News last update:6 Aug 2012

Thai firm steps up 2008 investments

The planned listing of its shares and a brighter industry outlook have encouraged Betagro Group to invest more in various farm projects this year.

Betagro, one of Thailand's leading agricultural groups, announced that it planned to use around four billion baht (€ 91.2 million) of its capital to finance the new investment, about 30% more than the three billion baht (€ 68.4m) spent last year.

''Farm prices, which nosedived in the first half [of last year], have improved significantly since the latter half,'' said Vasit Taepaisitphongse, executive vice-president and group chief operating officer in an interview with the Bangkok Post.

Chicken meat and pork prices started picking up in the second half last year, in line with the world market. Export prices of processed chicken shot up strongly by 30% to US$4,000 per tonne after a substantial decline in the first half last year due to the re-emergence of bird flu in late 2006 and the strong baht.

Limited shipments from China have also pushed up world prices and brightened the industry's outlook.

According to Vasit, the expansion plans have been outlined in accordance with the group's plans to list on the Stock Exchange of Thailand, probably in the second half of this year, after it had filed the application to the Securities and Exchange Commission in late 2007.

New processing plants
Part of the funds raised will be used to finance new projects including a number of small-scaled processing plants to supply food products to community stores such as convenience outlets.

Two new plants will also be added, one each for cooked chicken for exports and tailored pork products for retail channels.

He said it was no longer necessary for the group to build huge production plants as it already had two large complexes in Lop Buri, which house operations for feed meal, a slaughterhouse and processing plants for cooked chicken products.

Improve distribution officiency
''The investments from now would aim to improve distribution efficiency, make better and new food products and strengthen the brand,'' he said.

A logistics centre in Wang Noi, Ayutthaya, will also be set up to strengthen the distribution of these stores.

Offshore investments would be made to beef up the efficiency of its operations in the region after Thai Luxe Enterprise, its joint venture in Vietnam with local partners, has performed remarkably well in recent years. More processing plants will also be added and distribution networks expanded in Cambodia, Laos and Burma.

Increase market share
According to Vasit, the new projects will raise Betagro's sales revenue to 45 billion baht (€ 1.03 billion) this year. Of its revenue of around 34 billion baht (€ 776m) in 2007, chicken and swine products accounted for 80%, with animal health products, commercial feeds and regional operations making up the balance.

The expansion would also help turn Betagro into the second-largest agro-industrial company in the country after the CP Group. ''We aim to raise our market share in the farm business to 20% in the next five years from 15% today,'' he said.

At present, Betagro controls about 10% of the 12 million tonnes of animal feed sold annually, and supplies 2.5 million broilers per week, or 13% of the country's weekly broiler production of 18 million head.

Betagro is now counted among the top five in the chicken industry, exporting 40,000 of the country's total of 310,000 to 320,000 tonnes last year. In the swine industry, it processes about 1,600 pigs or 13.33% of Bangkok's daily total of 12,000.

Related article: Thai Betagro company on expansion trail

For regular updates on feed news subscribe here to our free newsletter

Editor AllAboutFeed

Or register to be able to comment.