August 26, 2004

Charoen Pokphand Foods Expects Double Profit From Shrimp Exports
 

Charoen Pokphand Foods Plc is expecting to double its profit from shrimp exports next year. The US Commerce Department has earlier decided to slap lower dumping duties on Thai shrimp compared with other countries.

Adirek Sripratak, president and chief executive of the company, said that Thailand's overall shrimp production would rise to a range of 500,000-600,000 tons next year from 250,000-300,000 tons this year due to the change. As a result, the company's revenues should rise to Bt12 billion in 2005 from an expected Bt6 billion this year.

The US Commerce Department announced a 6.39% anti-dumping duty rate for Thai shrimp late last month. The rate is lower than duties it imposed on China, India, Vietnam, Brazil and Ecuador. The United States had slapped Brazilian and Chinese prawns with 36.9% and 49% duties, respectively.

Adirak said the lower rates on Thai shrimp should make it more competitive in the US.

Charoen Pokphand Foods could raise 14,000 tons of shrimp for export this year and 32,000 tons next year. Sea products should account for 30% of the company's expected revenue of Bt90 billion this year. Adirak said seafood's share of sales should grow to 35% next year due to the positive outlook for shrimp exports.

The company has spent Bt1 billion building three factories in Rayong province to expand production.

"We believe the shrimp industry is returning to the boom period now that an unclear situation has passed," he said.

The US is a major market for Thai shrimp. It imports 500,000 tons of prawns annually, mainly from Brazil, China, Thailand, India and Vietnam.

Pisit Ohmpornnuwat, president of CP Merchandising Co Ltd, said the company emphasised chemical-free shrimp farming, and shunned the use of antibiotics in order to appease major markets such as the European Union and Japan, which have strict food-safety and chemical-trace guidelines.

"The shrimp business has become more difficult since importing countries have forced producers to make their products meet certain standards," Pisit said.