Livestock processor Thaifoods Group (TFG) is planning to raise funds through an initial public offering (IPO), during the next few weeks. The food processing conglomerate hopes to be listed on the Stock Exchange of Thailand (SET), before the year end.
The proceeds from the IPO will be used by the company to reduce debt and fund its $35 million expansion plans for the next two years.
Komkrit Meekamsat, senior executive vice president of KT Zmico Securities Plc, said that the company is seeking SEC approval to sell up to 1.4 billion shares to the public. Once the company is listed, its paid-up capital will surge to $165 million (5.4 billion baht), he added.
The capital raised from IPO will be primarily used to repay debt. and for businesses expansion. The company is planning to set up 15 new chicken farms with a capacity 400,000 chickens each, by 2016. This will require the investment of 1.32 billion baht ($40.6 million), and is likely to be funded from the proceeds of the IPO.
The company is planning further expansion and intends to invest 660 million baht ($20.3 million) to open six swine farms, 300 million baht ($9.23 million) on improving the efficiency in the chicken slaughtering plants and 150 million baht ($4.61 million) on setting up the first swine slaughtering plant (scheduled to open in the second quarter of next year).
In the first six months of this year, TFG recorded a total income of 8.189 billion baht ($252 million), up from 7.349 billion baht in the same period last year. About 71% of the income came from poultry business, 21% from swine, 7% from feed mills and the rest 0.4% from other businesses.
The company was established in 2001 with the name of ‘Thaifood (2001) Company Limited’ , which has been changed to Thaifoods Group PLC in August 2014. The company has 10 subsidiaries under its umbrella.
Early this year, it opened its third slaughterhouse in Prachinburi province with a capacity of 150,000 chickens per day, resulting the group’s slaughtering capacity to 440,000 chickens per day. The company currently has 1.78 million breeder chickens and 9,300 parent pigs across its farm in Thailand and Vietnam. The hatchery capacity is as high as 4.38 million eggs per week.