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Published on November 10, 2007

About 100 billion yuan (Bt459 billion) will be spent restructuring agriculture in these areas.

Financed by the Chinese Development Bank, it will bring modern technology to rural China.

The CP group's China arm, Chia Tai, already supplies breeding stock for shrimp, pig and poultry farming, as well as feed stock, technology and marketing management.

Buoyed by rapid economic growth, the Chinese government wants to reduce poverty and believes introducing technology to its agriculture sector can help.

Farmers will be encouraged to use modern techniques and equipment to increase revenue. The government hopes the initiative will narrow the income gap between urban and rural residents.

CP group vice chairman Thanakorn Seriburi said the provinces involved were Shanxi, Henan, Hunan, Hubei, Jiangxi and Anhui.

"We have been hired to manage the project because of our success and experience in Thailand and to apply that in China," he said.

Chairman Dhanin Chearavanont was instrumental in the company securing the contract.

The deal will see Chia Tai expand its business network in China. Agriculture and food are its biggest business activities, followed by retail and motorcycles.

Thanakorn, who is responsible for the group's activities in China, said it had opened a second electric-motorcycle plant in Guangzhou.

The plant's production will reach 800,000 units a year, bringing total production to 1.5 million units.

It has a third plant in Louyang with a one-million-unit capacity. It aims to reach total production of three million units within the next three years. Its Da Yang and Da Yun models are among the country's top-five sellers.

A restructuring commenced five years ago shifted the group's focus to sales in rural areas, where consumers are more concerned about endurance and quality and fashion.

Profit from domestic motorcycle sales has been just 50 million yuan a year. Now, exported machines are making 30 per cent of the division's profits, up from just 5 per cent a few years ago. Markets are Vietnam, Indonesia, the Philippines, Pakistan, Burma, Nigeria and South Africa.

"It's time for restructuring motorcycles in China. Small manufacturers have been forced out because of competition. It is expected only 10 big manufacturers will survive the next 10 years," he said. Motorcycles need a large investment, particularly in research and development.

The group is looking to diversify into passenger cars with leading manufacturer Chery Automobile, and a joint venture could see a Thai assembly plant built.

Thanakorn said the group was talking with a major Thai company about a partnership. An announcement will be made soon.

Chia Tai growth has averaged 15 per cent a year. It is involved in more than 100 projects on the mainland and employs more than 80,000 in China and Thailand.

Achara Pongvutitham

 The Nation