MLBA 9: June / July 2009
Updates on...
Thailand's GFPT reviews expansion plans as recession kicks in
One of Thailand's biggest processed chicken exporters, GFPT, is reviewing all its expansion plans in the light of a weakening broiler demand abroad.
The company, which also produces feeds for pigs and poultry under the Krung Thai brand, said in January that a new mill would be opened in 2010 in the country's Chonburi province. In partnership with Nichirei Foods, a leading processed food distributor in Japan, GFPT has also started building new chicken processing facilities with an annual capacity of 75,000 tonnes.
Jutamas Ingpochai, GFPT manager for investor relations, says there has not been any decision to freeze these expansion projects but they are being closely reviewed in the face of the current global economic crisis.
With top chicken importers like Europe and Japan in recession, Thai chicken exports this year are projected to contract by 10-12 percent.
Jutamas said that GFPT expects 0 to 5 percent growth in revenue this year to THB10.9 billion, with profits climbing down to 5 percent from last year's 10 percent. It however expects the situation to improve towards the end of the year. She expects GFPT's revenue performance to be within the industry's projected income growth of only 3-7 percent this year.
JBS aims to become largest beef distributor by end of 2010
Brazilian meat processor JBS, the world's largest beef producer, said it aims to become the largest beef distributor by the end of 2010 and has been approached by companies seeking to be acquired.
CEO Joesley Mendonca Batista said the company is confident it could, by the end of next year, become the major producer and distributor of frozen products.
JBS became the world's top beef producer in 2007 after acquiring Greeley, Colorado-based Swift & Co. JBS further ensured its top position by purchasing the beef processing and cattle feeding operations of Smithfield Foods Inc.
JBS stopped making acquisitions and focused on reducing debt last year, but the company is now ready to buy distribution assets and is analysing offers from companies willing to be bought, Batista said.
Tyson's chicken unit returns to profitability
A ''back to basics'' approach has helped the chicken segment of Tyson Foods, Inc. return to profitability, Tyson Foods interim president and CEO Leland Tollett reported.
Efforts to improve operational efficiencies and the product mix in the chicken business are paying off, said Tollett.
Poultry market fundamentals have also improved. Pullet placements, an indication of future broiler supplies, have been down the past five months compared to the same period last year. Egg sets continue to run 6 percent or more below year-ago levels and cold storage inventories of poultry have declined about 20 percent since peaking in November 2008.
Jim Lochner, senior group vice president of Tyson Fresh Meats, noted Tyson's beef and pork segment generated financial returns at or near normalised levels during the second quarter of fiscal 2009.
Thailand's CPF expects good Q1 net profit
CPF's Q1 2009 net profit is expected to grow 39 percent on-year and 106 percent on-quarter to THB629 million due to strong product prices, and softer raw material prices on-quarter.
These should result in higher gross margin of 13.3 percent (from 12.8 percent in Q4 2008 and 12.1 percent in Q1 2008). Moreover, SGA expenses should be under control as sales is estimated at 10.8 percent for Q1 2009, an improvement over 11.3 percent in Q4 2008 and 11.2 percent in Q1 2008.
For the rest of 2009, major product prices (swine, broiler, egg and shrimp) are expected to remain strong like in Q1 2009. This would be supported by (1) supply cuts (pork and shrimp) last year and (2) start of export season for the year. Coupled with lower raw material prices, officials say CPF's gross margins are improving on-year.
Philippine Vitarich ends 2008 with another loss
Vitarich Corp., listed producer and wholesaler of poultry and animal products in the Philippines, ended last year with another loss.
It did not gain from the reduction of its debts due to the approval of its rehabilitation plan in 2007. According to documents from securities regulators, Vitarich, whose shares have been suspended from trading since the company filed for rehabilitation in 2006, posted PHP264.18 million in losses last year from a profit of PHP769.72 million in 2007.
The firm's margins were boosted then by the recognition of PHP859.67 million in income from the court's approval of the company's rehabilitation proposal. Its losses reached PHP210.85 million in 2006.
Vitarich and its subsidiaries ended 2008 with sales up by 12.45 percent to PHP2.76 billion from PHP2.45 billion.
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