Thai food manufacturer and farm operator Charoen
Pokphand Foods (CPF) plans significant investment to upgrade the manufacturing
technology of 10 animal feed mills nationwide to equal the high technology of
its Nakhon Ratchasima plant.
Viroj Kampeera, senior vice president of CPF subsidiary
Bangkok Feedmill, said the company planned to upgrade all 10 plants this year.
The company did not reveal an exact investment figure.
Ratchasima plant - manufacturing feed for chickens, pigs, ducks and cattle - was
built in 2002 with a production capacity of 1.2 million tonnes a year. However,
it is currently using only half of its capacity.
Technology used in the plant features an automatic
operating system, combining technology from Japan, Europe and the US that
ensures hygiene and requires only 50 workers. Operating costs are 20% cheaper
than in other feed mills. The mill required a Bt500-million (€11.3m)
The company has already spent almost Bt1 billion (€23m) on
the gradual improvement of the manufacturing technology in 10 plants in other
countries over the past few years. CPF has accumulated 120 feed mills in 11
countries with a combined production capacity of 24 million tonnes. The company
plans to upgrade the technology gradually in all of them.
CPF has plans
to set up its fourth and fifth animal feed mill in Vietnam and expand production
capacity in Cambodia. It will open a new plant in Laos in two months and another
in Russia. In Laos, it expects to establish a wholly owned plant rather than a
joint venture with a local partner. Each plant will cost about Bt500
The company does not plan to expand production capacity in
Thailand, because its current 11 plants already manufacture 6.5 million tonnes
annually, while total domestic demand is 10.5 million tonnes.
CPF's major competitors are the Betagro
Group and the Saha Farm Group, while smaller competition
comes from 100 small feed mills.
Generous marketing budget
In term of CP products for human
consumption, CPF senior vice president for marketing Suphat Sritanatorn said the
company had allocated a Bt100-million (€2.26m) marketing budget to build
awareness of all products under the CP brand this year. The company expects to
launch 30 new products.
CPF has adjusted its
website for a more modern look and is setting up a call-centre
system, said Suphat. The call centre is expected to commence operations this
year, the company plans to focus on giving out product samples in office
buildings, apart from advertising through major media channels.
exports to eight markets, including Singapore, Hong Kong, Taiwan, South Korea,
the US and France.
Tough year expected
In terms of the CP Group as a whole, the company
expects another tough year, said Teerasak Urunanon, CPF executive vice president
for food processing and integration. He said CPF's performance in the first
quarter experienced difficulties, due to a decline in prices of eggs, pork and
chicken. He is also worried about bird-flu developments, consumer spending and
an increase in raw-material costs this year. Teerasak said feed-mill revenues
last year was Bt120 billion (€2.71b), with Bt140 billion (€3.17b) expected this
The company will wait to see its second-quarter performance, and then
consider whether it must revise expected revenues downwards.
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