Company to increase hybrid-seed output amid surge in orders for next year
Rice, liquid rubber and palm oil are the three core products in the five-year strategic plan of Charoen Pokphand’s crop business, which aims to double sales to Bt4 billion by 2015.
“We’re trying to increase our production of hybrid rice seeds and rubber seedlings as now we’re overwhelmed with orders for next year,” Montri Congtrakultien, president of the Crop Integration Business Group (CPS), said last week.
Declining planting areas is also an important factor, particularly in the world’s biggest rice-consuming countries like China. That has encouraged Thailand to concentrate on rice production. Chinese are also reluctant to work on the farm anymore, preferring to work in factories.
Although Thailand is the world’s biggest rice exporter, its yield development has fallen behind its rivals, especially Vietnam and China, whose production is more than 1,000 kilograms compared with a maximum of 450-500 kilograms for Thailand.
Thailand is also the world’s biggest rubber exporter, forcing it to pay more attention to the quality of both rubber trees and liquid rubber.
Palm oil not only helps the country successfully move to biodiesel but also the group to become a raw material supplier to oil companies.
The business direction plan is designed to strengthen the country’s rice and rubber export competitiveness in the long run through high yields and quality products. For instance, the launch of CP’s hybrid rice seed CP 304 has allowed farmers to enjoy an average yield of 1,000 kilograms per rai. Production costs are also reduced, and the seeds have a special feature " drought resistance.
“We now have a ‘happy’ problem as farmers have given us a deposit of Bt3 million to purchase our hybrid seeds but we are worried about our capacity,” he said.
The group has set up “nucleus” farms by grouping farmers in targeted areas to grow the hybrid rice breed, starting with 20 provinces including Ayutthaya, Angthong and Chainat in the Central region; Suphan Buri, Kanchanaburi and Phetchaburi in the West; and Chachoengsao, Prachin Buri, Sa Kaew and Kabinburi in the East.
However, the group’s total hybrid-seed production reaches only 100 tonnes now for 10,000 rai of paddy fields. It is planning to double capacity to 200 tonnes to serve market demand.
“We’re trying to increase the yield of CP 304 seeds from 120-130 to 250 kilograms per rai. If successful, it will bring down not only our cost to below the target of Bt90 but also the price to farmers,” he said.
Commercial production needs 300 kilograms per rai, he said.
Hybrid seeds are more expensive than other popular types, which cost about Bt50 per kilogram and produce an average of 450-500 kilograms per rai. Farmers will be compensated for the higher price of hybrid seeds by their lucrative yield.
CPS plans to increase seed output to 600 tonnes next year to serve domestic demand. It hopes to increase total production to 10,000 tonnes by the end of the plan.
Anek Silapapun, executive vice president of CPS, said CPS has progressed with seed research and development, focusing on both flood and pest resistance. The group has also been conducting hybrid jasmine rice and sticky rice development for five to six years at its two research centres in Kamphaeng Phet and Chiang Rai.
Anek, who is a rice expert, said CPS is planning to launch four hybrid rice breeds and about 12 strains next year, with the focus on brown plant hopper resistance.
The group is trying to expand its “nucleus” rice areas to at least 100 for this hybrid seed.
CPS’s rubber seedling JVP80, which comes with high natural rubber liquid yield of 540 kilograms per rai, is also a popular choice among growers in the Northeast and North. Production will increase from 450,000 seedlings this year.
The government’s policy to expand rubber plantations by 300,000 rai will drive up market demand. Each rai requires 76 seedlings.
“Rice farmers are considering potential crops that have low risk while generating sustainable income. Rubber presents a great opportunity due to its attractive price of over Bt100 per kilogram. However, rice growing still has a lot of problems, like volatile prices, pests and disasters,” Montri said.
Nared Chin-inmanu, vice president of Charoen Pokphand Engineering, said the company plans to introduce a rubber-cutting machine that will ensure high quality through clean natural rubber. To integrate production, the company plans to set up processed rubber plants in Phayao, Udon Thani, Nong Khai and Sakon Nakhon.
“The cutting machine is needed to develop some parts to ensure efficient cutting and quality rubber,” he said.
Montri said the palm-oil business would facilitate the company’s entry into the alternative-energy business. Fresh palm fruit will be directly transported to its six crushing mills mainly in the South and East, which are planned for next year. The group will talk with major oil companies, including PTT and Bangchak, about supplying them crude palm oil.
The price for fresh fruit will be based on the percentage of oil rather than the size of the palm bunch, he said.
“The purchasing practice will encourage growers to concentrate more on quality production for higher income,” he said.
Palm-oil nuts are currently quoted at Bt3 per kilogram, he said.
Rice, rubber and palm oil account for 50, 30 and 20 per cent of the group’s business, which also includes agricultural equipment and fresh fruit. Its total sales will reach Bt2.2 billion this year and are projected for Bt2.5 billion next year.
