November 30, 2010

CPF aims 2011 growth surge with new Jade fish product

Charoen Pokphand Foods Plc (CPF) is eyeing a more aggressive expansion for its processed food business with the new Jade fish product, aiming to lift its revenue growth from the sector to at least 25% by 2011.

Growth is expected to be driven particularly by "Jade fish," a new product the company took four years to develop, said Somsak Hongsrichinda, consultant to the president and CEO of CPF.

The Jade fish has been cultured for several years in Phetchaburi and Prachin Buri using CPF's proprietary technology. The fish will be introduced as fillets, ready-to-eat meals and freshly caught, mainly through leading supermarkets and CP Fresh Mart, in May next year.

CPF is determining a price for the fish and aims to sell about 400 tonnes next year. Pricing is expected to be similar to salmon, he said.

CPF also sells Nile tilapia (pla nil), red tilapia (pla thapthim), and sea red tilapia. Fish is a key part of CP's food business development plan as it sells 70,000 tonnes of fish products a year.

The restructuring aims to increase revenue from the food sector to 30-33% of the total from about 20% this year. Animal feed already generates 35%, which it expects to maintain.

Farming revenue, particularly from chicken and duck farms, would be pared from 47% to one-third as well.

In the first nine months, CPF's sales were THB141.76 billion (US$4.69 billion), an increase of 19% from a year earlier. Net profit rose 42% on-year to THB11.51 billion (US$0.38 billion). Sales from overseas operations increased to 27% of total sales, while revenue from exports accounted for 13%. The remaining 60% came from domestic sales.

CPF expects sales revenue of THB185 billion-THB190 billion (US$6.12-$6.29 billion) by the end of this year, up from THB165 billion (US$5.46 billion) in 2009, thanks to not only strong results of overseas operations but also high meat prices, especially for shrimp products.

Its processed food business is estimated to be worth THB20 billion (US$0.66 billion) this year, a rise of 36% from 2009. About THB7 billion (US$0.23 billion) comes from domestic sales, with the rest from exports. Sales growth has stemmed mainly from sausages and other product lines such as shrimp wonton soup and egg noodles.