Thaifoods focuses on delivery, social projects

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Thaifoods Group (TFG) has appointed DHL Supply Chain Thailand (DHL) to manage the distribution of its pork, chicken, and processed food products. The company also launched social bond to fund social projects.

From TFG’s manufacturing branches in Kanchanaburi, Khon Kaen, Chonburi, and Prachinburi, DHL will deliver products to customers across Thailand. End destinations include trade distribution centers, trade stores, QSR, industrial food services, and TFG’s export hubs.

DHL’s temperature-controlled fleet will ensure chilled/frozen products are kept in optimal condition throughout the distribution cycle. The company’s integrated online system enables route planning, tracking of delivery status, and gives customers 24-hour access to delivery information.

TFG COO Phet Nantavisai said, “DHL Supply Chain is the clear choice as we need a shipping partner with excellent performance and quality assurance.”

Steve Walker, CEO of DHL said, “We are confident that DHL Supply Chain transport services will help Thaifoods improve operational efficiency through significant cost reductions so as to enhance profitability. This will give the company a competitive advantage in the market, positioning it for growth in both domestic and international markets.”

First social bond

Meanwhile, TFG launched the first social bond issued by a non-financial corporate issuer under Asean social bond standards.

The company sold the bond, totaling USD 30.5 million and with a five-year maturity, to Thai institutional investors in November 2021. The Credit Guarantee and Investment Facility, a trust fund of Asian Development Bank (ADB), guaranteed 100% of the bond.

Thaifoods will use the proceeds to lend money to subsidiaries for financing projects associated with job creation and local ingredient sourcing. “We plan to do more ESG (environmental, social, and governance) financing in the future,” TFG CEO Winai Teawsomboonkij said.

In a strategic partnership, Thaifoods has appointed DHL to manage the transportation and distribution of its products.

Social bonds are bonds that raise funds for projects with positive social outcomes such as improving food security and access to education, health care, or employment generation.

ADB is assisting Thaifoods with identifying eligible projects, and expenditures, developing a sustainable finance framework. “This transaction will serve as a good case study of how private companies can help promote social sustainability,” said ADB Financial Sector Specialist Kosintr Puongsophol.

Loss in Q3 2021

TFG reported a net loss of USD 13.9 million in Q3 2021, hurt by the temporary closure of its chicken slaughterhouse in Kanchanaburi, and Covid-19 related expenses. Total revenue slipped 0.8% to USD 257.9 million.

Revenue from poultry dropped 5.9% and chicken sales volume fell 11.5% to 78,667 tons. Revenue from swine declined 23.2% on lower prices, while sales volume decreased 3.6% to 26,770 tons. However, revenue from feed and other businesses surged 59.1%, as external feed sales volume grew 28.8%.

Mr Phet said the company plans to increase pork production in Thailand by 20% on growing demand.

Editor, Asian Meat Magazine and Meat Insider, Bangkok, Thailand. Discusses the business opportunities, challenges and price gaps of meat and alternative proteins with Maarten Geraets of Thai Union Group in the podcast, ‘Capturing plant-based business opportunities’.