CPF subsidiaries investing Bt250m in Laos, Cambodia

Charoen Pokphand Foods is preparing to invest more in Laos and Cambodia to set up feed mills and livestock farms.

CP Laos and CP Cambodia are investing a combined Bt250 million to set up a new silo for maize in Cambodia and a new feed-meal plant in Laos to strengthen CPF's integrated agricultural-industrial business as the Asean Economic Community (AEC) approaches.

The investment will involve the purchase of a maize silo and drying plant in Cambodia and the establishment of a new feed-mill plant in Champasak province, southwestern Laos.

The company has also invested further in its three core businesses of feed production, farming and food processing in the two countries. Its businesses there are focused on the efficient development of the supply chain to access quality raw materials. This is aimed at making CPF well placed to serve rising demand once the regional single market is established in 2015.

Sakol Cheewakoset, president of CP Laos and CP Cambodia, said the opening up of the regional market under the AEC would create great business opportunities for both investment and export to neighbouring countries as well as developed nations.

CPF is continuing to invest in Laos and Cambodia to take advantage of increasing purchasing power of people there. Moreover, the two countries are fully supportive of the CP subsidiaries. Political stability in both countries has prompted economic growth to ensure sustainable business development.

Most recently, the company has invested in developing a silo and drying plant for maize in Pailin province, western Cambodia. The investment is to ensure high-quality raw material to serve its feed production for both the domestic market and export.

Since 1995, CP has invested a total of Bt3 billion in Cambodia, including feed production, livestock farming and food processing such as sausage-making and slaughterhouses.

Sakol said the plant in Pailin province would ensure the company's distribution in western Cambodia, an important area for agricultural production. Having a plant there will reduce logistics costs. Initially, capacity is set at 10,000 tonnes per month.

The company is also considering investing in aquaculture in Cambodia in the near future.

"CP's business in Cambodia is doing well, as food business still has great opportunity. Our five-year business plan aims to double our total sales every year," Sakol said.

He added that Cambodia had to import feed meal and live swine from neighbouring countries. CP Cambodia's revenue is growing by an average of 20 per cent a year, but it hopes to achieve 30 per cent growth this year from its business expansion.

Meanwhile, investment in Laos has reached approximately Bt1 billion in the feed, farm and food businesses. However, the food business is in the beginning stage, with only Five Star grilled chicken launched so far.

CP operates one feed mill in Vientiane with production capacity of 10,000 tonnes per month. The new plant in Champasak province will have initial production capacity of 5,000 tonnes per month to serve consumption in southern Laos. Having a plant there will reduce the company's logistical cost by avoiding the need to transport goods from Vientiane.

Sakol noted that CP Group chairman Dhanin Chearavanont had said the group should not concentrate only on feed, farming and food processing but also on organic production of both livestock and crops in Laos and Cambodia. This plan aims to serve their growing economy and increasing the number of foreign visitors.

Moreover, organic production would enhance the two countries' exports to North America and the European Union. The most important thing is to create and organic supply chain in both countries.