Thai Union reinvesting USD 172 million to expand its seafood business in 2023

Thai Union will invest THB 6 billion (USD 172.4 million, EUR 163.3 million) to expand its operations in 2023, despite global headwinds including high inflation and rising interest rates.

Of that total, THB 1 billion (USD 28.7 million, EUR 27.2 million) will be used to finish and optimize two new factories that will produce protein hydrolysate and collagen peptide in Samut Sakhon, Thailand. Thai Union also plans to open a cold storage facility for tuna and a wastewater treatment plant in Ghana in 2023, after beginning work on both projects in mid-2021. The remaining THB 5 billion (USD 143.6 million, EUR 136.1 million) will be spent on maintenance and upgrades of the company’s existing facilities, according to Bangkok Post.

“Although the situation in terms of logistics and the exchange 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,” Thai Union President and CEO Thiraphong Chansiri said.

Thai Union will be closely tracking consumer behavior over the coming 12 to 18 months with an eye out for shifts caused by economic uncertainty, Chansiri said. He predicted consumer spending power will remain limited due to inflation and the continuation of the Russia-Ukraine war. In response, said he was aiming to optimize the company’s “business agility and flexibility,” but said the company has still set the goal of increasing its revenue 5 percent from the THB 156 billion (USD 4.48 billion, EUR 4.25 billion) it projects it will earn 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 on making a high profit from new product launches,” Chansiri said.

Chansiri was appointed Thai Union’s board chair in May 2022, replacing his father, Kraisorn Chansiri, who was removed from the board after an insider trading scandal.

Thai Union currently has three core businesses including ambient seafood; frozen and chilled seafood; and petcare, value-added, and other products. The company is aiming to develop its Red Lobster affiliate into its fourth core business, despite the difficulties it has experienced with the restaurant chain since its 2020 acquisition. In Q3 2022, the company continued to suffer losses from Red Lobster, reaching THB 456 million (USD 13.1 million, EUR 12.4 million), up from the THB 171 million (USD 4.9 million, EUR 4.6 million) loss it took from the chain in Q3 2021.

But Thai Union expects to trim Red Lobter’s losses by half, or between THB 500 million and THB 600 million (USD 14.4 million and USD 17.2 million, EUR 13.6 million and EUR 16.3 million), in 2023, with the target of breaking even in 2024 and earning a profit by 2025.

On 8 December, 2022, Thai Union announced an investment in Cardiff, U.K.-based  Jellagen, a medical biotechnology company established in 2015, which recently completed a GBP 8.7 million (USD 10.6 million, EUR 10.10 million) Series A fundraising round.

Thai Union’s investment in Jellagen was made through Thai Union’s Corporate Venture Capital Fund, which was established in 2019 to invest in alternative protein development, functional nutrition, biotechnology, and other new technologies along the food value chain. Through its investment and partnership, the fund supports early-stage, entrepreneurial companies operating in these areas to develop in line with the company’s sustainable development goals.

Jellagen focuses on developing collagen biomaterials derived from jellyfish, with a mission to “revolutionize regenerative medicine through a range of medical devices and culture applications.” Jellagen’s studies have initially proved that collagen type 0, which is derived from jellyfish, is superior to mammalian counterparts, particularly in medical and healing areas.

The Series A funding will be used to advance medical development of collagen type 0, which Jellagen said can serve as a sustainable collagen biomaterial for treatment of skin diseases and as a biomaterial for repair of tissue.

In a press release, Thai Union said it hopes that its investment in Jellagen can open opportunities for other collaborations in sourcing, processing, and applications in its existing products and in its product-development process.

“As a seafood industry leader, we strive to leverage innovation in our business and products. Jellagen is at the forefront of jellyfish collagen research and is developing a marine collagen platform which will have applications across medical, cosmetics and the food and nutrition space.” Chansiri said. “We’re looking forward to exploring collaboration opportunities together in our global research and development and processing facilities around the world.”

Jellages CEO Thomas-Paul Descamps said he believes the partnership with Thai Union will help “unleash the considerable potential of the Jellagen technology platform.”

Photo courtesy of Thai Union