CP Foods to invest B20-25bn, spin off non-core assets

CP Foods to invest B20-25bn, spin off non-core assets

Adirek Sripratak, president and CEO of Charoen Pokphand Foods (CPF), poses in front of the CP Food Market, a convenient store at Bangkok’s Fortune Town building in this 2012 file photo. (Bangkok Post photo)
Adirek Sripratak, president and CEO of Charoen Pokphand Foods (CPF), poses in front of the CP Food Market, a convenient store at Bangkok’s Fortune Town building in this 2012 file photo. (Bangkok Post photo)

Charoen Pokphand Foods PCL plans to spend 20-25 billion baht this year, mostly on the expansion of its international operations and overseas acquisitions.

The country's largest meat and animal feed producer will keep its annual investment budget at that level over the next five years, aiming to meet the company's sales growth target of 10% a year, chief executive Adirek Sripratak told Reuters on Thursday.

Mr Adirek warned that domestic consumption remains weak as high household debt and lower agriculture prices prompt consumers to be more cautious about spending.

CP Foods plans to spin off the non-core assets of its Hong Kong-listed CP Pokphand, and put the new entity on the Hong Kong stock exchange sometime in the middle of the year, Mr Adirek said.

CP Pokphand has animal feed and farm businesses in China and Vietnam.

CP Foods, the world's biggest shrimp farmer, expects its shrimp business to recover in the second quarter of this year after being hit by the Early Mortality Syndrome disease for more than two years, he said.

"The situation of the EMS disease should recover during summer in the second quarter. As the weather is hotter, the rate of survival for baby shrimp will be higher," Mr Adirek said.

The shrimp business has also been dented by higher European Union tariffs on Thai frozen shrimp. CP Foods will shift its focus to customers in China and Australia, while its unit in Vietnam will export to Europe, he said.

CP Foods' farm business has also been affected by price volatility. At home, meat prices have fallen since the fourth quarter due to excess in supply as its rivals ramp up chicken production, he said.

The farm business, which accounts for 35% of sales, should recover in the second quarter, he said.

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