Thai Tuna Behemoth Looks Abroad for Acquisitions
|Our Correspondent||Sep 23, 2014|
The news that Thai Union Frozen Products Pcl will purchase the Norwegian seafood firm King Oscar for an undisclosed amount is heing greeted by environmentalists with concern.
Aggressive tuna fishing companies, principally among them Thai ones, the biggest of which is Thai Union, have been responsible for nearly denuding the Pacific of Bluefin tuna, whose numbers have fallen by 96 percent in the northern Pacific Ocean, according to research published by Pew Environmental Research in 2013.
Despite that, giant fishery factories are plying the Pacific, hunting for fish that have gone almost out of existence and awakening concerns of a complete collapse of the fishery. The industry itself is becoming concerned, with participants in an August conference in Bangkok in August saying growing tuna fishing fleets are decimating populations. Earlier this year, the Japan Fisheries Agency announced it would cut the country’s allowable haul of Pacific immature Bluefin by 50 percent in 2015 out of alarm over plummeting stocks.
“I believe that in a few years, the number of vessels will have increased beyond the level that is sustainable and the scientists will tell us after the fact,” said Renato Curtis, the chairman and CEO of Tri Marine International, a tuna processing company. “The need for action is urgent. As an industry we need to stop talking and just do it.”
The Bluefin is sometimes called the Ferrari of the seas for its ability to swim at great speeds across vast amounts of ocean. Some range up to as big as 15 feet in length. They are late breeders, which particularly is a problem. Because of that, according to the Pew report, some 90 percent of specimens currently taken by tuna fishers haven’t yet reproduced. A year or so ago, a single fish sold for US$1,500 in Japan. The fatty underbellies of Bluefin are particularly prized by the Japanese for sushi.
Overall Thailand is the world’s third-largest exporter of fish and fishery products, with exports valued at US$7 billion in 2010. Only China and Norway export more. Thailand fishing companies have improved the size of catches against what is considered to be almost a nonexistent regulatory system. Many species beyond the Bluefin are believed to be nearing extinction both in the gulf of Thailand and the Andaman sea as more and more trawlers put out to sea.
Thai Union Frozen, which owns the Chicken of the Sea and John West international brands, is Thailand’s largest canned and frozen tuna producers, with plants in Thailand, Indonesia, Vietnam and the United States. It is the world’s largest tuna producer. It also owns Petit Navire, Parmentier, Mareblu and Century internationally as well as Sealect, Fisho and Belotta domestically.
Although it is a member of the United Nations Global Compact and a founding member of the International Seafood Sustainability Foundation, Thai Union Foods is considered to be one of the major forces in emptying the oceans of tuna at a time when global supervision of the fishery continues to be ineffective. It owns nine vessels with a capacity of half a million metric tons each, making it the world’s largest canned tuna producer.
Greenpeace in 2013 conducted a four-month investigation of Thai fishing practices, finding that “Thailand’s seas are rapidly reaching the danger zone. Aside from the decline in marine resources, overfishing, destructive and illegal fishing are plundering the life out of our oceans.”
While much of the world’s ability to regulate fisheries is woefully poor, Thailand’s marine police protection is particularly inadequate, Greenpeace found, with six major Marine parks being plundered almost at will. The government has promised stiffer protection against overfishing, but tougher legislation stalled last year among Thailand’s prolonged political crisis, and the new government installed after the May 22 coup has so far not addressed the issue.
Thai Union Frozen is one of several major Thai fishery companies that are buying assets overseas to ready for a surge in demand after the formation of a single market in the Association of Southeast Asian Nations, expected in 2015.
Reuters reported last week that Thai firms have announced more than US$1.7 billion in M&A deals on top of US$25 billion in deals they said they would make in 2012. M&A activity slowed in 2013 as political unrest swept Thailand. Thai Union Frozen’s MW Brands subsidiary earlier this year bought French smoked salmon maker MerAlliance.
“The Atlantic Bluefin is a highly sought-after delicacy for sushi and sashimi in Asia—a single fish has sold for over us$1.75 million,” according to a report by the World Wildlife Fund. “Driven by such high prices, fishermen use even more refined techniques to catch tuna. And the fish are disappearing as a result.”