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News 1159 views last update:6 Aug 2012

Company update: Charoen Pokphand China

The Chinese division of Thailand based global animal feed and food conglomerate Charoen Pokphand reported a profit of US$ 132.8 million in 2010, more than 14 times the profit of 2009.

C.P. Pokphand Co. Ltd (CPP), the leading animal and aqua feed producer in China, has announced its annual results for the year ended 31 December 2010.
 
CPP reported a profit attributable to owners of US$132.8 million (2009: US$8.6 million), representing a year-on-year increase of 14.5 times.
 
Total turnover reached $1,950 million, 94.3% of which was attributable to the feed business while the Chlortetracycline (CTC) business accounted for 5.7%.
 
Overall gross profit margin increased to 15.9%.
 
Strong in feed
Since completing the acquisition of a feed business in China from the parent company in late February 2010, the Group has strengthened its competitive edge in the feed business and has achieved significant enhancements in its operational results.
 
Feed revenue for the ten months to 31 December 2010 rose to approximately $1,840 million on sales of 3.76 million tonnes of animal feed products.
 
By product categories, complete and concentrate feed accounted for 91.7% of total turnover of all feed products while swine, poultry, aqua and other animal species contributed 38.7%, 38.2%, 10.9% and 3.9% respectively, while premix feed accounted for 5.6%.
 
The Group also reached a feed mill leasing agreement with the parent company in October to further enhance production capacity.
 
Greater nutritional value
Through committed R&D efforts, the Group developed and promoted a series of products that are grouped in Nutrition Systems to meet the changing nutritional requirements of growing animals through different stages of development.
 
These products of greater nutritional value have improved the productivity and efficiency of livestock farmers.
 
Chlortetracycline
In 2010, the Group's CTC business grew strongly as turnover rose 50.4% year-on year to $110 million, of which domestic sales and exports accounted for 24.8% and 75.2%, while feed-grade CTC and Hydrochloride CTC contributed 71.9% and 28.1%, respectively.
 
Industrial business continued to grow as profit rose 11.7% year-on-year to $14.7 million on the back of booming infrastructure investment and strong demand for automobiles.
 
Looking ahead, a growing demand in China and throughout the region for quality food products, coupled with increasing awareness of food safety, will continue to fuel the demand for quality and safe feed products to the benefit of the Group.
 
Enhancing production capacity
CPP has signed an agreement on the leasing of four feed plants from its parent with an aim of enhancing production capacity.
 
The Group will optimize plant production by assigning specific production lines to produce specialized high value nutrition products.
 
Furthermore, the Group will increase investment in R&D while continuing to monitor raw material price trends through centralized procurement to strengthen and improve overall efficiency.
 
In addition to developing the Chinese market, the Group's management will also focus on investment opportunities overseas in order to further advance the long-term interests of its shareholders.
 
C.P. Pokphand is the leading feed producer in China. It has established a significant presence in 28 provinces and municipalities in China and has more than 26,000 exclusive agents distributing its products nationwide.
 
 

Dick Ziggers

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