24 May 2006
Thailand The Thai tuna industry has become a magnet for big North American manufacturers seeking to establish production bases here in preparation for low tariffs expected under a Thai-US free-trade agreement.
An industry source said that foreign producers of tuna products were paying more attention to Thailand in moves to expand their production bases. The strategy will not only allow them access to the United States and Canada but also to Asian countries.
â€Thailand is now one of the world’s important tuna-processing countries, accounting for 25 per cent of exports,†the source said.
Earlier this week, Associated Press reported that Bumble Bee Foods, a wholly owned US subsidiary of Canadian fisheries company Connors Bros Income Fund, was investing in a Thai tuna processor to expand its presence in Southeast Asia. The company has agreed in principle to invest in Sea Value Company Ltd.
Neither the financial terms of the investment nor the stake Bumble Bee is buying in the Thai company have been revealed.
Together with Connors Bros' Canadian-based subsidiary, Clover Leaf Seafoods, Bumble Bee is North America's largest branded seafood company, with production of canned tuna, salmon, sardines, and specialty seafoods sold under the Bumble Bee, Clover Leaf, Brunswick and Beach Cliff brands.
Bumble Bee president and chief executive Christopher Lischewski said the deal expanded his company's presence in Thailand, where the US company is already one of the largest buyers of canned and frozen tuna products.
â€By investing in Sea Value, Bumble Bee will formally establish a processing footprint in a region that is highly strategic to our business,†he said.
Sea Value president Poj Aramwattnannont said that Bumble Bee would become its strategic partner, to help boost its markets in both the US and Canada.
The company’s total sales revenue reached Bt12 billion last year, and exports accounted for 40 per cent of that. The company plans to maintain its ratio of exports to domestic sales, but expects its sales to climb to Bt18 billion this year.
â€The joint venture will ensure our market and strengthen our competitiveness,†Poj said, adding that Sea Value has sold a small stake to Bumble Bee.
He said the Thai-US free-trade agreement would allow the company to enjoy low tariffs and greater market access. At present canned tuna exported to the US is subject to a 12.5 per cent tariff.
Consumers’ concerns over bird flu and mad cow disease have also created good opportunities for tuna products to capture a bigger share of the market.
As part of this week's deal, Bumble Bee will sign a deal with Sea Value to acquire canned tuna and frozen tuna loins. In addition, the two companies will collaborate in developing processing technology and new products.
In a related development, Sea Value is also entering into strategic fish supply agreements with FCF Fishery Company Ltd of Taiwan and Itochu Corp of Japan, Connors Bros announced.
Poj said his company had also formed a joint venture with Siam International Foods Co Ltd to establish a tuna and sardine processing plant. The facility should be completed in July, with a total capacity of 200 tons per day.
â€The investment will encourage the company to become a leading exporter of tuna and sardine products. We aim to achieve an export value of Bt22 billion next year,†Poj said.
