August 22, 2012

 
CP to invest in modern farms in China 
 

Press release

Charoen Pokphand Group is investing in 13 modern farm projects for the production of pigs, chickens, shrimp and eggs through its Chinese operation, Chia Tai.

Under its Chinese arm, Chia Tai, Charoen Pokphand Group is concentrating on two new challenges - modern farm management and property development - with a combined value of RMB 23.62 billion (US$3.72 billion). The "four-in-one" cooperation project will involve the government, farmers, the private sector and banks.

Chia Tai is managing or setting up 13 modern farm projects with a combined investment value of RMB 30.283 billion (US$4.77 billion). These are in Jiangxi, Jiangsu, Hebei, Anhui, Shandong, Jilin, Guangdong, Xinjiang, Zhejiang, Jiangsu, Hubei, Shandong and Beijing. The projects concentrate on pigs, chickens, shrimp and eggs. Of the total project value, four projects with a combined value of RMB 23.62 billion (US$3.72 billion) have been agreed with the Chinese government.

The Chinese government wants the project to help revolutionise its farm sector to ensure the country's food security and better living standards. Farmers will be encouraged to use modern techniques and equipment to increase revenue.

Buoyed by rapid economic growth, the Chinese government also wants to reduce poverty and believes introducing technology to its agricultural sector can help. It hopes the initiative will narrow the income gap between urban and rural residents.

Chia Tai supplies breeding stock for shrimp, pig and poultry farming, as well as feedstock, technology and marketing management. It is a minor shareholder holding at least 15% of each project. This will encourage Chia Tai to grow more in the field of professional project management rather than only focusing its expertise on the agriculture, food and retail sectors.

Thanakorn Seriburi, vice chairman of CP Group, says it is stepping up its investment in China to ensure expansion of its business in the future. The joint investment will help extend the group's business and its efficiency. It is CP's policy to increase investment in China by 15% annually to ensure annual sales growth by the same percentage.