been active in innovation with our culinary development team of more than 200 food scientists, chefs, recipe developers and other cuisine and food processing experts who develop a range of more than 4,000 different recipes and products each year. However, since December 2014 we have been taking innovation a step further with a dedicated Global Innovation Incubator. Today it employs 70 scientists who are purely dedicated to research, developing new ideas, creating new products and new product categories.
The seafood industry is both vast and fragmented, how do you view TU’s positioning and what opportunities exist today?
Today, we are one of the largest seafood companies globally by value. We are the largest processor of tuna by volume, and the largest frozen shrimp importer by volume into the United States. We have also built a leading position across key consumer markets in both Europe and Asia. Now the seafood industry is worth $200 billion globally and therefore there are still many opportunities for TU to explore.
A simple example is our acquisition of MerAlliance whose key product is chilled salmon. This is a product that was not a part of our portfolio in the past and has opened a brand-new market for TU. There are multiple examples of such opportunities both upstream and downstream that are available globally today and we aim to continue expanding into these new markets.
How important are corporate social responsibility and sustainability to TU?
We are the industry leader and aim to make a positive impact by being proactive on issues. We have developed the Sea Change plan, which is Thai Union’s sustainability strategy comprising four key programmes: responsible sourcing; marine conservation; safe and legal labour; and caring for communities. It is an integrated plan designed to ensure that Thai Union delivers sustainability and drives meaningful improvements across the entire global seafood industry.
Where do you see TU five years from now?
Our target by 2020 is to achieve $8 billion in revenues and to increase our net profit margin from 4% to 6%. We aim to achieve this through a combination of organic growth by means of adding value to our products, by food innovations and finally by mergers and acquisitions. With a common vision throughout our entire organisation, focusing on our people, sustainability and innovation, with a constant desire to strive to improve, we believe that this target will be achievable.
Source: Bangkok Post