Thiraphong Admits TUF Was Hit By “The Perfect Stormâ€ff
15 October 2013
Thailand
The President and CEO of the world’s largest seafood processing and exporting company has admitted that, this year, Thai Union Frozen Products (TUF) has been hit by “the perfect stormâ€. TUF suffered plummeting profits in the first quarter of 2013, down a dramatic 54 percent from 2012.
Thiraphong Chansiri, President of Thai Union Frozen Products
TUF President, Thiraphong Chansiri said that contributors to the storm were a continued increase in raw material prices on tuna, baht volatility, a minimum wage hike, oil prices and shrimp disease that killed 50 percent of supplies.
Now, with the possibility that the US may strengthen the severity of Thailand’s ranking on its human trafficking watch list, the company believes that resources and socio-political context are its biggest challenges for the sustainability of its business. Movement from Tier 2 to Tier 3 on the list could lead to a ban on products imported by the US from Thailand.
Thailand is the global leader for processing canned tuna, while the US is the largest importing nation for canned tuna in the world. In 2012, the US imported 12.151,645 cartons (48x5oz.) of canned tuna from Thailand, making it the most important market for the Asian country.
In an exclusive interview with The Nation, Thiraphong said: “Doing business today is not about how to sell products. But it’s how we can assure global trade partners of our corporate governance and transparency of our companies and the industry we are in. We are doing business with global companies like Tesco and Wal-Mart. None of them would want to do business with companies that could cause them problems, as that could cause them great damage. We must comply with rules if we want to sustain our business.â€
Following various allegations of bad labor practices, including child labor accusations, TUF recently adopted the ten principles of the UN Global Compact and the International Labor Organization (ILO)’s Good Labor Practices (GLP), as well as opening the “Child Care Center†at two schools in Samut Sakhon, Thailand, where its factories are located. TUF strongly denied all allegations.
Talking to The Nation, Thiraphong stressed that it was beneficial for profitable companies to adopt best practices into their operations. He highlighted that the long-term benefits from doing so were huge. He noted that as TUF is geared towards “doing the right things,†employees’ engagement in the business would be enhanced and there were hopes to attract a new generation of workers.
Thiraphong told The Nation: “We have to respond to the consumers’ concerns. Our aim is to sustain in all areas, not just growth. Sustainability is not about money but attitude.†He explained that while money must come first, TUF is opposed to excessive growth through excessive investment and is committed not to expand into unfamiliar businesses.
The new adoption of its sustainable development model will focus on four areas: economic system, socio-political context, resources and culture/religion. The first leg of the program is targeted to achieve annual revenue of USD 5 billion in 2015, up from USD 3.8 billion this year.
