Charoen Pokphand Foods subsidiary, CP Pokphand (CPP), saw its sales and profits rise in 2014, largely thanks to non-aquaculture related farming.
Early mortality syndrome (EMS) remained a concern throughout the year, and efforts to combat it have seen CPP focusing on improving its farming set-up and management practices, it said. EMS has hit the company's business in Thailand, as well as Vietnam.
Overall revenue in 2014 for the firm, which produces animal feed in China and owns fish, shrimp and other meat protein farms and processing plants in Vietnam, reached $5.6 billion, up from $5.4bn the previous year.
Cost of sales remained flat, meaning bottom line profit for the year came to $295.8 million, up from $203.7m.
Sales from the Chinese operations – which is primarily agri-feed, 10% of which for aquaculture – fell on weak demand, from $3.49bn to $3.44bn.
In Vietnam, where aqua feed makes up 28% of the animal feed business, sales grew from $843.2m to $867.4m in 2014.
However, farming was the success story, seeing sales leap from $858.2m to $1.045bn. This was mainly attributed to swine, however.
“For the group’s food business in Vietnam, the shrimp processing plant in Hue and the fish processing plant in Ben Tre have commenced commercial production in 2014,” the firm noted. The plant in Hue opened in early 2014, as reported by Undercurrent News, as the company looked to mitigate the result of the hit on preferential tariffs for Thailand to the European Union.
“The group’s food business in Vietnam is still in its initial stage of development and the group will continue to grow this segment. The large potential of the Vietnamese food market will bring long-term benefit to the group,” it concluded.
By way of outlook, the firm reported that the Chinese economy is expected to grow under the its 'new norm' conditions, whilst the Vietnamese economy is expected to recover slowly and steadily.
“The agri-food sector is speeding up its transformation into a more scaled and commercialized industry. Consumption and living standard are improving steadily across our core markets, which in turn drive market demand for protein and high-quality food products.”
“Embracing new technologies and leveraging its competitive strengths, the group is determined to seize relevant opportunities in the agri-food industry as it fulfills its vision to be the 'Kitchen of the World'.”
In July 2014 parent company CP Foods agreed to sell 25% in CPP to Itochu, Japan’s third-largest trading house and one of the world's three big skipjack traders.
“With extensive industry experience and professional know-how, both parties are leading enterprises in their own fields. The cooperation will bring about synergy as well as mutual benefit,” CPP said.
Parent company CP Foods is targeting 10% annual sales growth this year, and plans to spend between THB 20- 25 billion ($611-$763 million) in investments, the firm has said
Source: Undercurrent News, March 3, 2015
Author: Neil Ramsden
Tags: CP Foods, Charoen Pokphand Foods, CP Pokphand (CPP), early mortality syndrome EMS