Thailand's CP Foods Expects Record Year For Profits As Pork Prices Soar
Thailand's largest agribusiness Charoen Pokphand Foods Pcl (CPF) expects to have its best year ever due to soaring pork prices and plans to expand in North America, its chief executive said on Thursday.
Pork prices have surged as the spread of African swine fever in Asia created a supply shortage.
"This could be our best year ... because pork prices are very good and chicken prices are recovering and an easing of lockdown measures will allow restaurants to open," Prasit Boonduangprasert told a news briefing.
Pork prices in Vietnam have nearly doubled since the outbreak of African swine fever in the past couple of years, he said.
In March of this year, Tesco announced that it has agreed to sell its Thai and Malaysian businesses to CP Group.
CPF, whose businesses cover animal feed, farm and food, reported a net profit of 6.11 billion baht ($190 million) for January-March, up 43% from a year earlier and a record high quarterly profit due to high pork prices in Vietnam and Cambodia.
CPF began realising revenue in its first quarter from Canadian producer Hylife, which it acquired last year, and also benefited from falling prices of raw materials such as corn, its CEO said.
This year CPF expects to invest around 20 billion baht, excluding mergers and acquisitions, and plans to expand its pork business in Canada and the United States where it has seen rising Chinese demand for pork as swine fever has reduced supply in China.
“We can export pork to China from Canada,” Prasit said.
African swine fever reached China in 2018, killing millions of pigs in the world's top hog producer, and spreading to many other countries in Asia, including Vietnam and the Philippines. Asia's many small farms, where hygiene standards are often low, were hit especially hard.
Prasit also said that CPF plans to expand its delivery fleet to support distribution of ready-to-eat meals in Thailand to 500 bikes, from around 100 at present.
The company aims to maintain a gross margin of around 18%, seen across its businesses in the first quarter and up from 14% a year earlier, for another one to two years, he said.
CP would maintain its 2023 revenue target of 800 billion baht, growing around 8-10% each year with overseas operations contributing 75% of revenue from current levels of 68%, he said.