August 7, 2012


Charoen Pokphand Foods anticipates E-Mart to boost revenue



In the first year of their partnership, Charoen Pokphand Foods Plc (CPF) expects, the Seoul-based E-Mart, will garner an additional THB1 billion (US$32 million) in sales revenue, climbing to THB10 billion (US$318 million) annually within five years.


The two companies signed a memorandum of understanding in March for the distribution of CP-brand ready-to-eat meals and frozen foods at 150 E-Mart hypermarkets and its E-Mart Everyday supermarket chain in South Korea.


Pisit Ohmpornnuwat, an executive vice-president of CPF, said the cooperation is a pilot project for the company ahead of forming other such partnerships with foreign traders and retailers.


He said CP-brand products will be selected that fit the format of the South Korean retail giant, which also features online sales via its E-Mart Mall in addition to seven branches of E-Mart Traders. CPF's ready-to-eat products presently are already distributed in 20 countries.


Export sales will account for 20% of the annual revenue total by 2016 from 13% of last year's THB206 billion (US$6.5 billion). The company recently embarked upon an aggressive expansion including payment of THB66.3 billion (US$2.1 billion) for control of the Hong Kong-listed CP Pokphand Co.


That firm's two main businesses are animal feed in China and integrated-farm operations in Vietnam, both of which regularly turn in strong performances.


Meanwhile, Adirek Sripratak, CPF's president and chief executive, said the severe drought in the US will lead to soaring prices of soymeal and corn, the main ingredients of animal feed.


However, he said the company has managed the risk by importing large quantities of soymeal in advance, and he expects local corn production will be sufficient for local livestock.


CPF shares closed yesterday on the SET at THB33.25 (US$1.06), unchanged, in trade worth THB445 million (US$14 million).