TUF does well in tough export environment

"Reflecting on our performance in the first quarter, we have built a strong foundation to grow further. Therefore, we decided to raise our target for dollar-based sales growth to 20 per cent for this year. The previous target was 12 per cent, set earlier this year," TUF president Thiraphong Chansiri said yesterday.

The company achieved a net profit of Bt578 million in the first quarter, a 10-per-cent increase from Bt527.7 million in the corresponding period last year. Earnings per share rose from last year's Bt0.60 to Bt0.66.

Sales in dollar terms were up by 32 per cent to US$478.3 million (Bt15.35 billion) from $361.6 million a year earlier. In baht terms this was an increase of 20 per cent to Bt15.41 billion, from Bt12.8 billion recorded in the corresponding period of 2007.

Revenue surged by 23 per cent, from Bt13.02 billion in last year's first quarter to Bt15.98 billion.

"During the first quarter of this year, the appreciation of the baht [against the US dollar], the record prices for oil and high fish prices have all been challenges for us. But we survived unscathed, thanks to our ability to deploy a host of countermeasures," Thiraphong said.

Among the measures were timely and extensive foreign-exchange-rate risk management, tight cost control, expansion of the company's customer base to gain market share, stringent quality controls and continual introduction of new products.

TUF achieved a healthy result despite the baht being up to 9 per cent stronger against the dollar than a year ago. During the quarter, strong sales growth was seen across the entire range of TUF's products, in particular tuna, shrimp, canned seafood and pet food.

"In tonnage terms, sales volume surged by 19 per cent, year on year. All in all, we are confident of our growth prospects in spite of the challenging business environment. We believe we are in a strong position to further expand our markets and hopefully gain bigger market shares," Thiraphong said.

"In spite of the adverse impact on Thai exporters of the dramatic appreciation of the baht caused by the Bank of Thailand removing its 30-per-cent capital reserve requirement, we managed to grow with a solid performance. This would not have been possible without our ongoing hedging policy to control foreign-exchange risk exposure."

TUF's major export markets are the United States, the European Union, Japan, Asia, Africa, Australia, the Middle East, Canada and Latin America. Orders from the EU countries, the Middle East, Africa and Latin America have shown very strong growth.

Thiraphong also spoke in positive terms about a review of the anti-dumping measures imposed against TUF's shrimp exports by the US Department of Commerce. The company's shrimp products now face an anti-dumping tariff rate of 15.3 per cent instead of the normal 5.95 per cent.

"With coordination between our lawyer and the Thai Embassy in Washington, we have successfully lodged an appeal. The issue was acknowledged by the Department of Commerce by letter in mid-April," he said.

The US agency has promised to re-evaluate its preliminary decision on TUF and will make appropriate changes when a final rate is released in September, Thirapong said.

"Because of all these positive developments, our lawyer is very confident that the final result will be favourable to TUF and there is good chance that the rate will be competitive," he said.