April 26, 2007

 

Charoen Pokphand to upgrade its animal feed plants

 

 

Thailand food and farm conglomerate Charoen Pokphand Foods (CPF) will pour significant investments to upgrade its ten animal feed mills nationwide to pace up with its high-end Nakhon Ratchasima plant, according to local broadsheet The Nation.

 

The Nakhon Ratchasima plant - which manufactures feed for poultry, swine and ruminants - was built in 2002 with a production capacity of 1.2 million tonnes a year. However, it is currently using only half of its capacity. The plant uses the latest automatic operating systems from Japan, Europe and the US which ensures hygiene ensures and only requires 50 workers. The plant's operating costs are 20 percent cheaper than in other feed mills but its automated system costs required a THB500-million (US$15.47 million) investment.

 

The company has already spent almost THB1 billion (US$30.94 million) on the gradual improvement of the manufacturing technology in 10 plants in other countries over the past few years. CPF has acquired 120 feed mills in 11 countries with a combined production capacity of 24 million tonnes and plans are afoot in gradually upgrading its production and technology capacities.

 

CPF intends to set up two animal feed mills in Vietnam and expand production capacity in Cambodia. It will open a new plant in Laos in two months and another in Russia with each plant costing THB500 million.

 

The company does not plan to expand production capacity in Thailand as its current 11 plants already manufacture 6.5 million tonnes annually, while total domestic demand is 10.5 million tonnes.

 

CPF currently exports to eight markets, including Singapore, Hong Kong, Taiwan, South Korea, the US and France.

 

Teerasak Urunanon, CPF executive vice president for food processing and integration said admits they are about to face a tough 2007 as the company's first quarter performance experienced a price decline in eggs, pork and chicken.

 

He is also worried about bird flu developments, consumer spending and an increase in raw-material costs this year.

 

Teerasak said feed-mill revenues last year was Bt120 billion and expects to earn THB140 billion expected this year.

 

Her said CPF will see its second-quarter performance to consider whether it must revise expected revenues downwards.