TFG: New Product Distribution Channel

Thaifoods Group Public Company Limited (TFG) is an integrated food production company specializing in chicken and pork products (e.g. frozen products and processed foods). Previously, the company has placed its products on grocery stores/markets or distributed them to retailers/other distributors as TFG didn’t have its own distribution channel.   

In order to reduce dependence on other product distribution channels, TFG has formed a new subsidiary named Thai Foods Fresh Market Company Limited with a registered capital of 20 million baht. The new subsidiary is expected to increase TFG’s product distribution directly through consumers.

This model is similar to the CP Freshmart model used by Charoen Pokphand Foods Public Company Limited (CPF) and the Betagro Shop of Betagro Public Company Limited. TFG will finally have its own distribution channel and as a self-distributing retailer, the company has the potential to create higher margins.

Apart from TFG’s products, the related products are also welcomed to place on this distribution center shelf… other ways to make money.

Better late than never, right?

A while ago, TFG expanded its business to the renewable energy field by signing a contract with Siamraj Public Company Limited (SR) for a construction of Solar Floating. After that, the company has teamed up with Energy Absolute Public Company Limited (EA) to jointly invest in TF Tech Company Limited, which is the associate company of TFG, to install the floating solar in order to generate and sell the electricity.

Resulting in a variety revenue structure…and also offsetting the loss from chicken and pork product revenue during the declining price period.  

For the first half of 2020, TFG already collected the profit of 1,072 million baht, closing to the 2016 and 2017 levels of 1,446 million baht and 1,516 million baht respectively. While in 2018 and 2019, the net profit were 645 million baht and 1,440 million baht respectively.

The main support factor was an increase of chicken and pork product prices after  an African swine fever (ASF) hit China and neighbouring countries.