CP unit partners with US company for supply chain sustainability
The Feed Ingredients Trading Business Group, a subsidiary of Charoen Pokphand Group, has formed a collaboration with US company AG Processing Inc (AGP), the world’s largest soybean-processing cooperative, for development of a sustainable supply chain for
Somchai Kungsamutr, chief executive of the Feed Ingredients Trading Business Group, said the partnership aimed to reinforce a sustainable and traceable sourcing policy throughout its supply chain and to promote environmental and social responsibility.
"In line with Charoen Pokphand Food’s sustainable-sourcing policy and supplier-guiding principles launched at the end of 2014, the company constantly communicates with the critical or core suppliers of main raw materials such as fishmeal and maize, mostly local suppliers who are core business partners. We realise that a supply-chain traceability system is an effective tool to minimise social and environmental impacts," Somchai said.
According to the three-year memorandum of understanding, both parties are committed to develop jointly an acceptable process whereby soybean meal can be traced back through the supply chain, from processing plants back to the soybean-growing areas.
They will develop acceptable standard measures and regulatory guidelines on labour and human-rights concerns that will apply to the entire supply chain and are compliant with the laws of the countries where both parties conduct their business.
In addition, they will develop a mutually acceptable system to issue documents certifying that none of the products sold to CP Group originate from deforested areas. Meanwhile, they will encourage farmers to increase productivity, reduce costs and implement environmentally responsible cultivation practices as well as comply with all relevant international standards.
Thailand is the first country in Asean with which AGP has formed a partnership. AGP is a leading agribusiness with primary operations as a major US soybean processor/refiner producing and marketing soybean meal, refined soybean oil, and biodiesel.
AGP is owned by 175 local and regional cooperatives comprising more than 250,000 farmer-producers across 13 US states.
Somchai said his company would expand its traceability system to the supply chains of other raw materials besides soybean meal.
On January 1, the company officially launched a corn traceability system, under which all suppliers of corn to CP now must register legal deeds and other documents through an online platform before any business transaction.
In 2014, the company launched a "Self-Sufficient Farmers and Sustainable Corn" pilot project in Pak Chong, Nakhon Ratchasima. Somchai said the project was successful, with a 60-per-cent increase in yields, 29-per-cent drop in production costs, and 40-per-cent decrease in carbon footprint.
The company is collaborating with the Agricultural Land Reform Office to expand the planting areas from the current 38,500 rai (6,160 hectares). It expects to bring in at least 15,480 additional small-scale farmers for a total production area of 225,000 rai by 2019.
