February 28, 2014

Charoen Pokphand forecasts 10% rise in 2014's total sales




In 2014, Charoen Pokphand Foods' (CPF) total sales were projected to grow by at least 10% to more than THB450 billion (US$14 billion) and net profit is expected to grow significantly over the disappointed earnings result in 2013, according to Adirek Sripratak, CPF's president and chief executive officer.


Last year, sales grew 9% to about THB389.25 billion (US$12 billion), while net profit dropped 60% to THB7 billion (US$214 million), the lowest in 10 years of the company's operation. However, if combined with acquiring stakes in three companies abroad, the firm's accounting balance posed a net-profit drop of 30%.


The drop in profit was attributed to the serious spread of early mortality syndrome (EMS) on shrimp production, as well as the oversupply of chicken and pork in Vietnam, Turkey, India and Thailand, amid a sharp rise in the cost of raw materials.


In general, CPF's business performance has posted annual growth of 10-15%. Last year, it acquired 60% of CP-Meiji, 69.7% of a pig farm in Russia (RPBI), and 80% of Top Foods, a high-tech meat processor in Belgium.


Recently, the firm also announced an investment in BHJ, a leading international supplier in Sweden, by purchasing a 29% stake.


Adirek said performance would be boosted this year by a drop in raw-material costs, rising prices of meat products, and an easing of the EMS problem. More important, Japan has cancelled a ban on fresh chicken meat from Thailand imposed years ago over fears of bird-flu contamination.


The company has focused on securing its sustainability for the long term, integrating its business from upstream to downstream and creating a strong value chain. Acquiring stakes in other companies would also help strengthen its related businesses. Over the next five years, the firm will eye foreign markets to consolidate its performance. Sales overseas, which include exports from Thailand and its plants in other countries, are projected to increase to 75% of the total, from 66% at present.


Over the next five years, total sales are projected to reach THB700 billion (US$21.5 billion). CPF has an investment budget of THB50 billion (US$1.5 billion) for the period, more than half of which is to go into foreign markets. To date, the firm has invested in 12 nations worldwide. Its exports from Thailand are shipped to 40 nations, especially to Europe, North America and Japan.