GFPT JV Gearing Up to Process Chickens

THAILAND - GFPT, distributor of GFPbrand frozen and processed chicken, expects GFPT Nichirei (Thailand), or GFN, to start chickenprocessing operations in August.
calendar icon 22 June 2010
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GFN is a joint venture between GFPT and Japan's Nichirei Foods.

UOB Kay Hian Securities (Thailand) said in a report that GFN would in August begin slaughtering 20,00030,000 chickens a month, increasing to 70,000 in October.

The Nation reports that GFN's operations will enhance GFPT's performance, because the latter will supply the chickens. If the price of chickens drops, GFPT can write off the difference as a cost.

UOB Kay Hian expects GFN to start turning a profit next year.

GFPT will also add two more production lines for processing chickens, making a total of seven and increasing production capacity 2025 per cent.

The new production lines will serve orders from McKey Food, a JV that is 49 per cent owned by GFPT. They will start processing in the fourth quarter.

UOB forecasts GFPT's net profit will rise 17 per cent to Bt1.24 billion this year on growth in exports. Thailand is enjoying a bright outlook for its shrimp from lower exports by other countries, while BP's oil spill in the Gulf of Mexico will benefit Thai animalfeed products.

Animalfeed sales contribute 34 per cent of GFPT's revenue. Most of its revenue - 59 per cent - comes from chicken and other meats and the rest from processed foods.

The second half of each year is high season for Thai exporters, so UOB expects GFPT to show impressive revenue in the third and fourth quarters.

GFPT closed at Bt8.25 yesterday, unchanged from last Friday.

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