December 10, 2010

Charoen Pokphand eyes on China, Vietnam expansion

Agribusiness giant Charoen Pokphand Group (CP) is seeking to expand foreign investment in China and Vietnam, focusing on agriculture, real estate and retail.

Thanakorn Seriburi, chairman and CEO of the automotive industrial products business group (China) of CP Group, said next year it plans to team up with Luoyang city in Hainan province to develop a super complex on 115 rai of land.

Construction of the complex will cost about THB15 billion (US$498.67 million) and kick off next year, with an expected completion date of six years. The group expects the project will break even three years after commercial operation.

Mr Thanakorn added the group also plans to list Shanghai Kinghill Co on the Shanghai stock market in early 2011 to mobilise funds to expand its retail and property-development business in China.

Sarasin Viraphol, the group's executive vice-president, said next year it plans to invest THB20 billion (US$664.89 million) in chemical-free vegetable production and distribution businesses on 8,000 rai at Cixi city in China's Zhejiang province, using sophisticated technology from plantation processes to harvesting to supply consumers mainly in Shanghai.

Mr Thanakorn said CP's businesses in China are expected to generate income of US$6 billion this year, a gain of 10-15% from last year. Next year's growth rate is forecast to be the same as this year.

In a related development, Sooksunt Jiumjaiswanglerg, executive vice-president of the agro-industry and food business group in Vietnam, said CP planned to set up four more animal and shrimp feed plants in Vietnam, as well as processing plants over the next five years. This increase from five plants will raise production capacity to four million tonnes a year from 2.5 million.

It will spend US$150-200 million to construct shrimp feed plants, cold storage and chicken-processing plants in Vietnam. The investment is part of the group's plan to increase Vietnam operations by 100% to US$3 billion a year over five years.

CP Group expects its revenue to grow by 20% this year from about THB600 billion (US$19.95 billion) in 2009, with half from exports.