May 7, 2008

CPF may benefit from OIE chicken export certificate
 

Charoen Pokphand Foods (CPF) is likely to benefit the most should Thai companies receive World Organisation for Animal Health (OIE) certificate for the resumption of frozen chicken exports, according to a report by The Nation.

OIE experts had visited Thailand to test Thai frozen chickens with the results to be released in the next few months, according to the head of Thai Department of Livestock Development.

Thailand has declared itself as bird flu free after no outbreaks of the deadly virus were reported over the past 90 days. Once OIE gives its certification, Thailand would be able to export frozen chicken. Currently, Thai chicken producers are only allowed to export cooked chicken.

This could be a great opportunity for CPF but the company would have to ensure that it has sufficient stocks for export, according to an analyst at United Securities.

CPF currently slaughters 4-5 tonnes of chickens per week and produces 120,000 tonnes of cooked chicken per year. The shift of focus to cooked chickens is attributed to the bird flu outbreaks, as the EU banned imports of frozen chicken from countries stricken with the disease, the analyst said.

The company's sales-revenue growth target this year has been pushed up to 15 percent from its original 8-10 percent by CPF executives. United Securities also increased the company's total revenue and net profit estimates for the year to THB 157.1 billion (US$4.9 billion) and THB 3.6 billion (US$113.5 million) respectively.

However, an analyst from Phillip Securities said that although CPF would benefit from the resumption of frozen chicken exports, the EU are likely to prefer cooked chickens.

A source from CPF said it is too early for the company to resume frozen chicken exports as the EU's bird flu free measure requires a 9-month waiting period.