Source: Business Week
Thai food producers, the country’s best-performing group of stocks last year, may extend gains as they expand output to meet increased demand for chicken, seafood and animal feed, Nomura Holdings Inc.’s partner said.
Companies including Thai Union Frozen Products, Charoen Pokphand Foods Pcl,and GFPT Pcl will maintain their “strong earnings growth†in 2010, Ploenjai Jirajarus, an analyst at Capital Nomura Securities Pcl, said in a telephone interview from Bangkok today. Capital Nomura is partly owned by Nomura Holdings Inc., Japan’s largest brokerage.
Thailand, Southeast Asia’s biggest economy after Indonesia, is relying on a rebound in overseas demand for agricultural products to spur rural incomes and consumer spending as the country emerges from its worst economic recession in a decade. Charoen Pokphand, the nation’s biggest meat producer, and Thai Union expanded production abroad in the past year to meet the expected increase in sales.
“Food producers will have another good year as the global economic rebound will increase demand,†said Ploenjai, who was ranked the top analyst for small and medium-sized companies by Thailand’s Securities Analysts Association in 2008. “Their earnings have grown pretty well even with the economic recession as foods are staple products.â€
The SET Agribusiness Index of 18 publicly traded producers of food and agricultural products, surged 175 percent in 2009, the biggest gainer among 26 industry groups in the benchmark SET Index, which rose 63 percent. The measure has fallen 0.6 percent this year.
Exports of chicken meat, seafood and other frozen products in November climbed 7.3 percent from a year earlier to $1.18 billion, rebounding from a 6.8 percent contraction a month earlier, according to commerce ministry data. That helped the nation’s exports post their first increase in 13 months.
Thai Union, the world’s second-largest tuna canner, expects its profit to rise to a record in 2009 on higher sales and lower material costs, President Thiraphong Chansiri said on Oct. 21. In November, the company set up a joint venture in Papua New Guinea to secure supplies of tuna supply.
Thai Union is one of the firms which are listed in the Atuna Stock Index – click here to go to the Stock Index