The Turkish unit of Charoen Pokphand Foods Plc (CPF) is expected to contribute US$610 million to its parent firm's international revenue this year thanks to rising meat consumption in that country.
A CP Shop in Istanbul. Thirty more will open in Turkey this year for a total of 450 operated by the company and franchisees. Rising meat consumption in the Middle East country is boosting parent CPF’s international revenue.
Together with the Taiwanese arm, the Turkish operation shows the strongest performance among CPF's operations and ventures in 12 countries last year.
The SET-listed CPF reported consolidated sales of 357 billion baht last year, 55% of which were from international operations and the rest was from domestic sales and exports.
Sales of the Istanbul-based C.P. Standart Gida Sanayi Ve Ticaret A.S. (CPS) are projected to expand by 8.5% this year from $562 million last year.
CPS president Rewat Hathaisattayapong said the growth will be driven by Turkey's improving economy and CPS's offers of more value cooked food.
Straddling Asia and Europe, Turkey is forecast to enjoy 4% economic growth this year, higher than Europe's average.
Consumption of poultry products in the Muslim-majority country is growing while purchasing power remains strong.
"Average chicken meat consumption in Turkey is 22 kilogrammes per year per person," said Mr Rewat.
The volume is much higher than per-capita world poultry consumption of 12.97 kg last year.
The euro-zone debt crisis has affected Turkey's economy minimally thanks to its strong banking and financial services sector following the structural reforms it carried out during its own financial crisis in 2001.
To cash in on the opportunity, CPS has outlined intensive expansion plans over the next five years with the goal of fetching $1.5 billion in sales.
It also targets being one of Turkey's leaders in food products and feed supplies in the coming years.
"We're going to beef up food service business via supermarkets, hotels and restaurants and strengthen retail sales by adding CP Shops to increase retail sales," Mr Rewat said in Bangkok.
The company plans to invest $10 million or 313 million baht a year over the next five years.
The expansion includes construction of a seventh animal feed factory, which will bring its annual feedmeal production capacity to 1.5 million tonnes, half of which will be used by its livestock farms.
The facility, to be completed over the next two years, will help to increase feed production by 500,000 tonnes and maintain its position as an animal feed market leader in Turkey.
The investment will go to making more processed food for sale in Turkey and for exports to the EU, as the bloc still prohibits raw chicken meat imports from that country.
"The Turkish government has been working hard to improve the standards of farm produce and food to meet EU requirements including in the areas of animal welfare and salmonella/antibiotics standards," said Mr Rewat.
He said the Turkish operation, which slaughters 350,000 chickens every day, commands an 8% share in Turkey's market of 1.8 million tonnes a year.
Presently, 90% of chicken meat output is for the domestic market and the rest supplied to countries in the Middle East, particularly Syria, Iraq and Iran.
For domestic sales, CPS will open 30 more CP Shops this year for a total of 450 operated by the company and franchisees.
The number is expected to rise to 1,000 branches over the next five years.
The expansion will change the income structure of the 27-year-old subsidiary, which was set up to cash in on the regional integration of the EU and connects to markets in Central Asia and the Middle East.
Over the next five years, the income from food or more value products will represent 15% from 3% at present, while sales of live chickens will fall to 9% from 11%.
The animal feed business will make up a bigger share in total revenue, increasing to 36% from 33% at present, while raw meat will contribute 40%, down from 53% at present.