CPF’s board of directors has approved its Dutch subsidiary to enter into discussions to buy an integrated poultry business in Russia from Agro Invest Brinky B.V.

The acquisition will be completed in two transactions. CPF will acquire an 80 percent interest by the end of 2015, and the remaining 20 percent interest will be acquired by the end of 2018, according to a company press release. In the first transaction, CPF Netherlands will acquire a Russian company that will hold 80 percent interest in CJSC Poultry Production Severnaya and CJSC Poultry Parent Stock Production Woyskovitsy, which together produce feed, parent stock and day-old chicks as well as operating broiler houses and primary processing. In 2014, the two companies generated consolidated sales of RUB16,935 million (US$285.6 million) and net income of RUB5,097 million, and the overall enterprise was valued at US$680 million.

Commenting on the move, president and CEO of CPF, Adirek Sripratak, said the board of directors foresees the acquisition as an opportunity for CPF to expand further into Russia, where there is significant potential for increasing meat consumption.

Together, the Severnaya and Woyskovitsy operations are thought to be among the top 5 poultry companies in Russia with an estimated 5 percent share of the domestic poultry industry, and Adirek stated that the transaction will give CPF access to the markets of St. Petersburg and Moscow.

CFP’s existing feed, swine interests in Russia

The latest acquisitions will join other CPF business interests in Russia, which include animal feeds and pig production through the operations of Charoen Pokphand Foods (Overseas) L.L.C., CPF AGRO L.L.C. and subsidiaries of Russia Baltic Pork Invest ASA (RBPI), according to the latest annual report from Charoen Pokphand Foods Public Co. Ltd.

The company also stated its intention to focus on the overseas business expansion and the acquisition of relevant businesses in 2015. A target of 10 percent was set for sales growth over the year, with most of this derived from the company’s international business. Strong growth is expected in ASEAN member countries and Indochina.

CPF reported total sales of THB96,224 million (US$2,759.4 million) for the first quarter of 2015, of which 63 percent was from its international operations and exports. The company posted a net profit of THB2,956 million – 44 percent more than in the same period of 2014.

This month, the Charoen Pokphand Group and the government of Jilin province are planning a Jilin Chia Tai Foods Co. Ltd. poultry plant project in China, which will have the capacity to process 100 million broilers annually.