BANGKOK -- The world's largest canned tuna producer Thai Union will increase investment next year, although it is still taking a cautious stance as the coronavirus pandemic continues to weigh on the global economy.
The company on Wednesday announced it would set aside 6 billion baht ($200 million) for investments in 2021, up from just 3.7 billion baht this year when the virus outbreak forced it to slash expenses.
Yet the budget for next year is still much lower than what the company had spent in recent years. At its peak in 2016 and 2017, Thai Union spent more than 24 billion baht on expansion and acquisitions.
"We have adjusted our mindset and M&A is not the priority," said CEO Thiraphong Chansiri. "We would focus on collaborations, joint venture or venture capital. We aim at investing less for more return."
The reason behind such a cautious investment policy is that the world has yet to put an end to the pandemic. Thai Union forecast a modest increase of 5% in revenue next year from this year's expected 150 billion baht. The guidance is based on the assumption that the pandemic will continue to plague the global economy through 2021 and weigh on purchasing power.
For the nine months through September, Thai Union posted 98.8 billion baht in revenue, up 5.9% from the same period last year. Net profit rose 7.4% to 4.8 billion baht over the same period, as global lockdowns spurred panic-buying. The company expects next year's sales to grow at a slower pace than this year.
The key areas for investment next year will be in automation and robotics. Thai Union plans to spend 4.2 billion baht to increase production capacity and improve efficiency in its core seafood and tuna businesses. The company expects high-tech facilities will contribute to efforts to downsize its 44,000 global workforce.
The rest of the budget for next year will be spent mainly on the development and production of high-value-added food, ingredients and supplements through investment in food-tech startups. The products include food for the elderly and food for medical patients, Thiraphong said.