MLBA12: December / January 2010
Updates on...
Thailand's CPF forecasts 5-10 percent sales growth
Charoen Pokphand Foods (CPF) forecasts its sales to grow by 5-10 percent next year with operating profits stabilising in light of a business restructuring that is focused more on ready-to-eat food and animal feed.
"We are still upbeat about maintaining the growth momentum next year, with sales growth of about 5-10 percent on par with this year's growth," said Adirek Sripratak, president and CEO of the SET-listed flagship of Charoen Pokphand Group (CP), the country's agribusiness conglomerate.
"We also project more stabilised profit in the year to come, as we have restructured our business model from heavily depending on commodities, particularly meat for which prices are volatile, to [ready-to-eat] food and animal feeds and CP brand development."
He said CPF expected a record profit this year as overseas sales and ready-to-eat food under the CP brand increase and raw material costs have been lower than last year.
Performance has also been supported by aggressive distribution unit expansion, mainly through CP Fresh Mart and Five Star Chicken. Currently, there are more than 500 CP Fresh Mart outlets operating, with the figure expected to expand to at least 2,000 in the future.
According to Adirek, the company expected profits in the third quarter to be higher than in previous quarters, with profit in the final quarter probably easing as production of aquatic business will by nature drop due to the cold weather.
CPF earned a record-high net profit in the second quarter of THB3.19 billion, a year-on-year gain of 224 percent and up from THB770.5 million in the first quarter. Sales for the second quarter increased nearly 4 percent to THB40.6 billion. Six-month net profit rose to nearly THB4 billion on sales of THB75.4 billion.
Danish Crown's beef division reports profits
Danish Crown's Beef Division reports revenue for the financial year of just over DKK3.1 billion and a net profit of DKK52.7 million. The Beef Division was also able to attract more animals than last year.
Lorenz Hansen, managing director of the Beef Division, said, "these are very satisfactory results in light of the very considerable challenges which we have faced during the year. The bottom dropped out of the hide market following the financial crisis, and for a long time prices were negatively affected. The meat market has also been significantly impacted by the global financial crisis. Consumers have had less money to spend, and this has meant fewer expensive steaks and more minced meat instead. All in all, this has put prices under pressure.''
On the positive side, the processing department in Sdr. Felding, the slaughterhouse in Husum and the rationalisations realised under DC Future have contributed to improved overall results. This will strengthen the competitive edge of the Beef Division in future.
Fonterra sells AFF stake to Arla
Fonterra has sold its 25 percent interest in UK joint venture AFF to majority owner Arla Foods of Denmark.
Fonterra Chief Financial Officer Jonathan Mason said the joint venture had been successful. However, Fonterra had determined the investment was no longer core to the long-term strategy, which is focused on growing value add ingredients sales and on regional consumer businesses in Asia/AME, Australia and New Zealand, and Latin America.
Mason said Fonterra would continue to license the Anchor brand to Arla and to supply New Zealand butter to generate returns for Fonterra's farmer shareholders.
Pas Reform signs agreement for new hatchery hygiene
Pas Reform has signed an exclusive agreement to incorporate Microban, an antimicrobial product protection system, into Smart hatchery technologies.
The agreement, signed this month, will initially see Microban technology incorporated into Pas Reform's patented hatcher baskets, reducing the risk of cross-contamination from food poisoning bacteria by up to 99.9 percent.
Pas Reform's leading Smart incubators have already incorporated smooth-walled, 'food-safe' anodised aluminium, stainless steel and polystyrene. Cooling circuits are fully integrated into the walls of the SmartHatch™ hatcher to reduce bacterial growth and accelerate efficient cleaning.
Sovereign Foods invests US$9.3 million in poultry business
South African agribusiness Sovereign Foods has invested US$9.3 million into its poultry processing plant and support services, creating a processing capacity of up to 60 million birds per year.
The company has invested nearly US$93 million in the processing plant, farms and hatchery over the past three years, and the equipment is able to process up to 12,000 birds per hour.
In total, the facility can process about 8,000 tonnes of chicken a month, with the capacity designed to process up to 12,000 tonnes a month. Sovereign Foods CEO Mike Davis said the downturn in the economy has boosted chicken demand, which in turn resulted in a steady increase in production at the plant.
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