BANGKOK, Aug 14 (Reuters) - Thai Union Frozen Products Pcl >, the world’s largest producer of canned tuna, is seeking acquisitions to boost sales next year to $5 billion, its chief executive said on Thursday, declining to specify any potential targets.
Shares in Thai Union, which makes “Chicken of the Sea” brand tuna and counts Wal-Mart Stores Inc and Costco Wholesale Corp among its clients, surged last month on speculation it could be interested in buying Bumble Bee Foods, the largest canned tuna and sardines producer in North America.
Bumble Bee Foods is preparing a sale process that could value it as much as $1.5 billion, according to people familiar with the matter.
Asked whether Thai Union was interested in the U.S. firm, President and CEO Thiraphong Chansiri told Reuters there were various assets on the market right now that could be potential acquisition targets. He declined to give details.
“We have a long-term target to achieve sales of $8 billion in 2020. Before that we need to move closer to next year’s target of $5 billion and we need to invest more on acquisitions to meet the target,” he said. Thai Union expects to make $4 billion in sales in 2014.
Earlier on Thursday, Thai Union said its second-quarter net profit surged more than four-fold from a year earlier due to higher margins from its tuna business and improved shrimp sales.
The company is expected to post an average net profit of 4.3 billion baht for 2014, according to Thomson Reuters StarMine, which would be higher than 2.85 billion baht it earned in 2013.
The United States is the biggest market for Thai Union, and CEO Thiraphong said a recent U.S. State Department downgrade to Thailand’s status had so far impact on the company’s operations.
In June, the United States downgraded Thailand, Malaysia and Venezuela to its list of the world’s worst centres of human trafficking, opening up the countries to possible sanctions and dumping them in the same category as North Korea and Syria.
Some Thai companies that rely on exports had expressed concerns that the downgrade would hurt business.
Thiraphong said Thai Union, which exported 33 percent of its products to the United States in the second-quarter and 17 percent to Europe, posted more than 20 percent growth in revenue from U.S. market during the same period.
“No clients cancelled orders because of the downgrade. But in the longer term, the issue could drag down competitiveness of Thai exporters,” he said. ($1 = 31.8600 Thai Baht) (Editing by Miral Fahmy)