Thai Union is liquidating its subsidiary in China due to its low profit margins, according to a 30 May announcement from the Samut Sakhon, Thailand-based seafood company.
In a statement posted via the Stock Exchange of Thailand, where the firm is listed, Thai Union said it was proceeding with an early termination and liquidation of Thai Union China Company Limited (TUC), a wholly owned subsidiary of the company registered under the law of China.
“In this regard, the executive committee meeting No. 2/2024 on 10 May 2024, approved the dissolution of TUC in order to scale down our low-profitability businesses to reinvest in other growth opportunities,” Thai Union President and CEO Thiraphong Chansiri said. “The registration of dissolution is expected to be completed in June 2025.”
TUC has a capital value of CNY 166.7 million (USD 23 million, EUR 21.2 million) and had THB 400 million (USD 10.9 million, EUR 10 million) in sales in 2023, up from THB 300 million (USD 8.2 million, EUR 7.5 million) in 2022 but down from THB 800 million (USD 21.7 million, EUR 20 million) in 2021, according to Thai Union’s annual report.
Thai Union first targeted China with its own-brand products in 2017 after exiting a joint venture with Philippines-based Century Pacific that was supplying the Chinese market with canned seafood. It quickly expanded via a partnership with e-commerce platform Tmall to sell Chicken of the Sea products via its online sales portal. In 2019, Thai Union partnered with Alibaba Group’s Shanghai Win-Chain in a seafood supply agreement.
“Asia, especially China, is very important to our future growth, with the seafood market expanding steadily. Thai Union is very pleased to join hands with Win-Chain to provide our highest-quality seafood to Chinese consumers,” Chansiri said at the time.
Thai Union is coming off a strong Q1 2024, with higher profits and sales, though it has taken a hit from its decision to sell off its holding in the Red Lobster restaurant chain at a significant loss.
The company is in the midst of a share-repurchasing program it initiated in January 2024, under which it will repurchase 200 million of its shares by 30 June 2024. As of 31 May, it has repurchased 131.4 million shares for THB 1.9 billion (USD 51.6 million, EUR 47.6 million).
