Charoen Pokphand Group (CP) yesterday said 2007 consolidated sales would grow only 5 per cent to 10 per cent because of political turmoil and a poor economy slowing domestic consumption.

The group has enjoyed average annual growth rates of more than 10 per cent but negative factors will result in single-digit growth this year, it explained.

Thailand's biggest agricultural conglomerate runs the 7-Eleven convenience-store chain.

It reported total sales of US$14 billion (Bt484 billion) last year. Of that, almost 70 per cent was generated by its domestic agricultural business.

"An unstable political situation is the major factor causing a slowdown in domestic consumption," according to group vice chairman Ajva Taulananda.

"The group has forecast conservative growth this year because of weak consumer sentiment."

CP's core businesses are food, seeds, retail, telecommunications, trading, overseas investment, property and services. It operates in 40 countries.

The rising political tide against the government is a concern, Ajva said.

If it escalates to violence, economic growth could fall to 3 per cent, experts predict.

Already, growth estimates of gross domestic product are running at 3.5 per cent to 4 per cent for this year, down from 4 per cent to 4.5 per cent.

Ajva believed the recent freezing of assets of former prime minister Thaksin Shinawatra could "escalate the situation".

The current gloomy business environment will have downstream ramifications, Ajva said, noting companies had delayed spending and would encounter difficulties when production reached capacity.

"Many foreign investors have shifted investment to other countries such as Vietnam which are more politically stable," he said.

Thailand will slip further in competitiveness if it does not increase production capacity.

To maintain business growth, Ajva said the group would concentrate on expanding some core businesses such as retail, agri-industrial goods and property development in Vietnam, Cambodia, Laos, China and India.

Charoen Pokphand Foods senior vice president Supat Sritanatorn said it would launch four new products.

There is still demand for the company's products and it hopes to increase sales this year by between 10 to 15 per cent.

The division wants to increase its market share to 25 per cent from a current 17 per cent.

Thanakorn Seriburi, group vice chairman and chief executive of its auto and industrial group, expected sales growth in China of 10 to 15 per cent.

He said the rising purchasing power of the Chinese was a strong contributor to business growth there.

Last year group revenue from China was $5 billion - almost one in every four of its sales.

The group will continue to spend on its businesses on the mainland, including adding motorcycle-production capacity to 3 million units by 2010. It will achieve this by buying existing factories.

It is manufacturing drugs and developing property in Shanghai, Beijing and the eastern and southern areas of China.

It recently won a concession to develop 10 square kilometres in Beijing, Thanakorn said.

Suthorn Arunnanondchai, president and chief executive of Charoen Pokphand Land, expected it to list in Thailand in the next two years. It is spending Bt5 billion on developments this year.

Crop Integration Group vice chairman Eam Ngamdamronk said it was expanding into Laos, Cambodia, Vietnam, China and India.

Last year it sold Bt10 billion in seeds and it is aiming for 20-per-cent growth this year.

It is developing seeds with higher yields. Last year it introduced a seed which produces 1.5 tonnes of rice per rai from between 700 and 800 kilograms of seed.

The division is growing a new type of palm specifically for biodiesel production.

Thai Smart Card chief commercial and operations officer Chatchai Chatchaiganan said its cash-card service would achieve 100-per-cent growth to two million cards this year. Total spending on the cards is projected to reach Bt5.8 billion this year, up from Bt5.2 billion last year.

It is forming business alliances with partners including Bank Thai, SF Cinema and North University.

Petchanet     Pratruangkrai

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