Message from Chief Executive Officer

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2017 was a pivotal year for Thai Wah Public Company Limited as we significantly expanded our operations beyond Thailand and capitalized on growth momentum to scale our market leadership. Today, our Thai Wah brands are now present in over 25 countries across the world, serving thousands of consumers today with high-quality and consistent food products.

Despite the challenges of raw material supply in Thailand for Tapioca roots in the fourth quarter of 2017, the Company witnessed positive volume growth across the portfolio of our food and starch products, deepening our presence and strategy in both ASEAN, China and Western export markets.

In 2017 we successfully launched 4 new product SKU under our Rose, Double Dragon and Double Kilin brands and continue to focus on innovation and product development as central to our growth strategy to be a regional leader.

Total sales of the Company across all products in the year under review increased from Baht 6,163 million or 2 percent over the previous year to Baht 6,265 million. Our Thailand export volume for native starch grew 10 percent, although overall Thailand Industry export data for starch declined slightly. Our overall gross margins declined by 3 percent primarily due to the shortage of raw material towards the end of 2017 as farmers had switched crops in 2017 due to the low tapioca root price in the previous year.

For our Starch Business the Company managed to record 1 percent growth mainly due to volume growth in our Thai business and the acquisition of TDC, a modified starch company which exports internationally. The major challenge for the starch business was the shortage of raw material supply towards the end of the year, as plantation crop dropped around more than 10 percent compared to the previous year. We have taken active measures to deal with this short term challenge – such as setting up of our Thai Wah Farmers Network, Mobile Root Sourcing Strategy, and Tracking of our Farmer Accounts proactively to build a sustainable supply base.

For our Food Business, revenue in the food business grew 4 percent compared with last year due to our improvement in sales and marketing and continuing to build Double Dragon, Double Kilin and Phoenix brands as national market leaders. Additionally our rice noodle business grew 17 percent and we remain focused on this product category to scale our market leadership. In the second half of 2017, our Double Dragon brand was also launched in Vietnam with a clear strategic goal to be national market leader.

We remain focused on our “TW 2020 plan” and the Company remains as committed as ever to our three-pillar strategy of pursuing Regionalization, Innovation and Operational Excellence. Over the past year in 2017 - we have successfully kicked off the pre-opening activities and operations for Thai Wah Vietnam, Thai Wah Cambodia and Thai Wah Bio-Power. This enabled us to set a strong foundation to extend our presence to bring new products and services to the market. In addition, the first full year of operations for Thai Wah International Trade Shanghai has enabled us to serve our customers faster and better, as we solidify our position to be the number one tapioca brand in China.

We are proud to share that in Oct 2017, Thai Wah Public Company was recognized at the Asia Corporate Excellence Awards for its commitment towards sustainability and leadership, and also in Thailand recognized with the CSR-DIW Continuous Award by the Department of Industrial Works. Stakeholder excellence – working closely with all our stakeholders, suppliers, farmers and customers, is part of our ethos to be a sustainable company in food, agriculture and environmental management.

With over 10 operations now across Asia Pacific Region, innovation and product development is part of our long term strategy to deliver higher value added products to our customers while expanding our production and manufacturing base regionally. The opening of our Group Innovation Center in Bangkok in early 2017, is a mark for us to improve our portfolio through innovation and R&D and continued focus on quality and safety.

Although net profit decreased in 2017 compared to previous year, we remain a strong net cash position and similar operating cash flow levels compared to 2016. Core to our operating ethos is to take a disciplined view towards all new investments by measuring Returns on Invested capital: in line with generating strong equity returns for shareholders in the long run. As part of our long term commitment to shareholders to increase absolute dividend each year, we remain relentless focused on improving operating cash flow as one of our one key metrics. This filters down to the way that we manage sales, margins, supply chain management and working capital.

All-in-all, the Company's net profit for the period from 1 January to 31 December 2017 based on its consolidated financial statements amounted to Baht 493 million (Baht 0.56/share). On this note, the Board of Directors has resolved to recommend a dividend payment of THB 0.32 per share in respect of the full financial year ended December 31, 2017 which is subject to shareholders' approval at the Company's Annual General Meeting on 27 April 2018.

We would like to take this opportunity to express our deep appreciation to our fellow Directors for their invaluable counsel and guidance which has greatly contributed to the success of the Company in 2017 We would also thank all our associates for their diligence and dedication, and our shareholders, customers and business partners for their continuing support.

We continue our Thai Wah Journey with the binding values that we were founded on 70 years ago – Of Pride, Integrity and Consistency. Striving forward, Together!

Mr. Ho Ren Hua
Chief Executive Officer