Thailand-based Charoen Pokphand Foods (CPF) has attributed its recently announced expansion in Vietnam to the expected benefits of the Trans-Pacific Partnership (TPP), and CP Group’s long-time chairman has resigned.
CPF is to invest more than US$200 million by creating an export hub for its poultry and pig meat businesses in Vietnam, reports Nikkei Asian Review.
Among the projects planned is a new poultry processing plant with a weekly capacity of one million birds per week, and additional shrimp farms to raise production by a factor of four to 50 billion units a year.
Shrimp feed output looks set to increase from 300,000 metric tons (mt) to 500,000 metric tons (MT) this year, according to a CP Vietnam executive.
CPF has been attracted by the export potential it sees as a result of Vietnam’s inclusion in TPP, which stimulated this significant fiscal commitment, which amounts to around one-quarter of its total investment over the period 2015-17.
While CPF sales in Thailand changed little in 2018 when compared to the previous year, its Vietnamese affiliate achieved an increase of 26 percent to almost THB82 billion (US$2.56 billion).
While Thailand has not yet joined the group, Vietnam became the seventh country to ratify TPP in November last year. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP11) was formed after the U.S. withdrew from a previous agreement, and currently has 11 members including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, and Singapore.
As well as the opportunities for the company’s expansion of poultry, fish, and shrimp exports, CPF said that labor costs are also lower in Vietnam than in Thailand.
CPF chairman resigns
Dhanin Chearavanont last week resigned as chairman of the board of CPF, reports Bangkok Post. The company is currently seeking to appoint his successor.
At 80 years old, Dhanin said that other businesses are preventing him from performing his CPF duties. He and his brothers retain control more than 51 percent of the group.
Charoen Pokphand Group is the world’s largest animal feed company, according to WATTAgNet’s Top Feed Companies database, and it is ranked 6th in the WATTAgNet Top Poultry Companies listing.
Last week, CPF announced it had purchased a majority share in HyLife, one of Canada’s leading pork producers. Itochu of Japan will continue to own the remaining 49.9 percent of HyLife, which said the proposed transaction will build synergies and growth between the two companies.
