Cafta opening investment doors for CP

The China-Asean Free-Trade Agreement (CAFTA) will open up a free flow of trade in goods and investment between the two sides.

 

CP plans to set up a one-stop industrial park in Rayong province that will draw mainly Chinese investors. The investment could come in any form, such as a joint venture wholly owned by the group or Chinese investors.

 

Chairman and CEO Dhanin Chearavanont said the group had set a capital-expenditure budget of Bt40 billion (app. €862 million) for this year that would focus on Thailand. Local investment will take up Bt30 billion (€646m) at most, with the rest used abroad.

 

"Thailand still has plenty of room for expansion, thanks to record-high foreign reserves and a rebounding economy," he said. CP will focus its investment on Thailand for a few years before looking abroad.

 

Its investment in China will be higher than in Thailand, because the economy there is growing and the purchasing power of its people rising. The focus in China will be on food and retail operations.

 

CAFTA will create opportunities for CP. A special industrial estate for Chinese investors will be set up, with all facilities included as a one-stop service.

 

"We’ll select good Chinese companies to invest in the industrial estate. Particularly, their business should be environmentally sound and their manufacturing hi-tech," Dhanin said.

 

Dhanin said CP still saw a bright future for the farm sector – not only food for human consumption, but also fuel crops. The group is studying the energy business, particularly ethanol manufacturing using sugar cane as the feedstock, rather than cassava.

 

Crop prices are rising for both food and fuel, due to limited land area, a growing economy and declining natural resources, he added.

 

Prasit Damrongchietanon, CEO of CP’s International Trading Business Group, said the trading group planned to double its revenue to Bt50 billion (€1,076m) this year, thanks to rising commodity prices.