CP Group Sets up Integrated Poultry Farms in China

THAILAND - Charoen Pokphand (CP) Group is setting up three integrated poultry farms to China. The Chairman comments on the Group's future investment plans in the poultry and pig sectors in in Russia and Thailand.
calendar icon 28 September 2009
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Charoen Pokphand Group plans to develop three integrated poultry layer farms in selected villages in China where it will likely apply its successful agricultural village management model, especially that of Nong Wah village in Thailand.

Bangkok Post reports that the Thai conglomerate entered into a contract with Beijing two years ago to help modernise China's farm sector and promote integrated farming businesses there.

Mr Dhanin shows off some of CP's hybrid rice at the Kamphaeng Phet Agricultural Village

CP Group chairman, Dhanin Chearavanont, said the group planned to raise about three million layers in each integrated egg-laying farm. Each site would also have a chicken feed production plant and a processing plant for higher value egg-based products such as powdered and liquid eggs for the food industry. Chicken manure would be used as fertiliser.

"Other necessary facilities will include conveyors to load eggs from farms to processing units to avoid human handling of the products," he said. He did not give specific locations and investment capital involved.

CP Group, Thailand's largest agribusiness group, was the first foreign investor in China. It has invested billions of dollars over three decades in several ventures including shopping malls, the poultry industry, animal feed and motorcycle plants.

Its successful farm operations attracted attention from Chinese officials, who are promoting a programme worth 100 billion renminbi (CNY) involving four parties: farmers, CP, the China Development Bank and Chinese authorities, CP vice-chairman Thanakorn Seriburi said recently.

The programme is to be carried out in some villages in Anhui, Shanxi, Henan, Hunan, Hubei, Jiangxi and Jilin provinces.

Over the past two years, a number of delegations of Chinese authorities have visited farm villages supported by CP, and the Nong Wah agricultural village in Chachoengsao has become an impressive prototype, according to another CP executive.

"Enlarged farm sizes, high quality breeds and stronger marketing were the factors that would improve the Thai livestock business in the future"
Dhanin Chearavanont
CP Group chairman

According to Bangkok Post, the Nong Wah project was initiated 30 years ago by Bangkok Bank, CP and the villagers. Each villager was allocated 24 rai [around 3.8 hectares], a house, pig breeders and proper facilities to raise pigs with guidance from the company, while bank staff helped train them to manage finances effectively.

After 30 years, villagers were able to repay debts and run the village on their own under the Nong Wah Agricultural Village Company.

According to Mr Dhanin, CP has no plan for further investments in poultry farms, especially layer operations in Thailand. But China continues to hold great business potential given its 1.3 billion population.

"Excessive investments [in Thailand] would create an oversupply and bring down egg prices, which would definitely affect farmers," he said at a recent seminar on the outlook for the livestock industry, held by the Alumni of the Faculty of Veterinary Science of the Chulalongkorn University Association, and the Animal Health Products Association.

He also encouraged Thai livestock companies to expand investment abroad to tap into growing meat demand.

While CP has a number of investments in livestock in several countries, production remains low when compared with domestic demands. "Our operation in Russia has a capacity to raise as many as one million pigs a year but the volume is still far below domestic demand of 16 million pigs," he said.

CP's pig investment in China, while also sizeable, accounts for a mere six per cent of the Chinese market, which produces about 46 million tonnes of pork per year.

Enlarged farm sizes, high quality breeds and stronger marketing were the factors that would improve the Thai livestock business in the future, Mr Dhanin added.

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