Charoen Pokphand targets Russia for swine growth
Expansion of overseas operations is the focus for Charoen Pokphand Foods Plc, (CPF) now that the Thai economy has reached its "turn-around stage" says Adirek Sripratak, president and CEO of Thailand's largest listed food processor.
On target this year and next is the 2.5 billion baht (€ 52.5 million) expansion of its overseas operations in Russia, India, Turkey, Malaysia, the Philippines and Laos.
The investments are distributed as follows:
• Russia: 1 billion baht (€ 21 million) for a feed mill and integrated pig business in Lukhovitsy County in Moscow.
• Turkey: 500 million baht (€ 10.5 million) for a chicken processing factory.
• India: 500 million baht (€ 10.5 million) for a livestock feedmill factory and hatchery farm in Tamil Nadu and Pune. • Malaysia, the Philippines and Laos: The remaining allocated investment funds are for expansion of operations in these three countries.
Expansion of foreign operations would lift sales overseas at a time when the economy is poor at home, said Sripratak.
Swine expansion in Russia
At the end of last month, CPF officially launched its feed mill and integrated pig business in Lukhovitsy County in Moscow, run by Charoen Pokphand Foods (Overseas) Co. The company's feed mill mainly produce feed for pigs, chicken and cattle with a capacity of 240,000 tonnes a year.
According to Sripratak, apart from the feed mill, the company plans to invest US$100 million (€ 72 m) over the next five years in animal feed and farming businesses in Russia.
CPF plans to produce one million pigs per year by 2014. Under the first phase of the plan, two farms are now under construction, the first being a breeder operation with capacity of 2,400 sows, and the second a pig farm with a capacity of 18,000 pigs.
Russian demand for pork is currently 2.75 million tonnes per year while local animal production capacity is only 2 million tonnes. Therefore CPF has an opportunity to develop a business that will substitute for imports and create demand for its feed products as well.
Sripratak said that after Russia, the company would look to invest in Ukraine and Eastern Europe.
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