July 30, 2013


Charoen Pokphand Foods eyes Vietnam, China for swine breeding


Charoen Pokphand Foods (CPF) is now eyeing foreign markets for swine breeding, particularly Vietnam and China, due to disappointment in the domestic pork market.


"Annual pork consumption in Thailand is 13-14 kilogrammes/person, which is much lower than that of Vietnam and China at 22 kilogrammes (kg) and 40 kg/person," Somkuan Choowatanapakorn, executive vice president for swine breeding and farming research and development, said last week.


CPF was counting on THB20 billion (US$640 million) in revenue from the swine department this year. However, the last six months did not reach half the target due to the high cost of feed, accounting for 65% of total cost, and the low price of pork. And the second half is not promising either, as consumer purchasing power has faded, he said.


CPF has been expanding its pig farms to many ASEAN countries such as Cambodia and Myanmar for 20 years, as raw pork cannot be exported to those countries due to hand, foot and mouth disease.


Expansion in Thailand is not easy because of limitations in regulations that decentralise power to local administrations, which vary from place to place. Sometimes public hearings have to be held.


"The misperception that pig farms are smelly leads to a negative result even though CPF has solved such problems," he said.


Now, all of CPF's pig farms in Thailand are free of odours due to an effective ventilation system.


The image of pig farms has changed under CPF's green policy aimed at cutting down greenhouse gases, lessening the bad odour and increase efficient resource usage. Thailand will be the centre for R&D before such technologies are applied in other countries.


"The spike in the pork price in the local market recently was the result of a decline in supply," he said.


Annual pig demand is normally 15 million heads worth about THB100 billion (US$3.2 billion) with CPF commanding 20% of the market. The pork market is very sensitive as a small change in production can tremendously affect prices.


Porcine epidemic diarrhoea and porcine reproductive and respiratory syndrome are two viral diseases that caused the recent shortfall in supply. CPF has to be careful about protecting quality to prevent such infections.


The government should not impose agricultural zoning that would cluster pig farms in the same areas, as that would make them susceptible to the spread of viral diseases, he said. A better way is to combine pig farms with plantations like sugarcane and palm plantations, which could benefit from the pigs' by-products.