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Published on January 9, 2008

The goal is to meet both domestic demand from the population of 1 billion as well as export orders.

The expansion involves a third feed-meal plant for shrimp in the West of the country, close to the Indian Ocean. The plant will be operational late this year or early next year following an investment of US$10 million (Bt333 million).

India has accepted Thai technology for the new facility, thus proving its business potential.

In addition, CPF will expand into the fish business with a focus on Calcutta, where demand is growing. The company has started by accessing the fish-meal market.

CPF chief operating officer Pong Visedpaitoon said that globally aquaculture was expected to show a declining trend, which will directly increase the price of marine products both in the local and export markets.

Pinij Kungvankij, CPF senior vice president for Foreign Aquaculture Business Development, said CPF started had begun to enter India when the country opened its markets in 1992. The Indian government invited the company to invest in the aquaculture business. However, CPF took about three years to survey the investment potential.

In the early stages, the company imported shrimp feed meal from Thailand to serve demand in the area, but growing demand for the product encouraged it to establish a manufacturing plant in India.

The company now operates two shrimp feed-meal factories: in Madras since 1995 and in Visakhapatnam, in Andhra Pradesh, since 2004. The facilities required a combined investment of $17 million.

CP Aquaculture (India), in which CPF holds a 30-per-cent stake and the CP Group the remainder, runs the Madras plant. It has a production capacity of 90,000 tonnes per year.

The Visakhapatnam plant is operated by Charoen Pokphand (India), in which CPF holds a majority stake of 70 per cent and the CP Group the remainder. The has an annual production capacity of 80,000 tonnes.

The companies achieved combined record high sales of 120,000 tonnes last year, when the average sale price of feed meal was $1,000 per tonne. Sales are expected to grow 20 per cent to 144,000 tonnes this year.

Pinit said accessing the Indian market was at the outset aimed only at supporting exports. However, the growing economy has increased the purchasing power of the population, which has in turn lifted demand in the domestic market.

India is one of the world's top 10 shrimp exporters, although its shrimp exports to the US market are subject to a 10-per-cent anti-dumping charge.

"India is not Thailand's shrimp export competitor, as we focus on a different targeted market," Pinit said, adding that the company focuses on the domestic market to capture higher purchasing power.

Thai shrimp production is projected to grow 6 per cent to 530,000 tonnes and export volume to reach 350,000 tonnes this year, according to the Thai Shrimp Association.

CPF is also expanding its aquaculture business in the Philippines, the last Asean country that it entered with a shrimp feed-meal business in 2002. The country was once a champion in producing shrimp in Asia from 1984-89. It then faced a shrimp disease epidemic which caused a sharp drop in production.

CPF exports shrimp feed to the Philippine market, selling 5,000 tonnes last year. It expects exports will reach 10,000 tonnes this year.

Pinit said the great business potential in the Philippines was the market for fish, consumption of which has reached 30 kilograms per head per year.

To serve rising demand, CPF-Philippines plans to invest $10 million to set up a shrimp feed mill next year in Cebu, to be followed by fish-feed mill in Luzon. Production capacity for each should be at least 10,000 tonnes per year.

The company is also considering whether to take over a fish-feed mill in the Philippines and renovate it by installing advanced technology.

In addition, CPF's business in Vietnam is growing, which will prompt it to raise funds on the Vietnam Stock Exchange in the near future.

Achara Pongvutitham

 The Nation