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News 349 views last update:6 Aug 2012

CPF plans large expansion into Laos

A new animal-feed and farming subsidiary with an initial capital of baht 310 million (€7.5 million) to supply the high demand for meat products in Russia, is to be established by Charoen Pokphand Foods (CPF), flagship of the CP Group agribusiness group.

The subsidiary, Charoen Pokphand Foods (Overseas) will commence operations later this year, according to Mr Adirek Sripratak, president and CEO of CPF, who added that a feasibility study had found great potential for the livestock business in Russia, particularly pork.

In an interview Mr Adirek said "Russia's population of 140 m consumes about 2.5 m tonnes of pork and a similar amount of poultry annually, but local production failed to meet the growing demand. CPF's investment would start with feed production and pork processing, which would benefit CPF's future business expansion."

An analyst at local Kim Eng Securities considered the impact on CPF's performance from the Russian investment would be long term, with a contribution to parent company revenue in three to five years. CPF's second quarter performance was expected to show a good recovery from the first quarter, but could be affected by the rising cost of fishmeal, and important feed supplement.

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