August 29, 2018

Thailand's CPF targets business growth in foreign markets

Charoen Pokphands Foods PCL (CPF) plans to generate more business growth from overseas operations, and focus on increasing capacity in Thailand and foreign bases to serve export market.

The company cites growing demand internationally, especially in ASEAN market, as the impetus for its strategic decision.

The company also expects better performance in the second half of 2018 as a result of improved performance in swine and aquaculture businesses.
 

Sooksunt Jiumjaiswanglerg, CPF's chief executive officer for agro-industrial business and co-president, said the company will move towards overseas growth. The ratio of total sales from overseas operation and Thai operation, including exports, will shift from 68:32 in this year to 70:30 in the next five years.

"CPF's direction will focus on export sales expansion. The company's foreign operations are going to shift from mainly domestic consumption to more exports. So far, its production already bounds for more than 30 countries around the world, and will expand the production to increase export sales. The company believe this strategic decision will help us to reach our target growth," said Jiumjaiswanglerg.

Under the expansion plan, it will focus on the integrated poultry project in Vietnam, worth nearly US$250 million, including feed mill breeding farms and processing plant. The plant will be completed by the end of 2019. Processed chickens from this plant will export to other Asian countries such as Japan.

Jiumjaiswanglerg expressed optimism that the company's performance in second half of 2018 will be brighter than the first half. The growth will be driven by continuous recovery in Vietnam's pig prices and improved sales in aquaculture business.

He noted that CPF's overseas operations in the first half 2018 showed profitable performance, especially in the Philippines and India. Performance in Turkey also improved, which came as a result of business restructuring mainly on animal feed and processing food.

The outlook in the second half of 2018 is forecasted to outperform the first half of this year. The main two contributing factors driving business growth are pig prices - particularly in Vietnam - which are increasing and would back to normal in the second quarter this year, as well as CPF's aquaculture businesses in Vietnam, India and Thailand.

Those factors will encourage a positive business environment for CPF for the rest of the year. CPF thus sees that operational results will achieved a growth target of 5-8% this year.

The company's current investment in 17 countries includes Thailand. Most of its revenue comes from overseas, such as China and Vietnam.

- CPF