CPF’s five-pronged strategy for growth

By

SeafoodSource staff

Published on
January 8, 2012

Charoen Pokphand Foods’ (CPF) five key directions are taking it towards its goal to become first in the world in both feed-meal and integrated shrimp production as well as the leading food brand from upstream through downstream in the Asia-Pacific region.

Those key directions are: the goal to feed more than 3 billion people, become the leading corporate in the Asia-Pacific region, become the world's biggest or second-biggest producer of feed meal, become the world’s biggest integrated shrimp-farm operator, and boost the company’s market capitalization and earnings to shareholders.

On January 18, CPF will hold a shareholders’ meeting to seek support for the USD 2.174-billion acquisition of CP Pokphand Co (CPP), a listed company on the Hong Kong stock exchange. Through CPP, the company will be able to manage more feed meal in China and shrimp farms in Vietnam. This move is part of the company’s strategy to revise its business structure towards more synergy and competitive costs.

If the acquisition is approved, CPF will double its total sales to Bt300 billion this year and see average annual growth of 15-20 per cent in 14 countries. CPF will also strengthen its food-processing, feed-meal and farming businesses.

Adirek Sripratak, president and chief executive officer of CPF, said it currently did business in Thailand and 12 other countries with a total population of 1.5 billion. Besides the planned move into China and Vietnam, the company is also making aggressive efforts to access countries with fast-growing economies such as Russia, India and the Philippines. It also targets high-potential economies in South Asia including Pakistan and Bangladesh by focusing on feed meal for livestock and aquaculture animals.

“The approval from the shareholders will immediately [allow us to] double our sales this year, and sales are expected to grow by an average of 15-20 per cent through the next five years. Our revenue ratio between the domestic market and export will also change from 70:30 currently to 40:60” within the next five years, Adirek said.

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