Despite missing its revenue target of $5 billion last year, chiefly due to the cancellation of the Bumble Bee Foods acquisition late in the year, Thai Union is sticking to its ambitious target for 2020.

According to presentation documents provided to stock analysts and the media yesterday, Thai Union will grow from $3.7 billion in revenue last year to the $8-billion target in the next five years through both merger-and-acquisition and organic growth strategies.

Of the total additional incremental revenue of $4.3 billion by 2020, organic growth will account for $2.9 billion, while newly acquired businesses will contribute $1.4 billion. The group’s gross margin is targeted to increase to nearly 20 per cent over the period, from about 15-16 per cent at present, said Wai Yat Paco Lee, Thai Union’s deputy general manager for investor relations and corporate investment.

Under its organic growth plan, new divisions will make an assault on emerging markets, the food service sector and the sale of marine ingredients, in a strategy aimed at generating additional annual revenue of $1.2 billion by 2020.

New product and process innovations will be instrumental to the group’s organic expansion of its existing businesses, he said.

The deputy GM said that Thai Union, which booked record sales and profit last year, now expected to achieve new records in its financial results this year.

The company aims to achieve sales revenue of $4.5 billion to $5 billion this year, which would represent growth of 15-20 per cent in baht terms.

It is eyeing a gross profit margin of about 16 per cent, similar to last year, he added.

The illegal, unregulated and unreported (IUU) fishing regulations have not directly affected Thai Union greatly, because the group buys less than 4 per cent of its fishery supplies from local sources.

“We are not worried [about IUU]. But we are worrying about the image of the country, since consumers [in end-buyer countries] may typecast [all products from Thailand] as the same,” he said.

Elaborating on the group’s new food-service sector division, he said Thai Union would aim to become a total solution provider for establishments such as hotel, catering and restaurant companies, with which it would jointly work to develop their menus, standardise the quality and taste of their products, thus reducing costs, and the sizes of their kitchens.

The targets include large hotel, restaurant and catering operators in the US. The group aims to capture $400 million in annual sales from the food-service sector by 2020, he added.

On the emerging-markets plan, Thai Union will focus on the Middle East, Asean and China, markets in which it aims to increase its revenue to $600 million annually by 2020.

“We will review our approach in the Chinese market to allow our sales to grow more. Although we’re already the No-1 brand in the canned-tuna market there, the market is relatively small because Chinese consumers still do not favour canned tuna. We can introduce new products such as King Oscar premium sardines or Orion Seafood lobsters,” he explained.

The expansion of emerging-market sales will help give Thai Union a better balance between its revenue sources, as about 70 per cent of current sales are from the US and European markets.

Under the revised five-year business plan, Thai Union will no longer need to conduct a capital increase to fund its $4 billion worth of acquisitions planned for the period, since each transaction is likely to be much smaller than the aborted $1.5-billion Bumble Bee deal, he said.

Thai Union has announced a record net profit of Bt5.3 billion for 2015, up 4.1 per cent from the previous year.

Excluding one-off adjustment items such as a fishing-fleet impairment cost of Bt508 million, expenses totalling Bt211 million for its cancelled capital-increase plan, and related expenses of Bt57 million for the aborted acquisition of Bumble Bee, the company booked a normalised net profit of Bt6.1 billion last year.