July 8, 2004

 

 

Charoen Pokphand Foods To Boost Output Of Cooked Chicken

 

Charoen Pokphand Foods Plc, Thailand's biggest publicly traded poultry exporter, plans to cook 20,000 metric tons more chicken a year after the second outbreak of bird flu in a year threatened its raw meat sales.

 

Thailand confirmed two incidents of bird flu yesterday, the first since April. China on Tuesday said it detected a deadly strain of the virus in its flock, raising concern of a pan-Asian epidemic like one earlier this year that killed at least 22 people and led to the slaughter of more than 100 million fowl.

 

Charoen Pokphand will boost production of cooked meat to about 90,000 metric tonnes a year, chief executive Adirek Sripratak said. Focusing on more cooked meat ¨C the virus is rendered harmless by heat ¨C probably helped the company turn to a profit in the second quarter after posting a loss in the previous three months, Adirek said.

 

"As a producer of processed chicken they have made a name for themselves," said Maria Brenda Lapiz, an analyst at Finansa Securities. "Very few companies can produce processed chicken and importers are running out of places to buy," so Charoen Pokphand should benefit.

 

Charoen Pokphand's shares fell 1 percent to 3.9 baht after declining as much as 6.1 percent earlier in the day.

 

The company reported a loss of 598 million baht in the first quarter. The company will announce its second-quarter earnings by August.

 

Demand for the company's cooked products is increasing because customers are happy with Charoen Pokphand's monitoring systems, Adirek said. The company had also increased local sales of pork meat and eggs.

 

"The government has got better in controlling the virus, but problems still happen," Adirek said.

 

Charoen Pokphand is planning to start exporting pork meat to Japan in a bid to lower its dependence on chicken exports.

 

The company also forecasts a 30 percent rise in shrimp exports this year because of rising demand from Japan, South Korea and Australia. The company does not export to the US and would not be affected by any imposition of duties on shrimp exports to the US from China and Vietnam, Adirek said.

 

The US Commerce Department proposed duties of as much as 113 percent on imported shrimp from China and as much as 93 percent on those from Vietnam, in a preliminary decision on a complaint by US harvesters and processors. The US will make a decision on complaints against Thailand, Brazil, India and Ecuador at the end of this month.