'From domestic consumption to exports expansion': Thailand’s CP Foods eyes ASEAN market growth
"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,” said Sooksunt Jiumjaiswanglerg, Chief Executive Officer for agro-industrial business and Co-President of CPF.
Citing growing demand from ASEAN countries, CPF will also concentrate on its export capabilities by developing both its domestic and foreign arms.
Overseas operations for CPF is expected to increase to make up 70% of all company sales within this timeframe.
“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,” reported a company statement.
CPF expects to achieve a growth target of 5% to 8% within this year.
Rising pig prices in Vietnam
Part of the company’s optimism comes from the increasing price of swine in the ASEAN region, particularly in Vietnam.
As of July 2018, live pig was priced at US$ 2.48 (VND 55,000) per kilogramme, doubling its price in 2017 to reach a record high. Vietnam Ministry of Agricultrure and Rural Development Department for Livestock Production head Nguyen Xuan Duong said that this price was the highest in the world.
He explained this to be a result of limited supply.
“The price of live pigs went down to US$ 1.30 (VND 30,000) per kilo last year the lowest in the last 10 years, following China’s halt to importing Vietnamese pigs. This led many people to abandon pig breeding, leading to limited supply,” Nguyen said to VIETNAMNET Bridge.
CPF’s parent company, CP, cultivates 7.25 million pigs a year. It also accounts for all the sows in the Dong Nai province, known to be the largest livestock producer in Vietnam.
CP supplies 40% to 45% of all pork in Vietnam’s southern region. Adjustments to the company’s pork prices tend to have significant effects on the swine market.
“Prices of pigs are increasing because big companies have decided to do it,” Nguyen Kim Doan, Dong Nai Province Husbandry Association chairman told Tuoi Tre (Youth) newspaper.
CPF also has an ongoing integrated poultry project in Vietnam, estimated to be worth around US$ 250 million. The project comprises feed mill breeding farms and a processing plant, projected to reach completion by the end of 2019.
Foreign investments in India
CPF’s announcement comes on the heels of its sister company Siam Makro’s launch of its Indian investment operations in January this year.
Over the next five years, Siam Makro intends to invest a total of US$ 141 million (Rs 1,000 crores) in India. It will also set up 15 distribution centres over the northern part of the country under LOTS Wholesale Solutions.
“We are confident that we will surely be able to enhance the modern wholesale sector in totality,” said Tanit Chearavanont, Managing Director, LOTS Wholesale Solutions.
CPF investments currently cover 17 countries and over four billion people.
