Thứ Tư, Tháng Sáu 19, 2024
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HomeSorted by levelC1 - AdvancedThai Union aims to turn tuna heads into gold (Part II)

Thai Union aims to turn tuna heads into gold (Part II)

Thai Union gets half its sales from canned tuna, but it is also looking to expand its lineup of more valuable products. – Một nửa doanh số của Thai Union đến từ cá ngừ đóng hộp, nhưng họ đang tìm cách mở rộng dòng sản phẩm có giá trị cao hơn.

Thai Union aims to turn tuna heads into gold (Part I)

[Reading level: C1 – Advanced]

In Europe, makers of infant formula are required to fortify their products with DHA. Under recently drafted legislation, China will soon impose similar requirements on its formula makers, potentially creating a huge demand for tuna oil in the country.


Coolen, who was previously in the dairy business, sees parallels with that industry and seafood.


“Tuna fish is definitely booming as a result of the wider range of byproducts that can be used now,” Coolen said “The dairy industry went through a similar transition as is the fish business at Thai Union. If you look at the dairy business, decades ago they made money from milk and cheese, but nowadays those activities are actually loss-making. Now those byproducts, such as whey, which is used in baby formula, are actually the main moneymakers for the companies.”


Building in Germany, which boasts advanced industrial technologies, also allowed Thai Union to fully automate its refinery. It takes just three employees to operate the facility, one for each shift.


Equally important, however, was the country’s global image.


“We think the made-in-Germany quality image is something that can help us hit the ground running.” Coolen said. Although Thai Union is well-known in the canned tuna business, it has yet to establish a reputation in the tuna oil sector.


A positive image is particularly important given the bad press Thailand’s fisheries have experienced in recent years.


A lab worker analyzes a sample of canned tuna at Thai Union’s Global Innovation Incubator, a research center in Bangkok. – Một nhân viên phòng thí nghiệm phân tích một mẫu cá ngừ đóng hộp tại Vườn ươm Sáng tạo Toàn cầu của Thai Union, một trung tâm nghiên cứu ở Bangkok.

In July 2014, the U.S. State Department’s annual Trafficking in Persons report downgraded Thailand to Tier 3 amid reports of widespread human rights and labor rights abuses on Thai fishing vessels. Tier 3 ranking can lead to a ban on imports to the U.S. The following year, the European Union gave Thailand a yellow card for its failure to curb illegal, unreported and unregulated fishing, and for ignoring widespread labor abuses.


“To be honest we weren’t prepared for it,” said one former Thai Union executive. In response, the company launched its global Sea Change program in 2016 to provide transparency and traceability in its operations, and the following year it established, in collaboration with Greenpeace, a “code of conduct” that applies to all vessels acting as its suppliers.


Darian McBain, global director of sustainable development at Thai Union, said the company has already brought transparency to its fish canning operation. “You can pick up a can of Chicken of the Sea tuna and you enter the code and you can trace it back to the vessel that caught it and see where it was processed, etc.,” she said.


This transparency, Coolen says, will be applicable to fish oil, though tracing it will be more complicated. “If we sell one batch of oil, it can come from hundreds of vessels, so you end up with a Christmas tree of captains’ statements, but we can do it.”


In addition to tuna oil, there are several other value-added products that can be made from tuna byproducts. Tuna skin, for instance, can be made into gelatin, and the bones and fins can be converted into protein products.


Thai Union has established a Global Innovation Incubator Center in Bangkok, where 110 employees are working to develop new products, though it may take a while before their efforts affect the company’s bottom line. The tuna oil refinery, for instance, has a 5,000-ton annual capacity and is expected to achieve sales of $15 million this year, a drop in the ocean for a multinational with annual sales of over $4 billion.


“We will be talking about this tuna oil five years from now,” said Prasit Sujiravorakul, a senior analyst at Bualuang Securities, a leading securities company in Thailand. “I think they are targeting to achieve 10% of consolidated sales in five to 10 years from now, but the initial target is 1-2% [of sales] in two to three years.” Prasit noted that the gross margin on the tuna oil product could be as high as 30%, compared with 10% on the company’s canned tuna fish.


Thai Union is not the only Thai food conglomerate that is investing in R&D to help them move up the value chain, after decades of being providers of raw materials and primary products.


“Currently, R&D in the food industry is worth over 15 billion baht, the highest of any manufacturing industry in Thailand,” said Kevalin Wangpichaya, of the Kasikorn Research Center, citing 2017 data, the latest available. As with Thai Union’s tuna oil, these R&D investments may take a while to bear fruit.


“It will require some time for value-added food products to play a significant role in Thailand’s export structure,” Kevalin said.






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