Virachai Ratanabanchuen, left, vice president of Charoen Pokphand Foods, and Katsuhiko Ishino, president of Yonekyu Corp, preside over the grand opening yesterday of the CP-Yonekyu plant in Chachoengsao.

The joint venture with Yonekyu has also encouraged CPF to focus more on pork products after achieving its goal of becoming an integrated chicken producer and exporter. The companies set up CP-Yonekyu in 2005 with registered capital of Bt200 million. CPF holds a 75-per-cent stake.

Investment in the joint venture, including the establishment of the Chachoengsao factory, was Bt530 million. The plant will produce pork products such as sausage, ham and kakuni. Capacity is expected to be 200 tonnes per month, and products will be marketed under the CP-Yonekyu brand.

Virachai Ratanabanchuen, executive vice president of CPF, said the joint venture would strengthen the company's pork exports, particularly in the Japanese market.

"We had many trials and errors with many losses before deciding on Yonekyu. We believe that our partner will encourage our business vision to focus on finished products, brand strategy and supply-chain and logistics management," Virachai said.

The target is for 80 per cent of products from the new plant to be exported.

"If pork products continue to be successful for two to three years, we will expand our investment," Virachai said.

In addition, the company has space to expand the plant in the future with an investment of Bt60 million to Bt70 million. The second phase will be launched after the European Union announces its regulations for imported pork.

Katsuhiko Ishino, president of Yonekyu Corp, said Thailand was the first country in Southeast Asia in which it had formed a joint venture. Its only other joint venture outside Japan is in China, where it has two plants. Yonekyu has no plans to enter other countries in the region.

"We invested in Thailand because of three main reasons: Thailand is an agricultural country where food safety and quality are highly controlled, our partner CPF is an integrated manufacturer, and high-quality human resources which will benefit our consumers," he said.

Ishino added that the investment was part of the Japanese government's policy to invest in the region. Yonekyu's investment here had not been forced by its competitors and he expected it to improve the company's business efficiency.

"The investment in Thailand will strengthen our competitiveness in Japan in terms of price," he said.

Yonekyu has only two plants in Japan, which are not enough to serve domestic demand.

Products from Thailand will be exported not only to Yonekyu but also to its customers in the United States and China.

Pork consumption in Japan is one million tonnes per year. Of that, fresh meat accounts for 50 per cent and the rest is comprised of pork products.

Yonekyu is the fifth-largest Japanese distributor of pork and pork products, with fresh meat accounting for 58 per cent of its sales.

Despite waiting for implementation of the Japan-Thailand Economic Partnership, Ishino said he hoped that the agreement would bring down import tariffs on pork products to lower than the current rate of 25 per cent.

CPF is planning to expand its number of high-standard pig farms to ensure a supply of good-quality meat to the Chachoengsao plant. It also plans to award more contracts to farmers whose farms have been certified by the Livestock Development Department.

Achara Pongvutitham

The Nation

Chachoengsao