CPF banks on overseas expansion to fuel growth
Charoen Pokphand Foods PLC (CPF) aims to expand its overseas business and is confident of its financial performance in 2019 meeting targets thanks to positive returns from investments in Thailand and 17 countries, chairman of CPF’s executive committee, Adirek Sripratak, said.
His statement echoed a belief that amid weakening purchasing power, the food business will thrive due to persistent demands especially for the products that are safe, traceable, as well as environmentally and community-friendly.
“CPF is the producer of reasonable protein-rich food, be they chicken, pork, shrimps, fish and eggs, which are all people's main staple. Importantly, CPF adopts an integrated production process. I’m confident that CPF’s business will experience no negative impacts and will flourish as always,” he said.
Adirek revealed that in 2020 CPF will maintain its focus on growing its business, which entails additional investments in potential countries including the 17 countries where CPF's businesses are located. Among the destinations with high growth opportunities are China, Vietnam, India, the Philippines, Russia and the United States.
CPF's business growth has been driven mainly by overseas investments in 17 countries, which bring more than 70 per cent of the company’s revenue of more than Bt500 billion. The revenue generated in Thailand is approximately 27-28 per cent of total revenue while exports from Thailand constitute only 5 per cent. Though exports are affected by the dollar-baht exchange rate, imports of raw materials have balanced the foreign exchange impacts.
Adirek admitted that a drought, anticipated to be more severe next year, may negatively affect Thailand’s agricultural sector which relies heavily on water. However, he added that CPF’s livestock business was supported by abundant water sources but the company may face a slight increase in production cost due to the cyclical adjustment in raw material prices. Amid this situation, CPF will maintain its emphasis on production efficiency, cost management, and the quality of products and services, he said.