TUF unit investing in Vietnamese firm

Business News - Tuesday December 18, 2007

TUF unit investing in Vietnamese firm

POST REPORTERS

Songkhla Canning, a subsidiary of Thai Union Frozen Products Plc (TUF), will invest 110 million baht to take a 51% stake in the Vietnamese seafood processor Yeuh Chyang Canned Food.

TUF president Thiraphong Chansiri said the transaction would help expand the company's regional presence.

''[The investment] will add more processing capacity to the group as well as expand its geographic manufacturing base,'' he said. ''Other equally important factors include the low labour cost and the stable foreign exchange rate, which are critical to our cost competitiveness.''

Mr Thiraphong said the stable Vietnamese dong and improving trade relations between Vietnam and the US and European Union were other advantages to the deal.

Yeuh Chyang is located in Long-An province and employs more than 1,000 workers with a cold storage capacity up to 400 tonnes. Its three main products are pasteurised crabmeat, canned shellfish and tuna with North America, the European Union and Asia as its major export markets.

''Its tuna processing capacity has been small, compared with those of crab and shrimp. However, the firm is ramping up its capacity at the moment,'' Mr Thiraphong said. ''Because of this expansion as well as its small base, we expect its tuna sales to rise 47% in 2008 and 49% in 2009 respectively.''

TUF's operations currently include three fish-processing plants in Thailand, one in Indonesia and one in American Samoa.

Shares of TUF closed yesterday on the Stock Exchange of Thailand at 21.90 baht, down 40 satang, in trade worth 21.33 million baht.

Bangkok Post