Thai Union Group’s deal for Canadian processor Les Pecheries de Chez Nous will be used to supply lobster to China, according to a report from an analyst covering the Bangkok, Thailand based company.
The company is looking to sell products from its network into new markets, such as lobster from Canada into China, as part of its plan to hit $8 billion in turnover by 2020.
Despite canceling its deal for $1bn turnover US shelf stable seafood firm Bumble Bee Foods at the end of 2015, the company is still committed to the sales target, as well as a gross margin of more than 20%, according to a report from brokerage Bualuang Securities.
Thai Union plans to generate $5.4bn from recurring organic sales; $1.2bn from organic sales from new divisions and $1.4bn from buying new companies, wrote Bualuang, after a non-deal investor road show from the company on July 4-5.
“Despite the marginal financial impact from the majority acquisition of Chez Nous, the Canadian lobster processor, we expect greater long-term synergistic value from the deal, including the lobster launch in China,” wrote the brokerage.
Thai Union plans on launching lobster and chilled products into China, after it has put its John West tuna brand in the Middle East.
Then, Thai Union plans on launching premium, branded sardines from King Oscar, the Norway-based firm acquired in 2014, in Philippines, Singapore, Malaysia and Indonesia.
In addition, Thai Union plans to debut low-end mackerel products in Cambodia, Laos, Myanmar and Vietnam.
“Future markets will be Africa and South America. It targets gross margin of 20% in 2020, led by new product initiatives and launches, such as fish oil and collagens with the greater branded proportion. Moreover, it is working out recipes for chilled products for foodservice restaurants such as Red Lobster or Subway,” wrote the brokerage.
Chez Nous, based in New Brunswick, Canada has direct relationships with fishermen in both Canada and Maine in the northeastern US, a processing facility strategically located on the Gulf of St. Lawrence, and is investing in a live lobster holding facility.
Chez Nous employs a small full-time office staff managing operations and accounting, and up to 200 seasonal workers during the lobster harvest.
The deal comes after Thai Union’s subsidiary Tri-Union Frozen Products, doing business as Chicken of the Sea Frozen Foods, acquired Orion Seafood International in 2015, making it one of the largest sellers of North Atlantic lobster in the US.