April 5, 2004

 

 

CP Foods Set To Announce Major Japanese Poultry Export Deal

 

Leading Thai poultry exporter Charoen Pokphand Foods Plc (CPF) is in negotiations with Japanese retailer Ito-Yokado Group of Companies (IY Group). Completion of the deal will give CPF a bigger share of the Japanese market once again following months of poor sales because of the bird flu outbreak.

 

The IY Group is one of the leading business conglomerates in Japan. It mainly covers the retail trade with superstores, 7-Eleven convenience stores, restaurants, supermarkets, Robinson department stores and speciality shops. It is also involved in food manufacturing and processing.

 

The bird-flu epidemic is expected to cause Bt10 billion in export losses this year as a result of bans on imports of Thai chicken products.

 

Adirek Sripratak, president and chief executive officer of CPF, said the company's total export volume would reach 90,000-100,000 tons, the same level as last year. Main export markets are the European Union and Japan.

 

"We hope to have up to 5-per-cent growth this year," Adirek said.

 

The company's revenue losses because of the sale of Charoen Pokphand (USA) Inc (CP-USA) - its US broiler business - will be compensated by new facilities in Turkey and a new complex in Nakhon Ratchasima.

 

On March 12, CPF reached agreement with US-based broiler firm Equity Group Eufaula Division to sell its stake in CP-USA worth US$41.18 million (Bt1.62 billion).

 

Prasert Anuchiracheeva, vice president of CP Merchandising Co, said the company's chicken export volume was targeted to reach 40,000 tons this year. The average export price of the product is $3,200 per tonne.

 

"Fortunately, bird flu has created business opportunity for CPF as we have now focused on cooked products, particularly in Japan," Prasert said.

 

Adirek said the company would increase export volume of other products by 40 to 50 per cent from 50,000 to 80,000 tons this year.