GFPT Plc, a listed integrated poultry producer, plans to invest THB1 billion this year to set up new broiler and grandparent chicken farms to supply its joint-venture processing plant, according to Bangkok Post.

The investment is necessary for the company to meet its commitments with its Japanese partner, which earlier jointly invested to develop a THB2.2-billion chicken plant under GFPT Nichirei (Thailand) Co. The company is required to use only raw poultry supplied from GFPT's farms, not contracted farmers, according to chairman, Anan Sirimongkolkasem.

The investment will be made in two broiler farms in Chon Buri province, at the same location as the processing plant to save on logistics costs. These farms will have a combined daily production capacity of 35,000 hens or 15 million per year.

GFPT also needs to invest in a grandparent stock farm in order to produce around half a million chicks each week by the end of this year.

By early next year, GFPT will be able to produce more than 100 million chicks each year to supply its own farms, as well as other joint ventures such as McKey Food Services (Thailand) Co, which supplies McDonald's restaurants in Thailand and overseas.

Mr Anan said Nichirei had focused on food safety and quality to maintain its leadership and market share in the Japanese frozen food market.

GFPT Nichirei's plant in Chon Buri has a capacity to slaughter 100,000 birds per day to produce 1,500 tonnes per month of processed foods. The factory is running at just 60 per cent of production capacity at the moment, and will increase its output to 85 per cent in August and 100 per cent early next year.

The factory will focus more on exports to Japan in the future, in line with rising demand following the destruction of some agricultural areas in the March 11 earthquake and tsunami.

He said Japanese food businesses were likely to relocate some of their operations to countries including China and Thailand.

Bangkok Post reports that poultry prices, meanwhile, are increasing in line with oil prices. Cooked chicken in the European Union averages US$5,000 a tonne, up $200 to $300 from the first quarter.

GFPT estimated its revenue at THB3 billion in the first quarter, compared with THB2.8 billion in the same period last year. It targets total sales growth of 10 per cent this year to THB12.5 billion.

Mr Anan said the company also planned to launch finished foods under its own brands, which would take about two years.