EU and US could reach trade deal this weekend - Reuters
Thai Union Group PCL reported its financial results for the first quarter of 2025, revealing a mixed performance with a notable increase in net profit but a decline in revenue. The company’s earnings per share (EPS) came in at $0.23, while revenue totaled $29.79 billion. With a market capitalization of $24.45 billion and a P/E ratio of 28.19, InvestingPro analysis suggests the stock is slightly undervalued based on its Fair Value model. The market reacted positively, with the stock price rising by 1.98% to $10.30 during the open market session following the announcement.
Key Takeaways
- Net profit increased by 8.9% year-on-year despite a 10.3% decline in top-line sales.
- Gross profit margin improved to 18.8%, though below the target of exceeding 20%.
- The Pet Care business showed resilience with a 5.5% growth.
- Thai Union increased its share repurchase program and reduced capital expenditures.
- The company is preparing for potential US tariff changes by diversifying production.
Company Performance
Thai Union’s first-quarter performance reflects a challenging market environment, with a 10.3% decline in top-line sales compared to the same period last year. Despite this, the company managed to increase its net profit by 8.9% year-on-year, demonstrating effective cost management and operational efficiencies. The Pet Care segment’s growth and the strong performance of the Feed business were notable highlights.
Financial Highlights
- Revenue: $29.79 billion, down 10.3% year-on-year.
- Earnings per share: $0.23.
- Gross profit margin: 18.8%, an improvement but still short of the target.
- Organic sales decline: 6.9%, with a 3.4% impact from foreign exchange.
Earnings vs. Forecast
The company’s EPS of $0.23 did not have a publicly available forecast to compare, but the strong market reaction suggests that investors were satisfied with the results. Revenue came in at $29.79 billion, reflecting a decrease from the previous year but aligning with adjusted expectations given the challenging market conditions.
Market Reaction
Following the earnings announcement, Thai Union’s stock price rose by 1.98% to $10.30, indicating a positive investor response. This movement contrasts with the broader market trend, where the stock had seen a 2% decline in the days leading up to the earnings release. According to InvestingPro data, the company offers an attractive dividend yield of 7.51% and has maintained dividend payments for 31 consecutive years. The stock’s strong free cash flow yield of 7% suggests sustainable dividend payments. Want to discover more quality dividend stocks? Check out InvestingPro’s curated portfolio ideas.
Outlook & Guidance
Looking ahead, Thai Union has adjusted its sales growth forecast from 3-4% to 1-3% and revised its gross profit margin guidance to 18-19%. The company’s current revenue growth stands at 1.73%, with InvestingPro analysts identifying multiple positive factors, including management’s aggressive share buybacks and the company’s prominent position in the Food Products industry. The company continues to focus on transformation initiatives and efficiency improvements, targeting $15 million in cost savings and a $17 million uplift in operating profit. The diversification of production locations aims to mitigate potential impacts from US tariff changes.
Executive Commentary
CEO Thirapong Phansuri highlighted the company’s adaptability: "We are adjusting, and we remain flexible." CFO Ludovic Ghanier addressed regulatory challenges: "We have been facing some changes in regulations in India." Phansuri also emphasized internal improvements: "This is a good time for us to take a look inside and to improve to become more efficient, more effective and more resilient."
Risks and Challenges
- Currency fluctuations, with the Thai baht strengthening against the USD and Euro, could impact profitability.
- Potential US tariff changes may affect export dynamics.
- High shrimp prices and soft demand in the US foodservice sector pose challenges.
- Adjusted sales growth guidance reflects cautious market optimism.
Q&A
During the earnings call, analysts focused on the potential impacts of US tariff changes and the company’s capacity to adapt through production diversification. Questions also addressed the restructuring of Avanti shares and the company’s production capacity across different countries, underscoring concerns about regulatory impacts and market dynamics.
Full transcript - Thai Union Group PCL (TU) Q1 2025:
Nongwang Kigwat Thai San, Meeting Moderator, Thai Union: Good afternoon, everyone. Welcome to Thai Union’s Analyst Meeting for the First Quarter of twenty twenty five. My name is Nongwang Kigwat Thai San, UMC today. First of all, I would like to introduce our key speakers. First, Kun Thirapong Phansuri, our President and CEO followed by Mr.
Ludovic Ghanier, our Group CFO and last but not least, Kunpin Jada Sansakdahan, Head of Investor Relations. Today’s session will take around one point five hours, including the Q and A and followed by a ten minute break before TFM result announcements. Without further ado, I would like to invite Kuntry Apong to begin the presentation, Ka.
Thirapong Phansuri, President and CEO, Thai Union: Thank you very much. And hello to our analysts, the investors joining us as well. We have to apologize for having the meeting on Friday. Normally, we don’t have a Friday meeting, but some of our directors were unavailable. Thus, we had to move it to a Friday.
So we do apologize once again for any inconvenience. And today, it seems like we don’t have many people here physically that joining us online, but that’s still good. For the first quarter, many of you probably already know that we have economic volatility, we have sales policy issues, we have the geopolitical tension, We have inflation. We have a weakening global economy. And we also have the issue of the reciprocal tariffs from The U.
S. And that was in the April. Nonetheless, I believe that on behalf of the management, I would like to say that we are adjusting, and we remain flexible. And we will use our strengths, especially in the supply chain. We have our global footprint.
We will maximize our strengths. I believe that our strengths in every area that we have will enable us to move forward solidly. We have taken many measures in the recent past year. In April and in May, we have been busier than ever because we have been shipping products out in a higher volume because the window of the ninety day extension for the reciprocal tariffs, there are forty three days left for shipping to our destination countries. And so we have been very again, very busy.
And we have been preparing our stocks, especially for our brand, Chicken of the Sea, in The U. S. We are building up our stocks at a higher level to enable us to be more flexible in the shorter term due to the economic uncertainty. And aside from this, we see the importance of transformation even more, and we are lucky that we began since last year. Transformation is our transformation process has allowed us to have an organizational structure and processes that we are improving and ameliorating.
We are focusing on our production costs. We are speeding up production, and we are giving importance to cash. We’re looking at our balance sheet to enable us to remain strong in these various areas as much as possible. On the next page, you will see, before we go into more detail, I would like to talk about our performance in the first quarter of this year. You can see that our top line seems a bit weak.
It’s reduced 10.3% year on year, but this is an organic drop of about 6.9. And the remainder is from the foreign exchange amounting to 3.4%. In the first quarter, we do admit that every whether it’s the dollar or every currency, the pound, there have been there’s been change leading to our drop in the top line, our gross profit. We have done quite well, especially in the first quarter, which is usually a quarter where we have a low gross profit margin. In the 2023, it was in 15% or so.
2024 was a bit higher. But in 2025, we have been able to achieve 18.8%. So this is something that is in line with our wishes. We have wanted to see our gross profit margin continue to increase to reach or exceed 20%. Our operating profit our adjusted operating profit, not including our transformation cost, which is a onetime item, has gone down by 24.7%, while our net profit has gone up by 8.9% year on year.
In terms of our top line, the drop, mostly, it’s due to two or three issues. One is our exports compared to the first quarter last year. The Middle East, we had a special we reached special levels last year. And so there’s been a drop because The Middle East, we’re not seeing as the numbers as big as they were last year. The second thing is our tuna raw materials are usually in a low level and increase in the second quarter.
This year, however, our raw mats in terms of tuna were higher in the beginning of the year. And this many of our customers, therefore, are using a wait and see approach. They are waiting to see the drop in the raw materials. And so there has been a delay in our sales. And in addition, we also have the shrimp as a raw material.
The prices were quite high in the first quarter. But our Pet Care business is something that continues to grow even though it is not in double digits yet. But in the first quarter, there was a growth of about 5%, which is a positive. Our Feed for the first quarter was also has also performed very well. And our Feed business is something that I believe will turn around and be on track.
It will normalize. It will do well. We have a net margin we will have a net margin in a satisfactory level. And as for SG and A, in the first quarter, the increase has come mostly from our consulting fees for the transformation costs. And another source is the increase in the funding for marketing support.
I did inform you earlier that from this year onwards, we will support our brand more and more. And in the first quarter, we had used many a lot in terms of funds, I think, due to our ecotwist in The UK. As for net profit, the growth in our net profit, the main reasons for this are we have our investment in Avanti, which has, again, have been very favorable. And we also have the taxes from transferring our Avanti shares from one account to another. Therefore, we recorded this tax, and this is due to regulations.
It’s not because we wanted to recognize this. It’s due to requirements. So on the next page, you can see our transformation costs in the first quarter is about TWD $287,000,000. We want you to see the benefits as well, not just fixed on the costs. The similar costs will end in this year.
Therefore, we just need to wait it out a little bit longer, and these costs will not be we won’t have to worry about them anymore, and we will see a surplus, especially from next year onwards. I want you to take a look at our profit. It’s dropping mostly because of our operating profit dropping. We have foreign exchange negative figures. And FX gain is 183,000,000 minus $183,000,000 We have our loans.
We have our share profit increasing, and we have the deferred tax as well. Our net income, therefore, overall, without the transformation costs has gone up by 8.9%. And on the next page, he would like to inform you of some changes in terms of our share repurchase program. The Board has allowed for a higher amount of money from JPY 3,000,000,000 to JPY 5,000,000,000 to also increase in shares as well. And our repurchase program is still on track, and we expect it to conclude in June.
And this, again, has been approved by the Board. And moving on, you can see our project ZONR, our target savings is USD 15,000,000. And in the first quarter, we have recognized USD 1,300,000.0. And the numbers are in line with the plan, and the number will continue to increase. And we expect to achieve USD 15,000,000 in savings.
And as for Project Tailwind, for our operating profit uplift, we’re looking for USD 17,000,000. We have been able to achieve USD 3,500,000.0 in the first quarter. Next, we let’s look at our credit rating from the Japan Credit Rating Agency or JCR. We have received a rating that remains at eight, and it’s a stable outlook. It’s not negative.
I believe that this is a sign that the agency is confident the foreign rating agency is confident in Thai Union, and LUDO will report more on our success in issuing our blue loan, a second another round of blue loans. And this is with the Asian Development Bank, which is a bank that is very strict in when it comes to lending. And we have achieved and we have received $150,000,000. And we also have other foreign banks, six banks that are joining ADB in issuing loans for us. And this USD 150,000,000 in loans is a special loan that has a special purpose to be used for purchasing shrimp raw ingredients, sustainable shrimp, in fact, 100% sustainable shrimp.
And on the next page, you can see that we have also received the first top spot for sustainability from S and P Global. We are in the top percent from S and P Global for sustainability. And this is something that we have done well. It is one of our strengths. It is what diversifies us from our competition.
And we continue to work with global partners on this. We also have other businesses or other efforts that we have in terms of sustainability. We’re involved in the World Ocean Summit in Tokyo. We were invited to speak at the event. And when the earthquake hit, we also donated water, food and medicine to the affected areas.
And now we’ll take a look at the financial performance. So I’d like to pass things on to Ludo to provide those details.
Ludovic Ghanier, Group CFO, Thai Union: UNIDENTIFIED Thank you, Contrappong. Very happy to be with you this afternoon. Welcome again. So we’ll start as usual with our five years, four years pictures. Even if we acknowledge that in Q1, our sales are a bit soft, we are extremely happy with the gross profit margin development, okay?
If you know, remember, usually in Q1, our gross profit margin is always the lowest of the year because of the mix categories. I think here, are very pleased with this one. We are just below the 19%. And then regarding net profit margin, you can see we have two lines, the dark blue and the light blue. The light blue is a reported net profit margin and the dotted line in dark blue is the adjusted net profit.
And the difference between the two is on the transformation cost that we incurred in Q1. The next one, you can see we did dive on the sales of the top line performance. So here, the reported top line is decreasing by 10%, ten point three %. We are facing a significant FX impact that was expected. When we did release our guidance in Q4 last year, we told you that the negative impact from the FX would be significant during the whole year.
Why? Because we’re expecting the USD and the euro also to be dropping this year, and this is happening. So we’re not surprised with this decline. But also, our organic sales have been declining across mostly the ambience and the frozen categories in Q1, while the pet care category has been growing in Q1. So just to explain, having a deep dive by category, the ambient sales are declining by 14% year on year.
Just a few things for you to keep in mind. The first one is ConturaPong mentioned that last in Q1 twenty twenty four, our sales to Middle East were exceptionally high. They were very high because during the whole year 2023, the Middle East, which is a very large market for us, they didn’t have access to the USD, okay? They were facing some currency shortage. In Q1 twenty twenty four, they had access again to the USD.
So here, we had a catch up effect, which was exceptional. So the baseline was very high. But also, we have been facing the fish price, which was higher than expected. Usually, in our industry, in Q1, the fish price is always decreasing. But this has not happened, okay?
And when you have a kind of mismatch between the expectation and the market situation, Then very often, as mentioned already by Contirapong, the customers, they will just wait and see to see what is going to happen. They delay a bit the orders. And this is what happened, and this has created some lower sales for us, mostly in Europe and in our OEM sales. Different situation for the frozen business. Frozen declining sales also by 12% in Q1, mostly in the profitable, mostly in The U.
S. Market. Two explanations from this one. First of all, the shrimp prices are very high in Q1. You can see we have two quarters of very high shrimp price in a row, which is a bit exceptional.
And the demand is still very soft in The U. S, okay? Know one of our key output for us in the foodservice business in The U. S, the restaurant industry, you can see the numbers. The restaurant business is weak in The U.
S. So the demand is still very soft, same situation compared to what we have seen before. However, the feed business is doing very well, okay? So please stay for the next earnings call. You have TFA, which will be there.
I think we have some very good news on this one. And then finally, the Pet Care. Pet Care is growing by 5.5%. Maybe you did attend the ITIL earnings call. Even if we expect something more, and they will deliver more growth in the next quarters, they are growing in Q1, and the numbers are okay.
Just a quick focus on the raw material prices. And I think this is one of the key explanation from the soft performance into the top line in Q1. You can see the tuna price was around $16.16 in Q1, while we’re expecting a drop in Q1. The good thing is in April, you can see the tuna prices are softening a bit, okay? We had EUR $1,550,000,000.
Just for you to remember, for the full year, our guidance is around EUR $1,580,000,000, okay? We maintain the guidance, maybe it should be slightly lower. But for the time being, we’re seeing within this range. I want to draw your attention also to the shrimp prices. On the top right, you can see in Q1 twenty twenty five, the average price was $169 Thai baht package, and it was very close to the one we had in Q4.
So here for two quarters in a row, the shrimp prices are extremely high, okay? And when you are facing this situation, then the demand is very soft. Beginning with summon price, this is the opposite situation. We have a bit of softening, okay? Of course, the prices are increasing.
This is normal for Q1. You always have this kind of seasonality. However, if you compare to Q1 twenty twenty four, Q1 ’20 ’20 ’3, the cement prices are lower, and this is a good surprise for us. Now moving to the currency. I think what we can say is overall, the tieback has been strengthening versus all the currencies.
You can see here the change versus dollar is almost 5%. The change versus euro is almost 8%. That’s with GBP, it’s a bit softer, it’s 5.5%. And versus the yen, it’s 7%. So of course, for us, this is a key explanation from the very large FX impact that we have in Q1.
Again, we do expect this effect to maintain the whole year. Just for you to remember, we told you in Q4 that the overall FX impact to expect a negative FX impact for the whole year. So no surprise that was expected. The good news is the euro is strengthening a bit since the March. So moving to our key ratio.
You can see, first of all, the inventory and the net working capital, I think we are under control. Overall, our inventories are increasing in Q1. This is always the case, okay? Just for you to remember, we prepare Q2 and Q3, which is the high season for the sales, especially in Europe. So we are building up some inventories.
So this is what we always see. There is no surprise about this one. And I think in terms of inventory days and net working capital, we do remain under control. In terms of ratio, net debt to EBITDA, are increasing to 4.5%, almost 4.5%. We do expect to remain in this table in the next one, two quarters and then to decrease at the end of the year.
So that should show some positive trend by the end of the year. Net debt to equity, we are still below 1%. For you to remember, our comfort zone is between the 1% to 1.1%. So I think we had a very good financial situation. So if we have a look at our net debt bridge, net debt is increasing from €53,000,000,000 baht to €56,000,000,000 baht at the end of the quarter, and the ratio is around one.
The key drivers, we have a negative free cash flow in Q1. Why? Because our EBITDA is a bit weak at CHF2.4 billion. We are also building up our net working capital, our inventories by CHF2.2 billion. Our CapEx remains under control with 900,000,000 baht.
So the sum of the three, we have temporarily a negative free cash flow by almost 600,000,000 baht in Q1. We also have the impact of the share buyback, which is 1,800,000,000.0 baht in Q1. So total, we believe our net debt to equity is still very strong. You can see also one thing which is interesting. Our cost of capital is decreasing from 3,700,000,000.0 to 3,500,000,000.0.
So here, we can see the impact of the decrease of the interest rate. Just a quick focus also on the Avanti restructuring. And this is a bit technical, I’m sorry for that. So here, we have been facing some changes in the regulations in India. We are holding our Avanti shares through two holdings, through Tying our Ty Union shareholding and also through our Hong Kong holding.
There was some change in regulation in India, which forced us to sell the shares we are owning from Hong Kong to India, okay? We don’t change anything. We continue the partnership with Aventi. We have a very strong collaboration. It has been a very successful joint venture over the past few years, and we continue.
We don’t change anything. So our shareholders, our shareholding before and after remain exactly the same, 24%, twenty five %. So we just transfer the shares from one holding to another holding company. But we enjoy a nice tax effect. Why?
Because usually, when you have some investment in a specific company, you will have a tax value and a market value, which will be different. In accounting, you have to record a deferred tax liability when you have a difference between the two, and that was the case in the past. Now without this transaction, the tax value and the market value is much closer. So we don’t have any more deferred tax liability to be recorded, and we can reverse what we had in the past. So we do enjoy the onetime noncash positive income tax from that, which is roughly 400,000,000 baht, 3 80 million.
Don’t expect this to happen again, okay? Now the shares in Aventi will remain in Thailand. We don’t expect any other changes to happen. So we enjoy this in Q1, but this will not happen again. Again, onetime noncash transaction.
And again, it doesn’t change anything with the partnership with Aventi. The last one is the and Couture of Congo already mentioned this one, the ABB loan that we just announced yesterday. I don’t know if you see the announcements. We’re extremely pleased with this one. We have been working with ABB and different banks also over the past few months.
This is the first time that there is a blue loan, which is being issued in Thailand by the seafood industry. This is also the first financing framework aligned with the Thailand draft taxonomy. So extremely pleased about this one. Here, we are focusing mostly on the sustainable shrimps. So this is mostly for our frozen business.
And the idea is to increase the proportion of the certified sustainable shrimps. We are using the ASC, the Aquaculture Stewardship Concealer, some BAP also and some AIP. So all of this, the whole idea is to increase the sourcing, the sustainable sourcing for our shrimp business. Very pleased about this one. More to come.
We told you in 2025, we have quite a packed agenda in terms of refinancing. So this is the first step, and we are very pleased to have this one. Don’t ask me about the interest rates. As usual, we cannot share this one, but you know us, we did manage to have a very competitive pricing for that. So extremely pleased, and thank you to the team for achieving this one.
And now we’ll let Kun Kwon to go through the business performance. REPRESENTATIVE:]
Thirapong Phansuri, President and CEO, Thai Union: you, Kunluru. For the breakdown by business unit, let’s begin with the first quarter. As we mentioned in earlier, we have our let’s break down our entire profit. Profit sales, Ambient is about 50 almost 50%. The Frozen business is at 28.3%.
And Pet Care is at 14%, Value added is 8.1% of the total sales. You can see that right now, our Pet Care and value added businesses have sales contributions that are 22%, and this is in line with our ambition of reaching 25% to 30% by the year 2,030. Moving on, let’s begin with our Ambient business. In the first quarter for 2024, we had we’re seeing a drop of 14% drop year on year in sales. And there’s also a 7.1% year on year drop in our sales volume.
And we’re also seeing a negative FX impact. And the FX impact is affecting every business category. As for Tina, the price of fish in the first quarter, you can see the it’s $16.60 dollars per tonne. And this is an increase which has led to our customers in the private label. They are delaying their orders, and we’re going to wait to see what the situation is like.
They’re going to wait to see what the situation is like and then order reorder again. The sales volume has dropped down by 7.1% year on year, and this is a result due to the major markets, The Middle East. In the first quarter of twenty twenty four, it was a high baseline for our revenue in this market because it was a period when The Middle East was recovering from a shortage of foreign currency. And in Europe, the there were lower sales in France, in The U. K.
And also in Germany. And this was because of rising fish prices. And our sales volume dropping here has been offset by orders that have increased in other markets, thanks to our strategies that we put in place to support this effect. In our frozen business, we are seeing a strengthening gross profit margin. If you take a look at year on year, it’s gone up 2.8% to 19.4%.
And this is thanks to our sales efforts and our cost management. Moving on to the frozen business. After we did rightsizing, after we implemented rightsizing in that began in 2023 and concluded in 2024, at the moment for our frozen business, we have a new baseline. We have our shrimp products, salmon products and other seafood products, and they each have different sales structures and different profit margins. For the frozen business in the first quarter, we’re seeing sales of 8,400,000,000.0.
And we have our private labels. The absolute amount in growth for the branded is growing. And the drop in sales are due to the shrimp sales that have dropped in the first quarter due to the cost for the price of shrimp increasing by about 20% or so year on year. And our volume went down 2.7% year on year due to our private label drop. If we take a look at an offset of this, the business our TFN business, our feed business, has grown favorably, and this has provided an offset for the aforementioned incident.
And we are doing better, and gross profit margin has strengthened to 12.4%. And this is we’re seeing improvement in our Feed and Chilled business. And if we take a look at the shrimp prices at the moment, they are adjusting upwards, but they will in the following quarters, we expect to see those prices drop. In terms of pet care, we have sales at 4,174,000,000, increasing this is 5.5% year on year. And this is mostly due to our sales abroad shipments to The U.
S, for instance. And the Rolling Most Rolling, we have the negative FX impact. If we take a look at our premium mix, you can see that there’s been adjustment downwards to about 48.7% temporarily compared to the first quarter in twenty twenty four. We had a premium mix at about 55%. And the market situation and the consumer demand has been changing.
Behavior has changed. And our gross profit margin has gone down to 24.5%. It’s dropped a bit. We have to this is due to premium mix. We had a higher base before, but it’s now back in a range within the range of 47% to 50%, in line with our wishes.
And value added business, the sales were at billion. If you look at our value added packaging and ingredients and our byproducts, we have a drop in sales for the various brands as well. Nonetheless, the sales volume has increased significantly to about 14% year on year. This is because of the increasing sales in byproducts such as our value added products. The demand is quite solid, quite strong in the byproduct segment because of increasing demand from the consumers.
And here, we have 27.9% of the gross profit margin because of the this is compared to a higher baseline in 2024. And I’d like to pass things back to Kunta Nepal to provide the outlook. Outlook for this round, we have adjusted our forecast a bit based on the 10% of flat tariff in The U. S. From The U.
S. Ten Percent, this increase is increasing it’s implemented for every country. Therefore, we don’t expect much effect. The retail prices, if the tariff increase is 10%, it doesn’t mean that it’s going to lead to a 10% increase in the prices in the markets. It will be about 7%.
The price at the end destination will not be absorbing will not see the absorption of the entire increase in tariffs. Most of our partners are conducting business as usual. And nonetheless, due to the uncertainty, our customers will probably, of course, be waiting will take a more wait and see approach. And our sales growth, we’ve adjusted from 3% to 4% down to 1% to 3% due to the 10% tariff. And our gross profit margin, we’ve adjusted it down a bit to be a bit more conservative from 18.5% to 19.5%, adjusting down to 18% to 19%.
Our SG and A, we’ve increased it from 13% to 13.5% to 14% instead because SG and A will increase a bit. It might be due to shipping or other areas due to the increasing tariffs as well. CapEx is a measure that we have taken immediate action in. We have reduced it from JPY 4,500,000,000.0 to JPY 5,000,000,000, down to JPY 3,000,000,000 to 3,500,000,000.0. We want to focus on cash until we arrive at a clearer situation.
We will hold our investment for the moment in areas that are not necessary. The effective interest rate, there is no significant change because we have we’re seeing lower interest rates, and we don’t expect much effect. Therefore, we don’t need to adjust this much. And our dividend policy will continue to be paid out twice and at least 50%. We would like to provide more clarity for you because the people outside also, Thai Unions, thirty eight percent of sales is going to be affected.
But in reality, the products that are produced by Thai Union and sent to The United States are at 18%. Twenty % of the 38% Chicken NLC Frozen, for instance, this is bought via other partners in other countries. So there will be no effect because we continue to buy from lower cost sources. So the impact for us is 18%, not 38%, as many people may misunderstand. In addition to this,
Ludovic Ghanier, Group CFO, Thai Union: I would
Thirapong Phansuri, President and CEO, Thai Union: like to speak more about if there are if the tariffs go up to 36%, if that is implemented, what measures do we have? I would like for you to take a look at this page first to see that the tariffs altogether, Vietnam, based on the information that we have at the moment. So right now, Vietnam is at 48%. Thailand is at 48.5%. Total tariffs, Indonesia is 44.5%, just 4% different from us.
The Philippines might seem may look like they have a much lower or they’re facing a much lower tariffs. However, this country doesn’t have a competitive scale in our industry. It doesn’t have much of a share. And Ecuador may be may receive a lot of benefit in terms of tariffs because it’s only a 22.5% total tariffs. When take a look at Ghana and Seychelles, it’s these are two countries in our network that have the lowest that are going to face lowest level of tariffs, even lower than Ecuador at only 10%.
If we take a look back at our businesses, let’s look at them by category. For the ambient segment, we will increase our production capacity in Ghana. Ghana right now, it has the lowest cost outside of Thailand. And therefore, we stand to gain due to the lower tariffs there. We are we are also preparing things at Seychelles to to be able to take advantage of that.
Lines in The US as well. Our production in America, we are also preparing things there. In in Georgia.
Ludovic Ghanier, Group CFO, Thai Union: And
Thirapong Phansuri, President and CEO, Thai Union: we will continue to monitor the situation, see how and see how Thailand responds. We will probably have to reduce things in Thailand if we increase things outside of Thailand. And these are the measures that we are taking. We shouldn’t be able to manage things quite well because we have Ghana and Seychelles. We have ample production capacity there.
And we’re also looking at Vietnam as well. If Vietnam has a higher negotiating ability or power, we are also ready for that. We’re not overlooking that. In terms of the frozen business, in Asia, there is Vietnam and Thailand and Indonesia and India. And I’ve also added on, in the past year, India and Indonesia, they have faced antidumping tariffs.
Many may have forgotten about this. Overall, Vietnam is also facing tariffs higher than Thailand. Let’s take a look at Indonesia. They have total tariffs at 35.9 percent, more or less equal to Thailand’s Thirty Six Percent. India is facing 34.3% total tariffs.
And again, this is not very different from the tariffs faced by Thailand. Ecuador seems to be at an advantage with only 13.8%. However, you need to understand Ecuador is only produces shrimp of a smaller size compared to Thailand or India. And Ecuador’s products are raw and commodity products. Our products are value added.
They are processed. They are cooked. And therefore, we this is a look at the competition for us here in Asia. So we want you to rest assured that there is not much of a difference. As for pet care, ITL probably already provided a very good explanation.
Our wet based cat food, the major producing countries are China, Vietnam and Thailand. If they if consumers just had to buy dry products, more dry products or middle range products or lower range products, there will be a difference. But these countries produce premium products, and Thailand still has the lowest level of tariffs out of all of these wet based food production bases. Lastly, Thai Union has faced so many crises in the past, like, for instance, COVID. And this is another new disease that we are facing.
And we believe that the measures that we use during COVID, we are brushing them off and adjusting them. And our focus is we’re going to look at our production costs, our cash and our transformation as well. We have reviewed all of our processes, and this is a good time for us to take a look inside and to improve to become more efficient, more effective and more resilient and more flexible. So thank you so much for listening for us.
Nongwang Kigwat Thai San, Meeting Moderator, Thai Union: Thank you very much, and see you next quarter.
Thirapong Phansuri, President and CEO, Thai Union: Thank you very much.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.