May 28, 2007

CPF expands Indonesian shrimp assets ten-fold with acquisition 

The Indonesian subsidiary of Thailand's agri-business giant CPF, CP Prima, already the largest shrimp producer in Indonesia, has just become larger with the acquisition of a government controlled asset that would give it ten times more shrimp farming area than before.

A consortium led by CP Prima, the Neptune Consortium, was successful in its bid to acquire government-controlled PT Dipasena Citra Darmaja, a shrimp company the government had been hoping to sell. 

The Consortium paid 688.1 billion rupiah (US$82 million) for the business, the highest bid. The acquisition will expand the operations of CP Prima, already Indonesia's biggest shrimp breeder, to 202,250 hectares from 16,000 hectares.

Shares of CP Prima have nearly tripled since their November initial public offering.

The stock was trading around 680 rupiah on May 24 in Jakarta and the acquisition could push the price to 1,500, said Prayoga Triyono, the head analyst at PT Henan Putihrai in Jakarta.

Dipasena was formerly controlled by PT Bank Dagang Nasional Indonesia and was part of the Gajah Tunggal Group. It was put into government management after the 1997 financial crisis.

The Charoen Pokphand Group has been enlarging its shrimp business, acquiring hatcheries in the Philippines and China in its expansion.