CPF’s minor shareholders endorse acquisition of swine business in China, making CPF one of the world’s leading swine business operators
published : 30 Oct 2020 at 10:00
Charoen Pokphand Foods PLC (CPF) received endorsement from 99% of minor shareholders to proceed with its planned acquisition of a swine business in China, which will turn CPF into a global leader in the swine industry and support the company’s long-term growth. Minor shareholders approved the acquisition at an extraordinary meeting on 27 October 2020.
Mr. Prasit Boondoungprasert, Chief Executive Officer of CPF, said that the acquisition marks a great opportunity to penetrate the Chinese swine market which constitutes the biggest chunk of the global industry’s value. China is the world’s most populous country and demand for pork products is high and continually increasing. Following the African Swine Flu (ASF) outbreak in China three years ago, a vaccine is not yet available. As such, pig farm measures against environmental impacts to ensure healthy piglets along with biosafety measures are positive factors making this business in China a success and CPF will continue to emphasise them.
CPF’s pig business currently covers seven countries – Thailand, Vietnam, Cambodia, Malaysia, the Philippines, Russia and Canada. Investment in the Philippines, Russia and Canada started recently. Minor shareholder approval of the acquisition in China is poised to make CPF one of the world’s leading swine business operators.
More than half of pigs raised in China are the produce of smallholder farmers. Damage was therefore a huge factor after the ASF outbreak and disease contraction may recur once farming activities resume. This forces a structural change in the farming business, whereby small farmers form part of the supply chain. As CPF plans to expand business by promoting modern disease-prevention measures among farmers and investing in more processing businesses, the shareholders’ approval supports the company’s plans.
Mr. Prasit asserted that the novel coronavirus (COVID-19) pandemic remains a business challenge as it may dampen purchasing power. However, CPF has adjusted its business formats, enhanced operational and production efficiency and adopted efficient expense management. Some of CPF’s overseas businesses have been expanded. These factors are expected to steadily boost CPF’s operational results in the latter half of the year.