“Blue Finance” by Thai Union: Delectable Seafood with Sustainability
Established in 1977, Thai Union Group PCL began as a canned seafood manufacturer in Mahachai, Samut Sakorn. Today, Thai Union is a global seafood leader and one of the world’s largest canned tuna manufacturers, as seen by its $4.2 billion in revenue in 2020 and its 40,000-strong workforce committed to delivering sustainable seafood products to global markets.
Under its global sustainability strategy, SeaChange®, Thai Union has become a leader in driving positive change across the entire seafood industry. The Company is continually exploring innovative opportunities to strengthen the sustainability of its own business and the broader industry through SeaChange® which focuses on four key pillars: Safe & Legal Labour, Responsible Sourcing, Responsible Operations and People & Communities.
With an extensive record of reliability and adherence to key performance indicators (KPI), Thai Union’s Blue Finance initiatives and funding support for marine preservation have boosted confidence among investors amid up-trending interest rates in the arena of Environmental, Social and Governance (ESG) loans and bonds.
Blue Finance, a new financial tool, is available in diverse forms and enables and encourages investment in marine ecosystems and the seafood industry where ESG is the prime goal to be achieved within the agreed timeframes of each financial tool criteria. The interest rate for investors depends entirely on the timespan set for a successful outcome.
Sustainability linked financing allows Thai Union to collaborate with leading financial institutions to support ocean preservation, which is critical to Thai Union’s business, the seafood industry and the world.
Thai Union has been paving the way for Blue Finance since February 2021, with the successful launch of its inaugural Sustainability-Linked Loans (SLL), equivalent to THB 12 billion, in Thailand and Japan. This was followed in July with the successful pricing of its THB five billion seven-year Sustainability-Linked Bond (SLB) for institutional investors, the first SLB in Thailand. To diversify the institutional investor base, in November, the Company successfully issued five-year and 10-year tranches of SLBs totalling THB six billion. In December, Thai Union re-entered the Japanese loan market by launching a JPY 14,000 million SLL. This was after the Company received an “A-” credit rating from the Japan Credit Rating Agency, Ltd. (JCR), which is the same level as Thailand’s sovereign credit rating.
In December 2021, Thai Union received a THB two billion short-term revolving loan from one of the leading banks in Thailand and is negotiating to extend the short-term credit term and derivatives to serve its sustainability purposes.
In recognition of Thai Union’s leadership in Blue Finance, the Company was the recipient of the Business and Product of the Year Award, from Business+ Magazine and the College of Management, Mahidol University, as well as the awards for Best Issuer of Sustainable Finance and Best Deal in Thailand on Fixed Income (Sustainability Linked Bond), granted by the Asset Triple A Awards.
After concluding its refinancing plans in January 2022, Thai Union will complete half of the capital fundraising in Blue Finance, approximately 27 billion baht. Thai Union plans to increase the proportion of Sustainable Finance from 50 percent of long-term borrowings, borrowings to 75 percent in 2025.
Credit : www.bangkokpost.com/business/2247611