May 1, 2006

 

CPF to open shrimp complex

 

 

Thailand's Charoen Pokphand Foods Plc (CPF) would open its two-billion bath (US$53.4 million) hatchery and shrimp complex in Trat province in the third quarter this year, CPF president Adirek Sripratak announced Saturday (Apr 29) at a shareholders' meeting.

 

The complex would account for one-third of CPF's total investment budget for 2006. Sripratak said it would be an integrated plant with sophisticated bio-security measures to prevent disease.

 

The company expects to produce high-quality products to comply with strict food-safety regulations in developed markets such as the European Union.

 

As the shrimp complex is near an existing processing plant in Rayong, CPF would also be saving on logistics costs, Sripratak said.

 

With the major expansion in production capacity, revenue from shrimp would exceed those from chicken within three years, he added.

 

CPF shareholders approved the sale of the 40 percent stake held by affiliate CP Merchandising Ltd in the loss-making Lotus Supercenter in Guangzhou to Union Growth Investment (UGI), wholly owned by Chia Tai Enterprise International Ltd. Hong Kong-based Chia Tai is in turn 57 percent controlled by the CP Group's chairman and CEO, Dhanin Chearavanont.

 

Sripratak said the divestment was part of a plan to exit non-core businesses.

 

Lotus Supercenter in Guangzhou has incurred losses since 1994 but the divestment would mean a profit of around 1.2 billion baht (US$32 million) for CPF.

 

He projected reduced profits for the first quarter of 2006 compared with 2005 due to a drop in chicken sales.

 

CPF's net profit last year increased nearly five times to 6.7 billion baht, (US$178.9 million) from 1.23 billion baht (US$32 million) in 2004, at the height of the bird-flu crisis.

 

The company projects 10 percent growth in sales this year.