January 20, 2010

CP expects revenue to grow 20%; ups investments

Agribusiness giant Charoen Pokphand Group (CP) projects its revenue to grow by more than 20% and plans to increase its investments to THB40 billion (US$1.2 billion) this year.

The group plans to invest about THB20-30 billion (US$607.1-US$910.7 million) in Thailand, focusing on food, retail and mobile phone businesses. The rest will be devoted to overseas operations, mainly in China, India, Vietnam and Russia. The investments are expected to help lift CP's revenue by 20% this year from more than THB600 billion (US$18.2 billion) in 2009.

Dhanin Chearavanont, the group's chairman and CEO, said the investment will be focused on Thailand this year as the country remains full of business growth potential, particularly after the implementation of the Asean and Asean-China free trade agreements early this year.

Dhanin predicts that Thailand will become the most attractive investment destination of international investors from China, the US and Japan, as investors could manufacture their products in Thailand and export to China and Asean countries where over 90% of the products enjoy zero tariffs.

CP, through its property subsidiary CP Land, is also preparing to move ahead with an investment plan to develop an industrial estate in Rayong where the company now has about 4,000 rai.

The group will also invest in alternative energy by setting up ethanol production plants in the future. Its subsidiaries CP Intertrade and the crop integration unit are conducting a feasibility study.

Dhanin will also persuade foreign investors from China and other countries to set up industrial plants in Thailand. CP is ready to help them in forming joint ventures and applying for regulatory approval and investment privileges from the Board of Investment.

According to Dhanin, CP Group also plans to list CP Pokphand, a China-based animal feed-producing subsidiary, with a market value of THB100 billion (US$3 billion) on the Hong Kong Stock Exchange in March.

CP All chief executive Korsak Chairasmisak said CP All this year plans to spend THB4 billion (US$121.5 million) to expand its 7-Eleven stores by more than 500 outlets from the current 5,300.