CPF eyes East African market
After four decades of expansion in Asean, Charoen Pokphand Foods is eyeballing East Africa as its new market for investment for the next 10-20 years.
"We will not enter South Africa because the big players from Europe are strongly established there, while East Africa has plenty of business opportunities with a total population of 1.2 billion," said Adirek Sripratak, president and chief executive officer of CPF.
This month, he visited Tanzania, Kenya and Ethiopia to study market prospects. The company sees the countries in East Africa as attractive for farming.
However, the company must be cautious about investing in these emerging markets. There are opportunities but also investment risks. The company will start with small projects, each with investment budgets in the millions of baht.
CPF’s wholly owned subsidiary in Tanzania is now building broiler and animal feed-mill plants. With a population of 53 million, Tanzania has high demand for broilers.
Adirek also visited Poland three months ago to survey the market. Poland has enjoyed high growth in its farm sector.
For the Australian market, CPF mainly focuses on lamb and beef to develop ready-to-eat meals. The company is now seeking a local partner there, as the design of the plant is finished.
CPF’s strategy for future growth still revolves around the creation of a value chain of products, which is still its core business model, the widening of opportunities in markets including Africa, the Americas, Europe and Australia, and the takeover of companies to expand its overseas operations.
More than 60 per cent of CPF’s annual revenue of more than Bt400 billion comes from the overseas operations of over 130 subsidiaries worldwide.
CPF targets 10-per-cent growth annually through the next five years to reach revenue of Bt700 billion.