CPF Adds Chinese Poultry Company to List of Acquisitions
Several weeks after investing $1.08 billion to buy the Bellisio Group, which ranks as the third largest producer of single-serve frozen ready meals in the USA, Bangkok-headquartered Charoen Pokphand Foods Plc (CPF) has acquired COFCO Meat (Suqian) Co. for 976 million baht (approximately 187 million yuan). The Chinese company is engaged in poultry farming and the processing and sale of chicken meat products, primarily to customers in the Yangtze River Delta area .
The transaction, announced on December 7, was handled by CPF’s Chia Tai (China) unit, which is taking over shareholder loans valued at 2.01 billion baht. The purchased company, which has operated as a subsidiary of COFCO Poultry Industry Co. Ltd. since its incorporation in 2010, rang up sales of 642 million yuan and posted a net loss of 83 million yuan last year. In the first nine months of 2016 it realized a profit of 7 million yuan on sales of 496 million yuan. Current capital is said to be 596.29 million yuan.
Charoen Pokphand Foods, which is Thailand’s largest agro-industrial and food conglomerate and the nation’s No. 1 producer of meat and animal feed and exporter of frozen poultry products, has been very active on the acquisition trail lately. In late October it took a 70% stake in a Chinese poultry firm and bought into in several other companies in China, Taiwan and Thailand, with a combined investment of 2.7 billion baht.
In 2015 CPF entered the Russian poultry market in earnest via the acquisition of an integrated poultry business from Dutch firm Agro Invest Brinky for $680 million in cash. The transaction gave it entry into one of the fastest-growing markets for animal protein, with an average growth rate of 7.4% per annum during the past decade.
“The Russian deal came a year after CP Foods began receiving strong orders for chicken from Russia, which has banned or limited imports of agricultural products from the European Union after facing sanctions,” reported the Moscow Times.