November 9, 2006

 

CPF plans US$3 million expansion into feed operations in Laos

 

 

Thailand's top poultry exporter, Charoen Pokphand Foods Plc (CPF), announced it would set up a new company in Laos to oversee animal feed and animal farming operations with an initial investment of about 110 million baht (US$3 million).

 

According to Adirek Sripratak, the company's president and CEO, CPF would form the new company, C.P. Laos Co, through Charoen Pokphand Northeastern Plc (CPNE), a subsidiary in which CPF directly holds a 99.61 percent stake.

 

Adirek said the new company would expand CPF's production in a country with a very promising potential for growth.

 

CPF's overseas investments over the past five years include a livestock investment in Turkey, followed by investments in aquaculture businesses in China, India and Malaysia.

 

These investments, particularly in aquaculture, has generated "handsome returns" for CP, Adirek said.

 

CPF also invested in a livestock business in Russia in the middle of the year, Mr Adirek said, adding that Laos is another country that CPF's study group found offers good investment potential.

 

CPF yesterday reported sales of 91.90 billion baht (US$2.5 billion) in the first nine months of the year, up 10 percent from the same period last year.

 

However, its net profit fell 63 percent to 2.25 billion baht (US$61.3 million) 

 

Adirek said the drop was mainly due to a decline in profit margins as domestic meat prices in Thailand and Turkey fell. Chicken prices in Thailand fell 31 percent during the bird flu period in the earlier part of the year.

 

Also, in the previous year the company had gained 964 million baht (US$26.3 million) from divesting and disposing of assets.

 

The profit outlook in the fourth quarter was likely to be higher than in the third quarter as average chicken prices in both Thailand and Turkey have improved, Adirek said.