Thai CP Foods sees higher 2012 sales after acquisition
Charoen Pokphand Foods, Thailand's largest agribusiness company, expects sales in 2012 to exceed 300 billion baht ($9.55 billion), boosted by its purchase of a Hong Kong affiliate, its president said according to Reuters news agency.
CP Foods agreed to buy 74.2% of Hong Kong-listed CP Pokphand Co Ltd (CPP) for $2.1 billion in November last year.
The acquisition of the majority stake will help CP Foods expand in China and Vietnam. In particular, it will get access to 28 provinces in China.
The deal will also allow for better synergy between its animal feeds and farming businesses.
"We are seeing stronger sales growth this year, driven by the acquisition of CP Pokphand," president Adirek Sripratak told reporters, adding the company had completed the purchase in mid-January.
"We should start booking gains from this deal in the first quarter, either in February or March."
Established in 1987, CPP is the second-largest animal feed business in China and operates under the Chia Tai brand name. In Vietnam, it is the largest player in the feed business for poultry and swine farms.
"Sales this year are projected to top the 210-220 billion baht we made in 2011. There are good prospects in both markets. They're highly populated countries with strong economic growth. They will be good markets for us."
Once completed, the acquisition would make CP Foods the top listed livestock and aquaculture company in the Asia-Pacific region.
Food price increase
Adirek said food prices were expected to rise globally on the back of high oil prices and increasingly volatile weather conditions.
CP Foods' billionaire chairman, Dhanin Chearavanont, ranked Thailand's richest man by Forbes magazine last year, has been investing in farms and factories in India, Turkey and Russia to tap growing food demand.