Charoen Pokphand Foods Plc (CPF) in Thailand is moving ahead with its overseas investment worth at least 30 billion baht over the next five years as part of its ambitious plan to raise foreign revenue contributions to 40% by 2015.
“We are committed to investing 6 billion baht a year over the next five years to expand production of animal feed and livestock at home and overseas,” said Adirek Sripratak, CEO and president of CPF. “Over 60% of that amount will go overseas, largely to expand existing operations in Russia, India, Turkey, the Philippines, Malaysia and some African countries.”
“Overseas operations played a vital role in the company’s sales growth for the first six months of the year, with that sector surging 91% while Thai operations grew at the relatively slower pace of 7%”, he says.
For the first half of the year, the company reported total sales of 91.47 billion baht, an increase of 21% from the same period last year. Net profit for the period rose 82% to 7.22 billion baht and was partially supported by income distribution from affiliates such as CP All Plc, the operator of 7-Eleven convenience stores, in which CPF holds 27%.
For the second quarter, the company posted a net profit of 4 billion baht, a rise of 25.3% over the same quarter last year on total revenues of 48.49 billion baht, an increase of 18.47%.
Mr Adirek says the surge in sales revenue could be attributed to higher food product sales and rising overseas income. As of the second quarter, overseas operations made up 27% of the company’s sales, with exports accounting for 13% and domestic sales 60%. According to the company’s five-year plan, CPF aims to raise the revenue contribution from overseas operations to 40% with exports making up 20% and domestic sales 40% and expects to post a record profit of more than 12 billion baht this year, up from its record net profit of 10.19 billion baht for 2009, up by 226% from the previous year, with sales revenue up by 6% to 165.06 billion baht.
Revenue will be close to 180 billion in 2010, and CPF expects it will rise by an average of 10% over the next five years.