ad info




Asiaweek
 home
 intelligence
 web features
 magazine archive
 technology
 newsmap
 customer service
 subscribe
 TIMEASIA.COM
 CNN.COM
  east asia
  southeast asia
  south asia
  central asia
  australasia
 BUSINESS
 SPORTS
 SHOWBIZ
 ASIA WEATHER
 ASIA TRAVEL


Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

AsiaweekTimeAsia NowAsiaweek story

DECEMBER 24, 1999 VOL. 25 NO. 51

Bangkok's Biggest Catch
Why Thai Union Frozen Food is very hot stuff
By JERVINA LAO and JULIAN GEARING Bangkok


Don't let the suit fool you - CEO Thiraphong doesn't mind mixing it up with the fish
Yvan Cohen for Asiaweek

Thiraphong Chansiri is a fishmonger. "I grew up with tuna," says the 34-year-old president of Thai Union Frozen Products. It's in the blood: his father Kraisorn took over a struggling tuna canner in 1977. "I have been going to the factory since I was very young," says Thiraphong. "We were not rich, so I appreciate the opportunities I have, the education and the confidence the family has in me to handle the company."

"We stick to what we're good at," adds the University of San Francisco MBA, who has been in charge since 1995. "We didn't go out and buy hotels, didn't branch out into telecommunications. We are in the seafood business." Thiraphong has combined low Thai labor costs with special techniques to process tuna of less than two kilos, which U.S. canneries don't care for. Plus the usual hard work: "If the staff work Sundays, I work Sundays."

Sticking to its fishing helped TUF avoid the financial indigestion that made countless Thai companies go belly up (not to mention much of East Asia) after branching out into all sorts of debt-funded businesses. "Today it is the right approach, but a few years back we were the stupidest company in the market, you know," recalls Thiraphong, with a smile. "People asked why we did not borrow and expand."

    ALSO IN ASIAWEEK
Inside Story
TV mogul Subhash Chandra's plan to bring satellite phone service to India is his biggest show yet

Shampoo Wars
Procter & Gamble beats Unilever in China's stores

Cold Cash
How Thai Union Frozen Food rules the tuna trade

Investing
Picking Asia's most promising technology stocks

Viewpoint
Clouds over Korean economic reform

Not that Thai Union looks starved. It is Asia's leading tuna canner and second worldwide only to StarKist, a division of U.S. food giant H.J. Heinz. Every year TUF ships close to 20,000 tons of fish, canned and labeled, to homes, restaurants, and sandwich stands around the world. Despite Thailand's biting economic crisis, the listed company netted $32 million in 1998, on some $470 million in revenues, up a whopping 39% over 1997 in baht terms. First-half figures for 1999 looked even better, with net profit of $26 million on $260 million gross.

And TUF has made its share of aggressive acquisitions. It owns firms that provide nearly everything it needs for its business, from cans and packaging, to labeling and even public relations. On the home front, the company bought a controlling stake in IFC Inter-Food Co., a pie distributor. It invested in T-Holding Co., which operates the Calico Jack fast-seafood chain, and acquired 51% of a frozen-shrimp factory in southern Thailand and renamed it Thai Union Seafood.

In 1996, the company set up Thai Union International Inc., which entered into a $12-million joint venture to purchase assets of Pan Pacific Fisheries, an American tuna canner. The next year, it went into another enterprise with the Gann Family Trust and Tri-Marine International. That joint venture bought into Van Camp Seafoods, the third-largest producer of canned tuna and seafood in the U.S., which owns the Chicken of the Sea brand.

All through the buying binge, Thai Union kept borrowings within bounds. It maintained a prudent debt-to-equity ratio of around 60%, when many other Thai companies went to 200% or more. Add to the low-debt mix a generous helping of clean, transparent accounting and bind it all together with Thiraphong's conservative business style.

The well-timed acquisitions put the processed seafood producer into the ranks of the handful of Thai companies which have surged ahead during the downturn, and not just because of the devalued local currency. "Unlike other exporters, this company does not rely on the depreciation of the baht to boost profit or fortunes," says Youssef El-Khouri Abboud, an analyst with SG Asia in Bangkok. "They depend more on strategic acquisitions to create value for shareholders. We see growth regardless of the currency fluctuations."

For all his gilded success, Thiraphong doesn't mind getting his hands dirty. Rolling up his sleeves, handling tuna on the factory conveyor belt and urging workers on are not beneath this boss. He spends four or five days a week in the main cannery in Samutsakorn, southwest of Bangkok, with occasional visits to a smaller plant in Petchaburi.

"The action is in the factory, not in the office in Bangkok," says Thiraphong. This management style is reflected in the way the company treats its shareholders. Transparency is the norm at TUF, which has made a real effort to keep its shareholders informed of developments and financial data. No wonder its stock has weathered the Crisis like, well, a fish in water. TUF even made Forbes magazine's Global 100 list of high-growth companies - the only Asian enterprise cited.

"The stock went up from 22.5 baht before the July 1997 devaluation, peaked at 166, and now stands at 126," says Abboud. With a 10% annual dividend, the highest on the Bangkok exchange, Thai Union shares are more rewarding than bank savings, which pay a mere 3% at the moment. And growth would boost their value even more. TUF is angling to become a bigger catch. By 2005, it hopes to gross $1 billion. That would make Thai Union Frozen Food an even more delectable dish.

This edition's table of contents | Asiaweek home

AsiaNow


Quick Scroll: More stories and related stories
Asiaweek Newsmap: Get the week's leading news stories, by region, from Newsmap


   LATEST HEADLINES:

WASHINGTON
U.S. secretary of state says China should be 'tolerant'

MANILA
Philippine government denies Estrada's claim to presidency

ALLAHABAD
Faith, madness, magic mix at sacred Hindu festival

COLOMBO
Land mine explosion kills 11 Sri Lankan soldiers

TOKYO
Japan claims StarLink found in U.S. corn sample

BANGKOK
Thai party announces first coalition partner



TIME:

COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

THAILAND: Twin teenage warriors turn themselves in to Bangkok officials

CHINA: Despite official vilification, hip Chinese dig Lamaist culture

PHOTO ESSAY: Estrada Calls Snap Election

WEB-ONLY INTERVIEW: Jimmy Lai on feeling lucky -- and why he's committed to the island state



ASIAWEEK:

COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

Bandwidth Boom: Racing to wire - how underseas cable systems may yet fall short

TAIWAN: Party intrigues add to Chen Shui-bian's woes

JAPAN: Japan's ruling party crushes a rebel ì at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness


Launch CNN's Desktop Ticker and get the latest news, delivered right on your desktop!

Today on CNN
 Search

Back to the top   © 2000 Asiaweek. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines.