CPF plans 10-year move away from commodities
Thailand's biggest food and farm operator and exporter, Charoen Pokphand Foods (CPF), has launched a 10-year business plan aimed at reducing the proportion of revenues from its farms and focusing more on finished and branded products.
The company wants to reduce the high risks of dealing in commodity goods and has committed an average investment of Bt4 billion to Bt5 billion a year to boosting its exporting and retailing plans. CPF plans first to balance the revenues received from farm goods on one hand and from finished products on the other. At present, its revenues from chicken meat, pork, shrimp, eggs, breeders, ducks and fish account for 30 per cent of total domestic sales. Finished and branded goods account for only 5-10 per cent, which although small, generate high added value. CPF drew up its future plan after successfully restructuring its business and forging ahead with development after the 1997 financial crisis. The company learned to focus on its core business, brand-building and offshore investment to ensure its goals as a global player. The strategy has made CPF the CP Group's flagship business in the farm and food sector. The company reported consolidated sales of Bt124.93 billion last year. Of that, 69 per cent came from the domestic market and the rest from exports and foreign investments. The company now seeks to achieve a 50:50 ratio between domestic and foreign revenues within the next five years. President and CEO Adirek Sripratak called commodities a high-risk business that could easily be damaged by many factors, such as the environment, disease, oversupply and trade barriers. CPF is trying to avoid factors that are beyond its control. The basis for the policy change is the company's experience over the past 10 years, during which Thailand recovered from the economic crisis. CPF has gradually developed business plans focused on sustainable growth. He said in the future, investment would focus on research and development, human-resource development and support for the company's forays into potential international acquisitions. "Revenues from exports should increase from 12 per cent at present to 15 per cent in the near future, thanks to our new focus on offshore investment," he said. The company's planned expansion into retail under the CP brand, both domestically and in export markets, will encourage the rapid achievement of brand loyalty, and in order to support its retail distribution, the company is considering expanding its distribution and logistics networks, Adirek said.
Achara Pongvutitham The Nation
|
