May 15, 2020

CP Foods projects record high profits due to record pork prices

Prasit Boonduangprasert, Charoen Pokphand Foods Pcl (CPFoods) chief executive said the company also plans to expand to North America, reported Reuters.

A pork supply shortage caused by a global African swine fever (ASF) outbreak among major swine producing countries have caused rising record prices for the meat.

The CP Foods chief executive said this may be the company's best performing year because of high pork prices, recovering chicken prices and lockdown measures easing, allowing restaurants to reopen.

He said pork prices have doubled since ASF was first discovered.

CP Foods reported a 6.11 billion THB (~US$190 million; 1 THB = US$0.031) net profit in the first three months of this year, a 43% rise compared to 2019, thanks to surging pork prices in Vietnam and Cambodia.

The company benefitted from Canada-based Hylife, which it purchased in 2019, as well as lower raw material prices like corn.

CF Foods will invest about 20 billion THB (~US$623 million; not including mergers and acquisitions) and is proposing to expand its pork business to the United States and Canada. He said the company plans to export pork from Canada to China, which has seen increased demand for the meat due to ASF.

CF Foods will also grow its delivery fleet of 500 bikes to support is ready-to-eat meal distribution in Thailand.

Prasit said CF Foods aims to sustain a 18% gross margin for up to two years. The company's revenue target for 2023 is 800 billion THB (~US$24.9 billion), an 8% to 10% annual growth. Operations based overseas provides 75% of the company's revenue, up from the current 68%.

-      Reuters