THAI UNION FROZEN PRODUCTS PCL TUF news March - April 2012

Growth

VOL.16

English Version No. 1 Contents 3 Editor’s Note 4-9 Business Highlight TUF: Record Sales and Earnings in 2011 3 Consecutive Years of Trust in TUF among Stock Analysts and Investors

-11 Inside Thai Union 10 A Path to the World’s Tuna King

12-15 Guide Tips (Special) Songkran Festival 16-17 Health Corner Lower Risk of Atrial Fibrillation 18-19 Cook Tips Spiced Tuna Paste Sandwich (Tuna Prung Rod Naam Prig Paad Formula) Fried Large Mild Chili with Tuna Stuffing & Red Curry Sauce 20-22 Activities

March - April 2012 Production Directors & Consultants: Thiraphong Chansiri Produced by: Corporate Communications Department (Ext. 675-678) Thai Union Frozen Products Public Company Limited. Head Office: 979/12 M Floor, SM Tower, Phaholyothin Road, Samsennai, Phayathai, 10400 Tel: (662) 298-0024, 298-0537 - 41 Fax: (662) 298-0024 Ext. 679 E-mail: [email protected]

2 Editor’s Note

This is our March-April 2012 E-Newsletter, the second issue for this year. The fire incident at our shrimp production lines at

Samutsakhon plant in February could be a cause for concern among many readers.

Actually, our well-established in-house safety systems and site emergency plans allowed us to react quickly and effectively to keep the situation under control and, most importantly, to safeguard our employees’ welfare. There was absolutely no fatality in the incident. In order to ensure uninterrupted production activities and timely delivery to our customers, we however have relocated our workforce from the damaged shrimp production lines to Thai Union Seafood, our shrimp- processing subsidiary, in Songkhla Province. Strong operational management and keen cooperation from our people across the business provide us with reasonable confidence in our capability to overcome challenges ahead.

In this issue, we start with the recent achievement of another significant milestone in our corporate history. The record-breaking Q4/2011 and whole-year operational results creditably delivered profitability above expectations. Business Highlight imparts a piece of news on strong trust placed in TUF among stock analysts and investors, as reflected in the annual SAA’s Picked Award granted to us for the third consecutive year in 2011. Inside Thai Union prints life and work philosophies of the winner of the Right Livelihood Award 2012, Mr. Kraisorn Chansiri, TUF Chairman, in a concise writing piece titled “A Path to the World’s Tuna King”. Guide Tips provides you with Songkran Festival schedules in various tourist destinations countrywide. You can discover how much fish can contribute to your good health in Health Corner. As usual, two delicious yet convenient recipes from TUF kitchen are available in Cook

Tips. We share with you the following two mouth-watering and wholesome menus;

“Spiced Tuna Paste Sandwich (Tuna Prung Rod Naam Prig Paad Formula)” and

“Fried Large Mild Chili with Tuna Stuffing & Red Curry Sauce”. Major events in Thai

Union Group during the past two months are reported in Activities.

We wish all readers every happiness during the forthcoming Songkran Festival and its integrated tradition of annual family reunion. Bon Voyage!

Thank you

Editorial team 3 Business Highlight

TUF: Record Sales and Earnings in 2011

TUF announced its annual 2011 operating performance with significant year-on-year growth in both sales and net profit. Full year net earnings soared by up to 77% from a year ago to Bt5,075 million. Sales in U.S. dollar term surpassed the three-billion-dollar target to hit USD3,232 million. The target was met a year earlier than our original timeline. This achievement is considered a big leap in TUF’s long profitable track record and also a demonstration of effective deployment of the firm’s global strategy.

4 Business Highlight

Thiraphong Chansiri, president of Thai Union Frozen Products PCL. (TUF), ’s leading processor and exporter of frozen and canned seafood, announced that 2011 sales in dollar term were USD3,232 million, up 43% from USD2,268 million in 2010. Sales in term were Bt98,670 million, up 38% from

Bt71,507 million in 2010. Total annual net profit increased dramatically to Bt5,075 million year-on-year, up

77% against Bt2,874 million in 2010. The figures represented annual earnings per share (EPS) of Bt5.30, or up 66% from a year ago.

Tuna Salmon Cephalopod Canned & Pouched Shrimp

In respect to Q4/2011 operating results, quarterly net profit soared by up to 332% year-on-year to Bt1,523 million, compared to Bt352 million a year earlier, thanks to significant quarterly sales growth. Sales in

US dollar term for the quarter amounted to USD837 million, up 22% from USD687 million in Q4/2010.

In Thai baht term, sales were reported at Bt26,000 million, up 26% from Bt20,649 million in Q4/2010.

5 Business Highlight

Khun Thiraphong added that 2011 was another exceptional

and fruitful year for TUF. TUF successfully managed to drive its 2011 Sales Breakdown by profitability. In addition, TUF could also achieve its 3-billion-dollar Product annual sales target within barely 3 years against its original 4-year target (within 2012). This initially ambitious goal was successfully

reached one year before schedule, thus being considered a big leap

for TUF. The management and employees across the group were

truly excited about this result. Looking back to the first few months

of 2011, TUF was facing a host of challenges that started during

the fourth quarter of 2010 and continued into the first quarter of

2011. However, thanks to some relentless efforts, TUF managed to

overcome this situation and produced a series of consecutively and

strong performances subsequently in the remaining three quarters of

the year, sending all business plans and initiatives well back on track.

Khun Thiraphong further added that TUF’s domestic and overseas Tuna Products 48% subsidiaries delivered strong annual performances. MWB, in particular, managed to achieve on-target results in every single

Frozen Shrimp 19% quarter through the entire year. Meanwhile, the business integration

between TUF and MWBrands (following the acquisition in 2010) Canned Petfood 7% has been effective without interruption, therefore providing

Domestic Products 6% anticipated synergies to both companies. Besides, annual sales growth was observed across all product categories during 2011. Shrimp Feed 5% Canned sardine/mackerel registered the most robust annual sales growth rate of 81%. Other product categories registering strong

Frozen Salmon 5% sales growth included, among others, tuna (70%), shrimp (22%)

and pet food (10%), respectively. The annual gross margin for 2011 Canned Seafood 5% also climbed to 16.6% from 13.3% in 2010.

Canned Sardine and Mackerel 4% With regards to 2011 annual sales by product, tuna products retained Frozen Cephalopod 1% the largest share of 48% in TUF’s sales portfolio. Frozen shrimp came in the second at 19%, followed respectively by canned pet food (7%),

products for domestic market (6%), canned seafood (5%), frozen

salmon (5%), shrimp feed (5%), canned sardine/mackerel (4%) and 6 Business Highlight

frozen cephalopod (1%). As for the annual sales breakdown by core markets, the US remained the No. 1 spot with a 36% share, followed respectively by the European Union (32%), Japan (10%), domestic 2011 Sales Breakdown by Thai market (10%), Africa (3%), Oceania (3%), the Middle East (2%), Export Market the rest of Asia (2%), Canada (1%) and South America (1%).

TUF sets its annual sales and earnings growth targets at 20% in

2012 respectively. Core products will continue to serve as the main driver for the business. Meanwhile, penetration into new market frontiers in Europe, such as Russia, Germany and Scandinavia, is being implemented by MWB. On the other hand, TUF is gaining a foothold and expanding its product presence among its existing and potential customer bases in Africa and South America. Debt reduction will continue to be the firm’s primary focus in 2012 through prudent financial controls and management. The strong 2011 operating results have helped bring down the firm’s D/E ratio to 1.47 times at 2011 year-end from 1.61 times at 2010 year-end. TUF plans to restore its USA 36%

D/E ratio to its comfort zone of 1:1 by 2013. European Union 32%

Japan 10% The corporate policies and business strategies executed through the years have led to strong operational and cash management in TUF. Domestic Sales 10% The firm has managed to thrive solidly despite constant expansion of its scope of business and corporate organization. This operating Africa 3% efficiency assures continuation of strong performance and profitable growth in the years to come. At present, TUF is well position to thrive Oceania 3% further in international seafood markets with its status of a truly Middle East 2% global industry player. TUF is able to source, produce and market its products globally. In particular, the global brand advantage of its Asia 4% tuna products extends across all geographic regions. TUF now sets to grow its sales to USD4,000 million by the end of 2013. Canada 1%

South America 1% 7 Business Highlight

With regards to the fire incident at one of TUF’s Samut Sakhon plants on February 11, 2012,

the actual cause of the fire and damage cost, as revealed by Thiraphong, are now still under

investigation. The damage caused by the fire was limited to the shrimp production plant only.

Other production plants in the same area are all unaffected. The Samut Sakhon shrimp plant

is the Group’s one of the two main Thailand-based shrimp processing facilities for export

markets. The plant can process up to 120 metric tons of whole shrimp daily. As the first quarter

of each year is typically a low-season period for the shrimp processing business, the utilization

rate of the plant’s capacity is estimated at 60% only at the moment. Nevertheless, TUF has

already relocated part of its existing shrimp processing workers at Samut Sakhon plant to its

subsidiary’s (Thai Union Seafood) processing facilities in Songkhla Province, in addition to other

production plants in the same area. These emergency measures provided the management

with reasonable confidence that TUF should be able to fulfill customers’ outstanding orders

and future demand satisfactorily. Despite the fire incident, TUF has complete confidence in its

capability to handle this challenging situation effectively from production, customer service,

product delivery through repair works for the damaged production lines. Production activities

should return to normal as soon as possible before the beginning of the annual high-season

for shrimp processing in May. In 2010, the Samut Sakhon shrimp plant generated sales worth

USD233 million, accounting for 7% of the total consolidated sales of Thai Union Group.

In addition, the latest TUF board meeting has passed a resolution to seek final approval from

shareholders during the forthcoming 2011 AGM for a dividend payment of Bt0.65 per share

for the 2011 second-half operating period (July-December 2011). The dividend will be wholly

tax-exempt thanks to the BOI privileges. After taking into account the dividend paid earlier

at Bt0.91 per share for the 2011 first-half operating period (January-June 2011), TUF annual

dividend payout ratio for the year is Bt1.56 per share.

8 Business Highlight 3 Consecutive Years of Trust in TUF among Stock Analysts and Investors

Thai Union Frozen Products PCL. has been publicly traded on the Stock Exchange of Thailand for over 18 years. Through the entire history of our presence in the seafood industry, In the year 2011, the Securities Analysts Association granted to us we have been committed to continued its annual SAA’s Picked Award for being the most-admired listed and sustainable development while also company’s top executive for the third consecutive year. We were attaching great importance to constant awarded The Most-admired CEO Award and The Most-admired delivery of excellent innovative products to CFO Award in Agro & Food Category. The grant of the awards meet every need of our consumers. As a is based on favorable votes cast by stock analysts and fund consequence of our vigorous implementation managers who identify TUF’s regular provision of complete and of these corporate policies and strong accurate in-depth information, including facilitating convenient operational management through the years, availability and accessibility for interviews as their deciding factors. which provides us with a healthy ground for continued success, we have gained Albeit this success, we are very conscious of the fact that credibility and trust from all stakeholder information disclosure along with transparency are crucial to groups such as businessmen, stock analysts, the trust and confidence among stock analysts and investors. investors, trading partners, customers, The management and employees across TUF appreciate the financial institutions and consumers, both at full support from the Securities Analysts Association, investors, home and abroad. This widespread public financial institutions and the Stock Exchange of Thailand. recognition is demonstrably evident from favorable institutional rankings and several prestigious awards granted to us as the years progressed. 9 Inside Thaiunion A Path to the World’s Mr. Kraisorn Chansiri Chairman of Thai Union Frozen Tuna King Products PCL

Mr. Kraisorn Chansiri, Chairman of Thai Union Frozen Products PCL. (TUF), was named the winner of the Right Livelihood Award 2012 by the Right Livelihood Foundation. During an annual speech event organized by the foundation, Mr. Kraisorn was invited to deliver an address on how he managed to be on his current path to become the world’s tuna king. His address encompasses work and life concepts and approaches that have guided him through his entire life and to eventually lead him to today’s unparalleled success. The content of his address is both a good role model and an aspiration for the future for the general public. 10 Inside Thaiunion

Mr. Kraisorn’s life is not an overnight success. Although he starts his 4. Expand Knowledge Base and life from scratch as an average Chinese Thai, he achieves an enormous Business Horizons through Strong commercial success through strong determination to learn, diligence Self-discipline and on a Life-time and patience amidst adversity. Throughout his entire work life, he has Basis been adhering to the following 6 philosophies: Learning is vital for keeping ourselves abreast of the ever changing

world. Without eagerness to learn, we cannot stay in commercial 1. Grow Business through Diligence arena successfully. and Austerity Diligent actions should be focused on the highest effectiveness. 5. Express Gratitude and Reciprocation Namely, we should try to achieve quality outcome with as small Gratitude and reciprocation are both important moral goodness for amount of time and labor as possible. Although austerity is a moral us to uphold. This is because whenever we express gratitude to, and goodness, we need to deal with it constructively without making reciprocate, those who help us, they will be further encouraged to impact on profitability. offer help to others in need in the future. 2. Maintain Credibility 6. Give Back to Society Commercial credibility refers not only to solid financial position but Society gives us an opportunity in the form of human capital that brings also to other moral aspects in life. Among them are, for example, us profitability in return. Therefore, we should give back to society on punctuality, ethics, gratitude, respect for seniority and family a broad range of aspects; from education to sports and to relief efforts responsibility. All these qualities in combination function as the source during natural disaster period. Giving back to society makes us happy of commercial credibility. both physically and mentally.

3. Cooperate to Gain Mutual Benefits These 6 fine philosophies enable Mr. Kraisorn to successfully manage In doing business, if we can turn competitor into partner, synergy his business empire and finally lead TUF to the world’s largest canned from concerted efforts of both sides could be created. Examples of and frozen seafood processor. the said synergy include greater bargaining power and more efficient material procurement. Commercial relationship is therefore based more on inter-reliance rather than competition. 11 Guide Tips (Special) Songkran Festival

The upcoming festive season in Thailand can be nothing else other than Songkran, or Water Festival. Travelers worldwide are fascinated by the fun and joy of this unique annual celebration. Below are a number of schedules of the Songkran Festival to be held at various tourist destinations throughout Thailand.

12 Guide Tip (Special)

Event: Songkran Festival and Dok Khun Siang Khaen Festival on Khao Neow Road 2012

Date: April 10-15, 2012

Venue: Bueng Kaen Nakhon and Sichan Road (Khao Neow Road),

Khon Kaen Province

Details: Parades, floral land processions, record-breaking human wave phenomenon, Thai classical dance performances (Ram Wong circle dance), annual family reunion day on April 14, 2012, water splashing on

Khao Neow Road and walking through lustral water tunnel.

For more information: Khon Kaen Municipality Office, Tel: 0 4322 4032,

0 4322 4029 Ext. 1504

Event: Songkran Festival in

Date: April 12-15, 2012

Venue: Around Chiang Mai City

Details: Merit-making activities, parades of Buddha images and bathing

rites, umbrella-carrying ladies on bicycles, pouring lustral water in the elders’

palms and asking for their blessings, sand-stupa building, folk games, Lanna

cultural shows, water throwing along well preserved moats, local landmark

walking street and international cuisine.

For more information: Chiang Mai Municipality Office, Tel: 0 5325 9000

13 Guide Tip (Special)

Event: Wanlai Pattaya Na Klue Festival

Date: April 18-19, 2012

Venue: Lan Pho Public Park in Na Klue District and Pattaya Beach, Chon

Buri Province

Details: Offering alms to monks, parades of Buddha images and bathing

rites, pouring lustral water in the elders’ palms and asking for their blessings,

sand-stupa building, cultural performances, Kong Khao ceremony (rice piling

ceremony), Songkran beauty pageant and refreshing & fun water splashing

under seaside atmosphere.

For more information: Pattaya City Hall. Tel: 0 3825 3231

Event: Hat Yai Midnight Songkran Festival 2012

Date: April 10-15, 2012

Venue: Niphat Uthit 3 Road and Sanehanusorn Road, Songkhla Province

Details: Songkran beauty pageant, late-night water splashing, water

splashing on waterways, offering alms to monks, parades of replica

of revered Buddha image (Luang Pu Thuad) and bathing rites, pouring

lustral water in the elders’ palms and asking for their blessings, cultural

performances, Songkran children’s beauty pageant, folk games and

foam party.

For more information: Songkhla Municipality Office, Tel: 0 7431 1015

Ext. 138 14 Guide Tip (Special)

Event: Songkran Festival in Bangkok

Date: April 10-15, 2012

Venue: Phrachetuphon Vimon Mangkalaram () and the 9 Royal Temples around the Rattanakosin

Royal Square, Bangkok

Details: Demonstration of Songkran Festival in 4 regions of Thailand, parades of Buddha images and bathing rites, traditional food and dessert-making demonstrations, cultural performances and visits to the 9 royal temples.

1. Wat Phrasi Rattana Satsadaram (Temple of the Emerald Buddha or Wat Phra Kaeo)

2. Wat Phrachetuphon Vimon Mangkalaram (Wat Pho)

3. (Temple of Dawn)

4. Wat Kanlayanamit

5. Wat Rakhang

6.

7. Wat Bowornniwet

8. (The Golden Mount)

9. Wat Chanasongkhram

10. Wat Ratchaorasaram

11. Wat Ratchapradit

12.

13.Wat Phraram Kao

In addition, one can partake in the Songkran Festival around Rattanakosin Royal Square and the neighboring districts (, , Phra Athit Road, Santichaiprakan Park and Wisut Kasat).

For more information: Tourism Authority of Thailand (TAT), Head Office, Tel: 0 2250 5500

15 Health Corner

Lower Risk of Atrial Fibrillation

Omega-3

Cardiovascular disease is identified as one of the prime causes of death among population worldwide. The U.S. official health statistics show that more than 2 million Americans suffer from atrial fibrillation - a chronic condition that can cause fatigue and shortness of breath, preventing patients from do normal or sporting activities.

16 Health Corner

Study by Dr. Dariush

Mozaffarian, a researcher at Brigham and Women’s Hospital and an instructor of medicine at Harvard Medical

School in Boston, indicates that eating baked or broiled fish is associated with a lower risk of atrial fibrillation.

According to the study, eating baked or broiled fish can reduce chances of developing atrial fibrillation, including irregular heartbeat. However, eating fried fish does not carry the same benefits, as fried fish contains more fat from frying process. Atrial fibrillation happens when the two upper chambers of the heart (the atria) beat irregularly. When this happens, blood doesn’t get pumped completely out of the atria, and may pool and clot. Should a blood clot occurs, it causes a 15-20% chance of heart failure.

In addition, Dr. Mozaffarian regularly collected data on 4,815 subjects aged over 65 years old through observation and recording what they ate. The study indicates that individual who frequently eats baked or broiled fish has a lower risk of developing atrial fibrillation. The study also reveals that eating fish between 1-4 times a week can reduce the risk by up to 28%, when compared to individual who eats fish less than once a month.

Dr. Mozaffarian believes the protective effect of fish is related to fish oil, which contains Omega-3 fatty acids. The Omega-3 fatty acids are rich in fish and also in other sources such as walnut and green leafy vegetables. The Omega-3 fatty acids not only reduce the risk of arterial and heart diseases but also have favorable influence on brain development and functions.

17 Cook Tips Spiced Tuna Paste Sandwich (Tuna Prung Rod Naam Prig Paad Formula)

Ingredients: Instructions:

3 tablespoons, Stir-fried Tuna in Chili Paste (Tuna Prung 1. Trim away brown edge crusts of bread slices. Toast the bread slices until they

Rod Naam Prig Paad) turn golden brown.

2 slices, sandwich bread

2 slices, tomato 2. Spread a piece of toast with Tuna Prung Rod Naam Prig Paad. Add tomato

Lettuce or your other favorite fresh veggies slices and a leaf of lettuce. Top with the remaining toast. Quarter the sandwich

into bite-sized pieces (triangular or square to your preference) and arrange nicely

onto serving plate. 18 Cook Tips Fried Large Mild Chili with Tuna Stuffing & Red Ingredients: 2 cans, Sealect Low-fat Sandwich Tuna in Brine, Curry Sauce drained 1 tablespoon, all-purpose flour

1 gram, chicken broth

30 grams, pea, blanched

30 grams, carrot, cut lengthwise and blanched

20 grams, potato, cut lengthwise and blanched

10 large mild chilies, seeds removed

Vegetable oil

Beaten egg, sprinkled back and forth across heated

wok to form egg net - to be used as chili wrapper

100 grams, ready-made chili paste

2 tablespoons, fish sauce

2 tablespoons, palm sugar

250 grams, coconut milk

Instructions:

1. In a bowl, mix well Sealect Low-fat Sandwich Tuna in Brine (drained) with all-purpose flour and chicken broth. Add blanched pea, carrot and

potato. Continue mixing all the ingredients moderately through. Set aside the mixture.

2. Stuff each large mild chili with the prepared mixture. Place in steamer over high heat for approx. 5 minutes. Remove from steamer and let rest

until completely cool off.

3. Fry the steamed chilies in a wok over medium heat. Remove from the wok and let rest. Wrap the fried chilies with egg net and arrange in

serving plate.

4. In the wok, heat vegetable oil. Stir-fry ready-made chili paste until it smells rich. Add fish sauce and palm sugar.

Continue stir-frying until they are well blended. Pour in coconut milk and allow it to simmer gently. Shortly after the mixture is brought to the boil, pour it over the egg net-wrapped chilies. Serve hot with freshly steamed rice. 19 Activities

TUF Presence in BOI Fair 2011

The BOI Fair 2011 was recently organized

on January 5-13, 2012 and ended successfully,

projecting the grand image of Thai industrial

and export sectors. TUF, as Thailand’s leading

processor and exporter of seafood products,

showcased a wide variety of its market-leading

products and business strengths to the world at

its pavilion.

Plant Visit by Shareholders

On January 26, 2012, a group of

TUF shareholders attended a guided plant

tour session to observe operations on

site at tuna, sardine, cephalopod/salmon

production lines. The tour session provided

them with confidence in TUF product quality

and standard production processes. Mr.

Wai Yat Paco Lee, TUF Investor Relations

Executive, was present during the session

to exchange opinions and answer questions

raised by interested shareholders under

warm and friendly atmosphere.

20 Activities

Thailand Trust Mark Awarded to TUF

Mr. Kittirat Na Ranong, Deputy PM and Minister of Commerce, presided over Thailand Trust Mark Certificate presentation ceremony, organized by the Department of International Trade Promotion at Siam Kempinski Hotel, Bangkok. Mr. Thiraphong Chansiri, TUF President, was seen receiving the certificate. The prestigious award is granted to TUF in recognition of its continued and proven capability to credibly maintain product quality and successfully win strong confidence among customers and consumers worldwide through the entire long period of its presence in the industry and global marketplace. TUF Joins Press Conference to Unveil New Samutsakhon FC Players

TUF, as a major sponsor of Samutsakhon FC, joined a press conference to unveil new football players for the

new season. The event took place at a meeting room, Ekachai Hospital, Samutsakhon.

21 Activities

Quality Control

Auditors from SGS (Thailand)

Limited conducted a surveillance audit

to evaluate TUF’s maintenance of its

QMS certification. The audit session

took place on January 16-19, 2012

and further provided confidence to

customers and consumers.

Ms. Katie Short from Lovering

Foods Ltd., the UK expert in ambient

foods, conducted a QMS audit at Fish

Line 1 (Tuna) on January 30-31, 2012.

22 23