SET-listed Thai Union Group (TU), a global seafood company, looks set to raise its capital expenditure to as much as 6 billion baht next year, higher than its average of 4-4.5 billion, to accommodate recovering overseas demand.
Thiraphong Chansiri, TU president and chief executive, said in 2022 the company plans to have new investments of 5-6 billion baht including potential projects focusing on alternative protein, functional food and new technologies for startups to drive innovation.
The company's venture fund is worth US$30 million.
The fund has allocated up to $10 million in investment projects thus far.
According to Mr Thiraphong, TU also set up a new business unit to directly oversee plant-based protein as an alternative food for environmentally aware customers.
The company manufactures plant-based protein products for original equipment manufacturers and exports to more than 10 countries, including the US and several in Europe.
"Customers want to buy healthy food and are focused on food safety and the credibility of manufacturers," he said.
"Consumer behaviours have shifted to cooking at home and online shopping. Thai Union's businesses are ready to serve all channels including food services, restaurants and online channels."
However, export-orientated production still faces obstacles such as container shortages, tight shipping space and a dearth of labour, said Mr Thiraphong.
He said the company is investing an estimated 5 billion baht this year, mainly in a new plant making food ingredients such as protein hydrolysate and collagen peptide, with construction slated for completion next year.
Another project is cold storage facilities in Ghana with a capacity of 8,000 tonnes.
In March, the company established a new subsidiary, Thai Union Lifescience Co, with initial registered capital of 300 million baht.
The new company focuses on manufacturing, trade, distribution and development of supplements, healthcare products and biotechnology products.
Thai Union Lifescience is scheduled to launch Zeavita, its new supplement brand, in September.
The focus initially is on three products -- collagen, calcium and tuna fish oil -- in an exclusive partnership with Watsons and top independent pharmacies, with online sales another channel.
Mr Thiraphong said the company expects to see higher revenue growth for a second consecutive year boosted by rising global demand, the weakening baht and successful business diversification to supplements and plant-based protein.
During the prolonged pandemic, TU fared quite well in frozen seafood, pet care and value-added businesses as well as chilled seafood, he said.
"It is quite lucky our businesses had a good performance in the first half as a result of rising demand from many countries reopening and activities in key trade partners, including the US and Europe, which account for a combined 90% of our export revenue," said Mr Thiraphong.
"More importantly, the company can operate factories as usual even with severe infections in the country."
He said the company projects revenue growth of 5% this year after posting a 4.4% increase in 2020.
Last year, TU reported revenue of 134 billion baht, compared with 128 billion in 2019, 135 billion in 2018 and 139 billion in 2017.
Last year was the first time the company posted net profit of more than 6 billion baht, recording 6.25 billion, up 64% from a year before.
Excluding US antitrust litigation fees in 2019, 2020 net profit still delivered growth of 20% year-on-year on a normalised basis.
Mr Thiraphong said he expects this year's profit growth will outpace revenue growth, driven by rising purchase orders.
He said import orders from worldwide buyers have flooded Thailand given the credibility of Thai production and trust in food safety.
The baht's decline to more than 33 baht against the US dollar also benefits Thai export revenue, said Mr Thiraphong.
In the first half of 2021, the company reported sales grew by 4.4% to 67 billion baht, with net profit rising by 51.7% to 4.1 billion.
"Diversification in terms of markets, product categories and sources of revenue is a key contributor to our strong performance this quarter, and we continue to focus on profitability, financial discipline and new value-enhancing businesses," he said.
