Growing sales of premium pet food have contributed to a 204 percent jump in share prices for Asian Seafoods Coldstorage through July 3, 2017, according to a Bloomberg report. The firm’s revenue is on course to reach THB 14.5 billion (US$427 million) in 2020, from THB 9.2 billion (US$272 million) in 2016. “The pet food business will continue to be our main growth driver, with strong growth outlook and a high profit margin,” said CEO Hendrikus van Westendorp in an interview. “Most people are willing to spend on premium foods for their pets.”
The development of Thailand’s pet food market has coincided with growth in other Asian countries, most notably China. Asian Seafoods Coldstorage provides pet food for brands including Rachael Ray Nutrish in the US, Applaws in the UK and Aixia in Japan. It’s tapping into a trend in developed nations toward the humanization of such products, which is stoking demand for gourmet offerings containing natural ingredients. About a quarter of revenue came from the pet food business in the first quarter, up from 4 percent in 2014.
Earlier this year, Kriengsak Athikomvittaya, general manager of Happy Pet (Thailand), said the Thai market for pet products and services is growing rapidly, even in the midst of an economic downturn. The market is growing at about 10-15 percent a year. More focus on pet food is an emerging trend for Thai tuna canners, as rising skipjack prices have forced them to diversify their businesses, Undercurrent News reported.
Van Westendorp said the company was targeting about THB 4 billion (US$117 million) in pet food sales by 2020, up 150 percent from 2016; a 25 percent climb in seafood sales to THB 7.5 billion (US$220 million) in the same period, and profit margin of at least 10 percent versus 8.4 percent in 2016.
The recent increase in the company’s profit is impressive, but the question is whether Asian Seafoods can keep finding the customers needed to make the most of its investment in pet food capacity expansion, said Ploenjai Jirajarus, an analyst at Capital Nomura Securities in Bangkok. Exports make up around 62 percent of the firm’s sales. First-quarter net income was THB 105.8 million (US$3.1 million), up from THB 10.8 million (US$316,000) from the same time in 2016. Stocks in the firm surged in the weeks after the earnings report in mid-May.
By Lindsay Beaton
This country is straddling the line between developing and developed as more of its citizens see the value in pet ownership.
By Lindsay Beaton