Faced with several obstacles, our 2017 financial achievements are much lower than expected, especially in terms of our net profit which is 22% lower than our expected returns of 1,705 million baht. Our actual net profit is 1,327 million baht. Despite this, we are able to maintain our customers’ trust, having a trade value of 24,566 million baht. This is merely an 8% lower than the expected value of 26,818 million baht.
The principal cause of our underachievement is the overflow of raw material intake for livestock and vegetable oil. Despite a growing livestock industry (fowl and swine), responding to domestic and an export increase; the high competition and a higher import of soybean substitute products have decreased the prices of the soybean meal and the aforementioned raw materials when compared to the previous years. The market for vegetable oil has shown an increase demand for soybean oil due to consumers becoming more health conscious. This escalation is found both at the household and industry level. However, because of the cessation of the drought, major palm oil suppliers like Indonesia and Malaysia have raised the production of their products. This has resulted in an increase the worldwide palm oil stock to be the highest within two years. In the meantime, the level domestic of palm production was 500,000 tons which was abnormally high. Consumers then chose to buy palm oil instead because it is cheaper. This has caused a negative reaction to the soybean pricing in our previous year.
2017 has seen us win the Environmental, Social and Governance: ESG Award for the subsequent year. This award from the Thaipat Institute has assured our place in the ESG 100. This is indeed a great achievement which everyone in the organization can be proud of. We have strictly followed all of our operating protocols to ensure that we are systematic, transparent and accountable. This, we hope, will steadily increase our efficiency and growth. Also, it coincides with our vision of being responsible for the environment and the public, producing pristine products and conducting safe operations.
Much awaits us in 2018. Challenges lies in rapid change in population structure, climate and technology. Therefore, to succeed, it is crucial for us to be ready to adapt to these changing landscapes. We must be also remain competitive while staying ahead of the curve. We are ready to implement these new and awaiting technologies to better our products while never shying out to our own innovations as well. Our alliance must be strengthen so that we may proceed to the future together while holding our chains of value high. We have to find more ways to increase our supply flow in the current market in all regions, but in particular the CLMV countries. In addition, we will develop our human resources and reconstruct our organizing structure to adjust to our current situation.
With an expertise of being in the soybean business for over five decades, being financially stable and leading the soybean industry in the ASEAN region, I believe we will be more than capable of competing to our full potential. We will be seen as leaders of the industry. Our products will satisfy our customers’ standards, worthy of their patronage and trust. We will advance our personnel and better our company’s structure. We will maneuver and manage our risk wisely with the overall picture in mind and aiming for the best outcome for shareholders.
Lastly, I would like to acknowledge and thank all our benefactors and sponsors, shareholders, customers, financial institutions, business alliances, the state, the public and the press for their support and for playing an important role in our company’s success. We would also like them for the placement of their trust for our board of directors and our management team. I would like to thank every employee here for their mental strength and physical determination to overcome all future challenges and achieve all of our objectives. May you live forever in happiness and prosper.
Chairman of the Board