Modern Farm Management on CP's Agenda in China

CHINA - Thailand-based Charoen Pokphand Group is managing or setting up 13 modern farm projects focusing on the production of pigs, chickens, shrimp and eggs through its Chinese operation, Chia Tai.
calendar icon 15 August 2012
clock icon 3 minute read

Under its Chinese arm, Chia Tai, Charoen Pokphand Group is concentrating on two new challenges – modern farm management and property development – with a combined value of 23.62 billion yuan (CNY; 117 billion Thai baht), reports The Nation of Thailand.

Trusted by the Chinese government, Chia Tai has been selected to manage the modernisation of the farm model through a so-called four-in-one cooperation project, involving government, farmers, the private sector and banks.

So far, Chia Tai is managing or setting up 13 modern farm projects with a combined investment value of CNY30.283 billion. These are in Jiangxi, Jiangsu, Hebei, Anhui, Shandong, Jilin, Guangdong, Xinjiang, Zhejiang, Jiangsu, Hubei, Shandong and Beijing. The projects concentrate on pigs, chickens, shrimp and eggs. Of the total project value, four projects with a combined value of CNY23.62 billion have been agreed with the Chinese government.

Chia Tai supplies breeding stock for shrimp, pig and poultry farming, as well as feedstock, technology and marketing management.

The Chinese government wants the project to help revolutionise its farm sector to ensure the country’s food security and better living standards. Farmers will be encouraged to use modern techniques and equipment to increase revenue.

Buoyed by rapid economic growth, the Chinese government also wants to reduce poverty and believes introducing technology to its agricultural sector can help. It hopes the initiative will narrow the income gap between urban and rural residents.

The CP Group’s new interest in managing mega-farm projects is parallel to its investment in business expansion to ensure sustainable growth of its four core operations in China: agriculture, retail, industrial manufacturing, and property, according to The Nation.

Chia Tai is a minor shareholder holding at least 15 per cent of each project. This will encourage Chia Tai to grow more in the field of professional project management rather than only focusing its expertise on the agriculture, food and retail sectors.

Thanakorn Seriburi, vice chairman of CP Group, said it was stepping up its investment in China to ensure expansion of its business in the future.

The joint investment in and management of modern farm business will help extend the group’s business and its efficiency. It is CP’s policy to increase investment in China by 15 per cent per year to ensure annual sales growth by the same percentage.

In addition, the production from these modern farms can directly supply the group’s retail business in China, Lotus Supercenter.

“Our whole strategy is aimed at strengthening the group’s production from upstream to downstream as well as generating wealth for people there. The group’s philosophy is to make a contribution with what we are invested in,” Mr Thanakorn told The Nation.

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