Monday, April 7, 2014

CPF Group aims for big growth in next five years

    Bangkok-based meat and animal feed producer Charoen Pokphand Foods PCL (CPF) is striving to meet demand in fast-growing emerging markets, and aims to have foreign operations contribute three-quarters of revenue within five years. The company targets average annual growth at 10-15 percent.
    CPF predicts rising incomes in Southeast Asia will increase demand for meat. The company plans to expand its feed and farm business in Vietnam, the Philippines, China, India and Russia.
    "In the next five years, Asian demand for protein-rich food will increase as the emerging economies are growing, raising people's income," Chief Executive Adirek Sripratak said at the Reuters ASEAN Summit on March 28.
    "Growth in emerging countries will surpass that of the domestic market. We have seen strong growth potential and that's why we have been aggressive in foreign investments in recent decades."
    In Thailand, political unrest has slowed economic growth, but CPF expects foreign operations to cushion that impact. Domestic sales growth is likely to average 7-8 percent over the next five years compared with 15 percent abroad, Adirek said.
    The company also plans to raise capacity at its feed, farm and food businesses over the next four years by investing 50 billion baht ($1.6 billion).
    Last year, CPF's net profit hit a decade-low of 7 billion baht due to increased costs, weakened meat prices and the impact of a shrimp disease on its farm business. That is expected to turn around this year as swine and broiler prices have risen and corn feed prices have fallen.
    Shares of CPF, valued at $6.7 billion, have fallen 13 percent in the past three months, compared with a 4 percent rise in the broader market.

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