Published on July 16, 2005

Charoen Pokphand Foods Plc (CPF) has increased its shrimp and chicken prices by 15 to 20 per cent in reaction to higher fuel prices and supply shortages due to last year’s double outbreak of bird flu.

Rising sales and higher prices will fatten the company’s revenues to Bt110 billion this year, 20 per cent more than 2004 revenues.

CPF’s president and chief executive, Adirek Sripratak, said yesterday that the company’s production costs had climbed between 5 and 10 per cent from rising oil prices and higher animal feed costs.

He said the bird flu outbreak, which forced the company to cull millions of chickens, had a domino effect. It caused a shortage of chicks, which eventually became a shortage of chicken meat.

This not only affected Thailand, but also other export rivals such as China.

Nevertheless, Adirek said CPF has the ambitious goal of increasing processed chicken exports to reach 90,000 tonnes this year, compared with 60,000 tonnes last year.

Moreover, shrimp exports are expected to triple, although he did not reveal a target export volume.

“The increased sales growth will allow the company to achieve a higher profit,” he said.

Of the company’s total revenues, 67 per cent would be generated by the livestock business, 21 per cent by marine products and 12 per cent by CPF’s operations in the United States, Indonesia, Turkey, and the UK.

Domestic sales are likely to account for 70 per cent of total income, followed by 20 per cent from exports and the rest from subsidiaries.

Adirek said Thailand’s total exports of chicken products were expected to reach 300,000 tonnes, worth Bt34 billion, this year. Next year, exports are expected to grow 33 per cent to 400,000 tonnes, of which CPF would contribute 120,000 tonnes.

“We hope that chicken export prices will increase due to the shortage of supply,” Adirek said. “At the same time, our modern compartment-system farm will ensure consumer food safety.”

Currently operating at 65 per cent of capacity, CPF’s new manufacturing complex in Nakhon Ratchasima processes two million chickens per week. The plant is expected to begin full capacity production in the fourth quarter.

Adirek said export growth would be higher, but for trade barriers imposed by major trading partners, including anti-dumping charges and the end of the generalised system of preferences.

Somluck Srimalee

The Nation

NAKHON RATCHASIMA

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