Charoen Pokphand Foods Plc (CPF) intends to spend THB3.15 billion (US$101 million) to acquire an 83% share of Russia Baltic Pork Invest ASA (RBPI), a large grain and pork producer in the Kaliningrad region in Russia.

 

CPF Investment Limited (CPFI), a subsidiary of CPF, will purchase the shares from Capman Russian Fund LP in the third quarter of this year.

 

RBPI, which also has operations in Nizhny Novgorod and Penza, plans to expand its operations into mainland Russia.

 

President and chief executive officer of CPF, Adirek Sripratak, said the transaction is part of the company's expansion plan into food and in Russia, where the company already operates a feed mill and integrated swine businesses.

 

In 2009, CPF, the food flagship of Charoen Pokphand Group, made a THB3.5 billion (US$113 million) investment in advanced feed mills and swine farms in Lukhovitsy County.

 

The investment aims to serve the huge meat consumption of Russians which stands at about 2.75 million tonnes a year while local production capacity remains low, leading to the import of around 750,000 tonnes of pork every year.

 

RBPI last year reported sales of THB1.39 billion (US$45 million) with THB343 million (US$11 million) net profit.

 

CPF projects sales this year to increase by 10-15% from THB357 billion (US$11.5 billion) generated in 2012. Operations in 12 countries including Russia are expected to contribute about 55% of revenue in 2013, thanks to aggressive investment expansion in recent years.

 

Adirek said the company board also approved the use of THB1.2 billion (US$39 million) to acquire 59.99 shares of CP-Meiji Co (CP-Meiji), which manufactures and distributes dairy products.

 

The company now offers dairy products such as pasteurised milk, yoghurt, cup yoghurt and drinking yoghurt under the Meiji and Meiji-Paigen brand. Last year's sales were THB5.17 billion (US$166 million) with THB206 million (US$6.6 million) in net profit.