|
 The Asian food giant is also benefiting indirectly from the conflict
in Ukraine: after Moscow imposed a ban on many food imports from
Western countries in retaliation for their sanctions, some Russian
firms turned to CPF for chicken.
The resulting demand for exports has boosted meat prices in Thailand
and that could help CP Foods post revenue growth of 15 percent this
year, higher than its target of 10 percent, said President and CEO
Adirek Sripratak.
"We have received orders from McDonald's. Strong demand for exports
helped push up chicken prices and the company will move orders from
the domestic spot market to export to customers," he told Reuters in
an interview.
Regional companies including Japanese firms turned to Thailand for
chicken after Shanghai Husi Food, a unit of U.S.-based OSI Group LLC
[OSIGP.UL], was accused in a TV report of having improperly handled
meat and using expired food.
McDonald's has said it had shifted business to Thailand by boosting
purchases from existing suppliers McKey Foods Services (Thailand)
Ltd, a unit of Keystone Foods, and Cargill Thailand.
"The industry is short of supply and we've got a full order book now
as people are asking us to accelerate our shipping after the China
food scare," Adirek said. "This is a good opportunity for CPF."
"Russia is very keen to buy chicken from us. They contact us every
day and they want to secure food supplies," he said, adding CPF was
negotiating on prices and the volume of exports.
CPF, which already exports to Japan and Russia and is a major
supplier to KFC fried chicken restaurants in Thailand, has
integrated operations and as a result can enforce safety and quality
controls to minimize the supply chain risk, Adirek said.
Its chickens are raised in a closed, hygienic farming system, he
said, with all visitors required to wear special outer clothing to
prevent the spread of disease.
The CP Group says it adopts the same system and standards on its
chicken farms in China and that consequently it has not been touched
by the food scare there.
[to top of second column] |
EXPANDING ABROAD
CPF, owned by billionaire Dhanin Chearvanond's Charoen Pokphand
Group, is looking for opportunities to buy assets in high-growth
emerging markets to achieve its annual revenue growth target of
10-15 percent over the next five years, Adirek said.
It already runs feed businesses, farms and food processing plants in
13 countries, including India, and tries to sell its products
domestically, in part to avoid any problems from trade barriers.
Foreign operations contributed 58 percent of its first-half revenue
of 204 billion baht ($6.41 billion), with another 36 percent coming
from the Thai market and 6 percent from exports.
The recently announced $1 billion tie-up with Itochu Corp <8001.T>,
one of the top three trading firms in Japan, will not only help CPF
secure lower prices for raw materials but will also help it expand
into Japan and China, he said.
Among its many businesses, Itochu is an operator of Family Mart
convenience stores in China and other countries.
"Having this connection with Itochu will help us sell products in
Family Mart. For Itochu, which has invested in 250 Japanese firms,
this will provide an opportunity for them to expand into the Thai
market because growth in the Japanese market is slower," he added.
(Reporting by Khettiya Jittapong and; Manunphattr Dhanananphorn;
Editing by Alan Raybould)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed. |
