December 22, 2008


CPF sees weak sales in 2009


Charoen Pokphand Foods (CPF), Thailand's largest chicken exporter, said its 2009 sales might grow by merely 5 percent or just flat from a forecast of 150 billion baht (US$4.3 billion).


The firm aimed for a net profit growth as falling oil prices helped lower costs of raw materials and transportation, chief executive Adirek Sripratak said during a visit to its plants along Thailand's eastern seaboard.


Adirek added that the economic crisis will continue to hurt purchasing power.


Its recent upgrades on machinery would further cut production costs and net profit margin for the year was expected to be around 3 percent, which was close to this year's.


According to analysts by Reuters Estimates, CPF sales are expecting a 5.9 percent rise in 2009 sales to 161.5 billion baht and about 1 percent increase in 2009 net profit to 3.37 billion baht.


Adirek added that CPF reported a consolidated net profit of 2.82 billion baht in the first nine months of 2008. Domestic sales contribute 60-65 percent of its revenues, exports makes up 16-18 percent and revenues from overseas attribute 16-18 percent.


While domestic sales would are seen to weaken next year, exports would expand about 10 percent on growing markets such as Japan and earnings contributions from overseas businesses would be higher, he said.


CPF operates a chicken business in Turkey, aquaculture businesses in Malaysia and India and a feedstock business in Russia. It planned to spend more than two billion baht each over the next two years on investment, about half of its normal annual spending of 5.0 billion baht, Adirek added.


CPF would focus on expanding its food processing business, increasing distribution channels, building product brands and investing in growing overseas markets such as Russia, he said.


Adirek added that CPF would fund its planned investment by cash and would delay a planned bond issue worth 3.0 billion baht to next year due to an unfavourable market condition.


US$1=34.45 Baht (Dec 22)

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