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CPF to focus on processed chicken products to boost growth

Sep 25. 2018
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By Kwanchai Rungfapaisarn
The Nation

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Charoen Pokphand Foods (CPF) yesterday revealed a new business strategy under which it will maintain its production capacity, but instead of supplying fresh chicken it will focus more on processed products. 

The company is also planning to open a chicken processed-products plant in Vietnam by 2020 to supply markets in Europe and Japan. 

Prasit Boondoungprasert, chief operating officer for CPF’s chicken business and international trade, said the company currently has large chicken-processing facilities in Min Buri  in Bangkok, as well as in Saraburi and Nakhon Ratchasima, with a total capacity to produce about 10,000 tonnes of chicken products per month. This year, CPF has spent Bt2.5 billion to set up three new processing factories in its existing complexes to increase its total capacity to 12,500 tonnes of chicken per month. 

Its capacity will be further increased by its new US$250-million (Bt8-billion) integrated production plant in Binh Duong of Vietnam, which will not only export chicken products to Japan and Europe but will also cover the domestic market. This plant will be CPF’s first totally export-oriented chicken-processing facility and will be in line with the Vietnam government’s plan to boost exports of chicken products. 

The plant will go into operation in 2020 and will have the capacity to process one million chickens per week. Production in the Vietnam facility will cover the entire process – from chicken feed and farming, to slaughtering and processing. 

Prasit said the company’s strategy is to focus on the development of processed chicken products, so they have a longer shelf life and better price stability, which will be beneficial for export.

“We expect our total sales of chicken products to reach about Bt45 billion this year, and about Bt50 billion per annum in the next three years,” he said.

“Some 30 per cent of our entire chicken production is processed products. Processed products have contributed to about 60 per cent of our total chicken export, while in Thailand, processed products have contributed to only 10 per cent of our domestic sales,” Prasit said. He added that the company aims to increase its export of processed chicken products by at least 10 per cent every year. 

He said CPF’s key export markets for chicken products are United Kingdom, Japan, Germany, Denmark and Scandinavia. Prasit said CPF has expanded its sales and production facilities in Europe to diversify its business risk. 

“We acquired a chicken-processing factory in Poland three years ago. It has the capacity to process about 2 million chickens per week for export mainly within Europe,” he said. 

In 2017, CPF also acquired two trading houses for chicken products in the UK to add to another, which has been operating for about 10 years. The three trading houses take care of the different distribution channels, including retail and industrial buyers, as well as food service operators. 

“Two years ago, we bought a new trading house in Germany to expand our distribution network for future growth. What we have done in Europe is to diversify possible risks from uncontrolled factors, such as the withdrawal of the United Kingdom from the European Union, which may affect our chicken business,” Prasit added.

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