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Thai Union Feedmill listed on Stock Exchange of Thailand

Animal feed and aquafeed manufacturer and distributor Thai Union Feedmill has been listed on the Stock Exchange of Thailand under the symbol TFM, and aims to grow in overseas markets.

Company has plans to expand business through several models

Animal feed and aquafeed manufacturer and distributor Thai Union Feedmill has been listed on the Stock Exchange of Thailand under the symbol TFM, and aims to grow in overseas markets, the company said in a press release.

The company said it would seek out cooperative agreements, joint ventures with trading partners and direct exports. It said it is “prepared for continual sustainable growth and determined to take the leadership role in the aquaculture and commercial animal feed business sector.”

Between 2021 and 2023, it expects to spend the proceeds from the sale of shares in the following activities:

  • Expand production and distribution of aquaculture feeds through Indonesia-based subsidiary TUKL by adding two lines of production, which will increase capacity by 36,000 tons per year, requiring an investment of no more than THB250 million by 2023.
  • Repay loans of between THB250 million and THB350 million by March 2022 to reduce the debt-to-equity (D/E) ratio to less than 1 time, after the IPO.
  • Use the remainder as working capital.

Moreover, as a policy, TFM intends to pay dividends twice a year, amounting to no less than 50% of the net profit per the consolidated financial statements after reduction of all categories of reserves according to company rules and legal requirements.

The company said it would also expand operations to overseas markets with several business models:

  • Through an agreement of technical cooperation with Avanti Feeds Ltd., India’s major shrimp feed producer.
  • By joining with strategic partners to form PT Thai Union Karisma Lestari Co., Ltd. (TUKL), a subsidiary to produce and distribute aquaculture feeds in Indonesia. The two strategic partners are PT MSK, a major producer of frozen seafood in Indonesia, and AVANTI. TFM, PT MSK, and AVANTI hold 65%, 25%, and 10 %of TUKL’s paid-up capital, respectively.
  • By forming a joint venture AMG-Thai Union Feedmill (Private) Ltd. (AMG-TFM) with a strategic partner in Pakistan. The Pakistani partner AMG is the country’s major producer of aquaculture feed. AMG holds 49% of shares in the new company while TFM holds 51% as of June 30. AMG-TFM produces 7,000 tons of fish feed per year and plans to increase capacity to 15,000 tons per year within 2021. The joint venture has started commercial operations and recognized revenues with net profit since the second quarter of 2021.
  • Through direct exports to various foreign countries, including Malaysia, Maldives, Myanmar, Pakistan and Sri Lanka.

As for the prospect of domestic market expansion, TFM plans to develop new business and continues efforts in maintaining its competitiveness as an industry leader. The company is the first in Thailand to produce and distribute feeds in form of pellets for sea bass to replace the use of fresh prey, and also a leading producer and distributor of feeds for giant sea bass. Recently, the company also launched products under its “fighting” brand through a marketing campaign to expand its customer base to more diverse segments as the demand for fish feed is on the rise. The Company has also set its sights on promoting feeds for other fish species and has been putting in research and development efforts on feeds for other aquatic species, such as crab and gourami. TFM envisions a growth opportunity in the commercial animal feed sector that should help support food security in Asia.

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