The tsunami that killed nearly 200 people in the Samoas also dealt a vicious blow to the already sputtering engine of the American Samoa economy: tuna canneries.
The US territory has long been home to Chicken of the Sea and Starkist plants that make more than half the canned tuna consumed in the United States.
Even before three-metre waves roared ashore on Sept 29, the territory had been bracing for the closure of the Chicken of the Sea facility, which meant nearly 2,000 people would lose their jobs. Because of the tsunamis, the end effectively came a day earlier than scheduled.
Chicken of the Sea is owned by SETlisted Thai Union Frozen Plc (TUF),Thailand's biggest seafood exporter. TUF decided to shift operations from the Pacific island to a new $20-million plant that opened last week in the US state of Georgia.
Meanwhile, the cannery run by StarKist Co lost power in the tsunami and isn't expected to return to full production for another month or so.
The canneries directly and indirectly make up about 80% of all economic activity in American Samoa, which has a population of 65,000 people about a five-hour plane ride from Hawaii.
"It's like we've been hit by an earthquake, a tsunami, and a cyclone all at once," said Governor Togiola Tulafono,who added that the shutdowns would ripple through the economy as newly unemployed and idle workers won't have as much money to spend."When the cannery shuts down, a whole lot of other things shut down. We need to get that company back up and working," he said.
The industry was in trouble even before the disaster because of a 2007 US federal law mandating that the same minimum wage laws that apply to the 50 states be enforced in the Pacific territory. The law is gradually lifting the minimum wage for American Samoa by 50 cents a year until it reaches $7.25 (245 baht) an hour - the same standard as the rest of the country.
The law has increased labour costs for the canneries by more than 30%,even as they compete with canneries in Thailand and Vietnam where the hourly wage is less than $1.
Cannery workers in the territory now earn an average of $5.11 an hour.
StarKist laid off about 350 hourly and salaried workers but it has chosen to stay in Samoa and lobby for a new bill now before Congress that would provide US fishing fleets with incentives to sell their fish in American Samoa. The bill would also pay subsidies to processors,like StarKist, in the US territory.
"It allows American Samoa to be globally competitive again," said Don Binotto, president of StarKist Co."If that is passed, frankly, we see American Samoa as a place where we can continue to do business in the long term."
The two plants sit right next to each other in long, white rectangular buildings along a narrow waterfront in Pago Pago Harbor's small industrial zone.
The tsunamis largely spared both plants even though they destroyed dozens of buildings across the harbour.They did, however, drown the power plant that feeds electricity to StarKist,knocking the plant out of service.
To cope, StarKist is shipping 10 generators to Pago Pago from Los Angeles that will supply the plant with electricity until the local power plant is rebuilt.The plant should be fully operational by the sixth or seventh week after the tsunami, said Mr Binotto.
In the meantime, StarKist is storing 4,000 tonnes, or $13 million worth of tuna, in freezers run on generators.
The tsunami has meant a double disaster for StarKist employees like Fuauli Atisano'e. The tsunamis wrecked the 38-year-old's home, as well as his parents'home next door, in the small coastal village of Tula. Their concrete walls are standing, but their floors are caked with silt and their windows are blown out.
A waterlogged coconut, metal mattress frame and sewing machine are strewn around one of their rooms.
"See that car inside the trees," Atisano'e said,"that's my car."
The father of three hasn't heard yet when he'll be returning to work.
The governor last month proposed that the territorial government buy Chicken of the Sea's COS Samoa Packing plant to keep it open. A committee of territorial lawmakers was due to hold a hearing on the measure the day the tsunami hit, but had to postpone their deliberations because of the disaster.
Chicken of the Sea says it plans to use Samoa Packing as a cold-storage facility for fish caught in the Pacific.
On a recent morning, maintenance workers dismantling the tuna packing and sealing machines were among the few remaining employees on site. They were preparing the equipment for shipment to the new plant in Lyons, Georgia.
"We're still working for two or three more weeks," said Fotu Matola, a 38-yearold father of three."But after that, we're looking for another job [to] to earn some money for the kids and family."
Saturday, October 31, 2009
CPF looking to record profits in third quarter and full year
Charoen Pokphand Foods, Thailand's biggest producer of meat and animal feed, expects to post a record profit for the third quarter and the full year on lower costs and higher overseas sales.
"We will see historically high sales and profit this year," president Adirek Sripratak said yesterday, without providing details. The company will maintain its target for sales growth of between 5 and 10 per cent this year.
Sales and also forecast to increase between 5 and 10 per cent next year, Adirek said.
Charoen Pokphand plans to sell Bt8 billion of bonds in November, he said, with the debt likely to have maturities of between three and five years.
"We will see historically high sales and profit this year," president Adirek Sripratak said yesterday, without providing details. The company will maintain its target for sales growth of between 5 and 10 per cent this year.
Sales and also forecast to increase between 5 and 10 per cent next year, Adirek said.
Charoen Pokphand plans to sell Bt8 billion of bonds in November, he said, with the debt likely to have maturities of between three and five years.
Wednesday, October 14, 2009
RESTRICTIONS ON FEED-MEAL IMPORT
The Commerce Ministry will propose the government maintain import restrictions on raw materials for feed mills next year, to ensure that the businesses can adequately plan in advance.
Acting permanent secretary Yanyong Phuangrach yesterday said the government would finalise its import policy for feed meal soon after Commerce Minister Porntiva Nakasai approved it.
The action came after private enterprises called on the government to set up a meeting of the Food Policy Committee to allocate an import quota for soybean meal, maize and powdered fish in advance of the new year, in order to plan next year's production.
Under the import policy, the government will freely allow soybean-meal imports at a tariff of 2 per cent. However, importers must also purchase an equal quantity of domestic soybean meal, which will help prevent the soybean price from dropping amid a flood of imports.
Feed-meal producers will be allowed unlimited imports of maize from March 1 to June 30 of next year. Imports of powdered fish will enjoy zero tariffs under the Asean Free Trade Agreement, against a tariff of 5 per cent now.
Acting permanent secretary Yanyong Phuangrach yesterday said the government would finalise its import policy for feed meal soon after Commerce Minister Porntiva Nakasai approved it.
The action came after private enterprises called on the government to set up a meeting of the Food Policy Committee to allocate an import quota for soybean meal, maize and powdered fish in advance of the new year, in order to plan next year's production.
Under the import policy, the government will freely allow soybean-meal imports at a tariff of 2 per cent. However, importers must also purchase an equal quantity of domestic soybean meal, which will help prevent the soybean price from dropping amid a flood of imports.
Feed-meal producers will be allowed unlimited imports of maize from March 1 to June 30 of next year. Imports of powdered fish will enjoy zero tariffs under the Asean Free Trade Agreement, against a tariff of 5 per cent now.
Monday, October 12, 2009
Tsunamis hit American Samoa's economic engine
The tsunami that killed nearly 200 people in the Samoas also dealt a vicious blow to the already sputtering engine of the American Samoa economy: tuna canneries.
The US territory has long been home to Chicken of the Sea and Starkist plants that make more than half the canned tuna consumed in the United States.
Even before three-metre waves roared ashore on Sept 29, the territory had been bracing for the closure of the Chicken of the Sea facility, which meant nearly 2,000 people would lose their jobs. Because of the tsunamis, the end effectively came a day earlier than scheduled.
Chicken of the Sea is owned by SETlisted Thai Union Frozen Plc (TUF),Thailand's biggest seafood exporter. TUF decided to shift operations from the Pacific island to a new $20-million plant that opened last week in the US state of Georgia.
Meanwhile, the cannery run by StarKist Co lost power in the tsunami and isn't expected to return to full production for another month or so.
The canneries directly and indirectly make up about 80% of all economic activity in American Samoa, which has a population of 65,000 people about a five-hour plane ride from Hawaii.
"It's like we've been hit by an earthquake, a tsunami, and a cyclone all at once," said Governor Togiola Tulafono,who added that the shutdowns would ripple through the economy as newly unemployed and idle workers won't have as much money to spend."When the cannery shuts down, a whole lot of other things shut down. We need to get that company back up and working," he said.
The industry was in trouble even before the disaster because of a 2007 US federal law mandating that the same minimum wage laws that apply to the 50 states be enforced in the Pacific territory. The law is gradually lifting the minimum wage for American Samoa by 50 cents a year until it reaches $7.25 (245 baht) an hour - the same standard as the rest of the country.
The law has increased labour costs for the canneries by more than 30%,even as they compete with canneries in Thailand and Vietnam where the hourly wage is less than $1.
Cannery workers in the territory now earn an average of $5.11 an hour.
StarKist laid off about 350 hourly and salaried workers but it has chosen to stay in Samoa and lobby for a new bill now before Congress that would provide US fishing fleets with incentives to sell their fish in American Samoa. The bill would also pay subsidies to processors,like StarKist, in the US territory.
"It allows American Samoa to be globally competitive again," said Don Binotto, president of StarKist Co."If that is passed, frankly, we see American Samoa as a place where we can continue to do business in the long term."
The two plants sit right next to each other in long, white rectangular buildings along a narrow waterfront in Pago Pago Harbor's small industrial zone.
The tsunamis largely spared both plants even though they destroyed dozens of buildings across the harbour.They did, however, drown the power plant that feeds electricity to StarKist,knocking the plant out of service.
To cope, StarKist is shipping 10 generators to Pago Pago from Los Angeles that will supply the plant with electricity until the local power plant is rebuilt.The plant should be fully operational by the sixth or seventh week after the tsunami, said Mr Binotto.
In the meantime, StarKist is storing 4,000 tonnes, or $13 million worth of tuna, in freezers run on generators.
The tsunami has meant a double disaster for StarKist employees like Fuauli Atisano'e. The tsunamis wrecked the 38-year-old's home, as well as his parents'home next door, in the small coastal village of Tula. Their concrete walls are standing, but their floors are caked with silt and their windows are blown out.
A waterlogged coconut, metal mattress frame and sewing machine are strewn around one of their rooms.
"See that car inside the trees," Atisano'e said,"that's my car."
The father of three hasn't heard yet when he'll be returning to work.
The governor last month proposed that the territorial government buy Chicken of the Sea's COS Samoa Packing plant to keep it open. A committee of territorial lawmakers was due to hold a hearing on the measure the day the tsunami hit, but had to postpone their deliberations because of the disaster.
Chicken of the Sea says it plans to use Samoa Packing as a cold-storage facility for fish caught in the Pacific.
On a recent morning, maintenance workers dismantling the tuna packing and sealing machines were among the few remaining employees on site. They were preparing the equipment for shipment to the new plant in Lyons, Georgia.
"We're still working for two or three more weeks," said Fotu Matola, a 38-yearold father of three."But after that, we're looking for another job [to] to earn some money for the kids and family."
The US territory has long been home to Chicken of the Sea and Starkist plants that make more than half the canned tuna consumed in the United States.
Even before three-metre waves roared ashore on Sept 29, the territory had been bracing for the closure of the Chicken of the Sea facility, which meant nearly 2,000 people would lose their jobs. Because of the tsunamis, the end effectively came a day earlier than scheduled.
Chicken of the Sea is owned by SETlisted Thai Union Frozen Plc (TUF),Thailand's biggest seafood exporter. TUF decided to shift operations from the Pacific island to a new $20-million plant that opened last week in the US state of Georgia.
Meanwhile, the cannery run by StarKist Co lost power in the tsunami and isn't expected to return to full production for another month or so.
The canneries directly and indirectly make up about 80% of all economic activity in American Samoa, which has a population of 65,000 people about a five-hour plane ride from Hawaii.
"It's like we've been hit by an earthquake, a tsunami, and a cyclone all at once," said Governor Togiola Tulafono,who added that the shutdowns would ripple through the economy as newly unemployed and idle workers won't have as much money to spend."When the cannery shuts down, a whole lot of other things shut down. We need to get that company back up and working," he said.
The industry was in trouble even before the disaster because of a 2007 US federal law mandating that the same minimum wage laws that apply to the 50 states be enforced in the Pacific territory. The law is gradually lifting the minimum wage for American Samoa by 50 cents a year until it reaches $7.25 (245 baht) an hour - the same standard as the rest of the country.
The law has increased labour costs for the canneries by more than 30%,even as they compete with canneries in Thailand and Vietnam where the hourly wage is less than $1.
Cannery workers in the territory now earn an average of $5.11 an hour.
StarKist laid off about 350 hourly and salaried workers but it has chosen to stay in Samoa and lobby for a new bill now before Congress that would provide US fishing fleets with incentives to sell their fish in American Samoa. The bill would also pay subsidies to processors,like StarKist, in the US territory.
"It allows American Samoa to be globally competitive again," said Don Binotto, president of StarKist Co."If that is passed, frankly, we see American Samoa as a place where we can continue to do business in the long term."
The two plants sit right next to each other in long, white rectangular buildings along a narrow waterfront in Pago Pago Harbor's small industrial zone.
The tsunamis largely spared both plants even though they destroyed dozens of buildings across the harbour.They did, however, drown the power plant that feeds electricity to StarKist,knocking the plant out of service.
To cope, StarKist is shipping 10 generators to Pago Pago from Los Angeles that will supply the plant with electricity until the local power plant is rebuilt.The plant should be fully operational by the sixth or seventh week after the tsunami, said Mr Binotto.
In the meantime, StarKist is storing 4,000 tonnes, or $13 million worth of tuna, in freezers run on generators.
The tsunami has meant a double disaster for StarKist employees like Fuauli Atisano'e. The tsunamis wrecked the 38-year-old's home, as well as his parents'home next door, in the small coastal village of Tula. Their concrete walls are standing, but their floors are caked with silt and their windows are blown out.
A waterlogged coconut, metal mattress frame and sewing machine are strewn around one of their rooms.
"See that car inside the trees," Atisano'e said,"that's my car."
The father of three hasn't heard yet when he'll be returning to work.
The governor last month proposed that the territorial government buy Chicken of the Sea's COS Samoa Packing plant to keep it open. A committee of territorial lawmakers was due to hold a hearing on the measure the day the tsunami hit, but had to postpone their deliberations because of the disaster.
Chicken of the Sea says it plans to use Samoa Packing as a cold-storage facility for fish caught in the Pacific.
On a recent morning, maintenance workers dismantling the tuna packing and sealing machines were among the few remaining employees on site. They were preparing the equipment for shipment to the new plant in Lyons, Georgia.
"We're still working for two or three more weeks," said Fotu Matola, a 38-yearold father of three."But after that, we're looking for another job [to] to earn some money for the kids and family."
Sunday, October 11, 2009
Trained, loved and eaten
With his big dark eyes,cuddly girth and gentle manner, he didn't look like a fighter. Except for his horns - curved like a scythe, they could inflict serious damage.
He was known only as buffalo No 18, one of 16 specially-trained beasts that made it through to the finals of an annual northern Vietnam buffalo fighting contest that took place recently.
Do Son's buffalo fighting tradition dates back centuries, organisers say, but its modern form has become a big money event with high-priced sponsorship, high-stakes gambling and millions of dong in prizemoney.
For the participants, though, it is most importantly for community pride in the coastal resort of fishermen and farmers near the northeastern port city of Hai Phong.
"I trained this buffalo like an athlete,"Luong Duy Hong,59, said the day before the fight. Mr Hong, a nephew of the buffalo's owner, likened the animal to a professional football team with a big following of fans.
"It's the pride of the whole club. This is Manchester [United]," he said as he walked the buffalo in the late afternoon sun.
Buffalo can still be seen labouring in Vietnam's fields, but the fighting buffalo are different. Like professional athletes, they are scouted and bought with only one thing in mind - to compete.
"I sent my nephews to try to find a proper buffalo," said No 18's owner, Luong Trac Ty,75.
After months of searching they settled on this one, which had no name and was known only by the number painted in white on its dark rump.
The farming family bought it in February for 60 million dong (112,000 baht) and spent another 40 million of their own money on training and upkeep, they said.
That is a large sum in a country whose average per capita income is about 17.8 million dong.
Tradition says Mr Ty's buffalo was brave because its thin hair twirled into small spiral formations above each shoulder and on each side of its rump.
"That's one of the reasons we chose this one," he said.
Bravery is one thing, but a fighting buffalo also needs training. Gesticulating and talking excitedly, Mr Hong said he had spent two hours every day swimming in a river and running with the buffalo, which made it through two preliminary rounds to reach the finals.
After spending so much time with each other, man and buffalo became close -"like brothers", Mr Hong said. But this was their last day together because, win or lose, every buffalo is slaughtered and its meat sold outside the stadium to people who believe it will bring them luck."When he is killed, I will not be there," Mr Hong said.
Owners can recoup some of their expenses from the meat, which sells at a premium, but winning the fight earns them a prize of 40 million dong.
But Mr Hong said buffalo fighting is not a business."We participate for our honour and for the traditions of our area."
The next morning, haze turned the newlyrisen sun into an orange disc before seven teams, each from a district in the Do Son area, paraded to the stadium.
In traditional dress they held altars aloft,carried Buddhist flags and banged drums with their buffalo following behind.
Several thousand people filled the stadium to overflowing. Mr Ty smiled and said his buffalo was ready.
The fights are between two buffalo at a time. Sometimes there is a dramatic charge and a cracking sound as horns smash together,and they push to and fro like wrestlers in a sumo match.
"It's like a martial art," said Nguyen Van Hung,29, a spectator from Haiphong.
"I feel sorry when I see the blood on their faces," said Nguyen Quynh Huong,28, who nonetheless cheered throughout.
The crowd shouted at the violent butting of heads, but was far more restrained than the area's notorious football fans.
At times there was little for them to get excited about; the animals simply stood there ignoring each other.
As soon as one of the beasts turns tail and begins heading toward the exit, he loses.
After months of preparation, Mr Ty's buffalo had its chance. It briefly touched horns with its opponent, which then gave chase. No 18 trotted off, a loser.
The final bout finished just as quickly.A buffalo owned by Hoang Gia Bon, which beat three challengers earlier that morning,rushed towards its last opponent, hooking into its horns and lifting its head high. In about 60 seconds it was over.
"This buffalo was born with the nature to win," Mr Bon said.
The wet-nosed animal's young handlers - among them Mr Bon's son Vu Duc Minh - crowded around, shouting in victory.
As a handler, Minh,17, was on the edge of the field during the fight.
"I was very scared, not for myself but for the buffalo, because he is the pride of the whole extended family and we invested so much energy in him," he said.
His sadness that the animal was to be killed was somewhat tempered by the knowledge that its meat would be offered to their ancestors and to the community's patron saint.
Local legend attributes the festival's origins to the 18th century, when two buffalo about to be sacrificed to the patron saint suddenly began fighting.
The Do Son festival is not the only buffalo fight in Vietnam, but it is one of the most renowned contests."There will be a winner and a loser," Mr Ty said, accepting his animal's defeat."It's a lot of fun."
He was known only as buffalo No 18, one of 16 specially-trained beasts that made it through to the finals of an annual northern Vietnam buffalo fighting contest that took place recently.
Do Son's buffalo fighting tradition dates back centuries, organisers say, but its modern form has become a big money event with high-priced sponsorship, high-stakes gambling and millions of dong in prizemoney.
For the participants, though, it is most importantly for community pride in the coastal resort of fishermen and farmers near the northeastern port city of Hai Phong.
"I trained this buffalo like an athlete,"Luong Duy Hong,59, said the day before the fight. Mr Hong, a nephew of the buffalo's owner, likened the animal to a professional football team with a big following of fans.
"It's the pride of the whole club. This is Manchester [United]," he said as he walked the buffalo in the late afternoon sun.
Buffalo can still be seen labouring in Vietnam's fields, but the fighting buffalo are different. Like professional athletes, they are scouted and bought with only one thing in mind - to compete.
"I sent my nephews to try to find a proper buffalo," said No 18's owner, Luong Trac Ty,75.
After months of searching they settled on this one, which had no name and was known only by the number painted in white on its dark rump.
The farming family bought it in February for 60 million dong (112,000 baht) and spent another 40 million of their own money on training and upkeep, they said.
That is a large sum in a country whose average per capita income is about 17.8 million dong.
Tradition says Mr Ty's buffalo was brave because its thin hair twirled into small spiral formations above each shoulder and on each side of its rump.
"That's one of the reasons we chose this one," he said.
Bravery is one thing, but a fighting buffalo also needs training. Gesticulating and talking excitedly, Mr Hong said he had spent two hours every day swimming in a river and running with the buffalo, which made it through two preliminary rounds to reach the finals.
After spending so much time with each other, man and buffalo became close -"like brothers", Mr Hong said. But this was their last day together because, win or lose, every buffalo is slaughtered and its meat sold outside the stadium to people who believe it will bring them luck."When he is killed, I will not be there," Mr Hong said.
Owners can recoup some of their expenses from the meat, which sells at a premium, but winning the fight earns them a prize of 40 million dong.
But Mr Hong said buffalo fighting is not a business."We participate for our honour and for the traditions of our area."
The next morning, haze turned the newlyrisen sun into an orange disc before seven teams, each from a district in the Do Son area, paraded to the stadium.
In traditional dress they held altars aloft,carried Buddhist flags and banged drums with their buffalo following behind.
Several thousand people filled the stadium to overflowing. Mr Ty smiled and said his buffalo was ready.
The fights are between two buffalo at a time. Sometimes there is a dramatic charge and a cracking sound as horns smash together,and they push to and fro like wrestlers in a sumo match.
"It's like a martial art," said Nguyen Van Hung,29, a spectator from Haiphong.
"I feel sorry when I see the blood on their faces," said Nguyen Quynh Huong,28, who nonetheless cheered throughout.
The crowd shouted at the violent butting of heads, but was far more restrained than the area's notorious football fans.
At times there was little for them to get excited about; the animals simply stood there ignoring each other.
As soon as one of the beasts turns tail and begins heading toward the exit, he loses.
After months of preparation, Mr Ty's buffalo had its chance. It briefly touched horns with its opponent, which then gave chase. No 18 trotted off, a loser.
The final bout finished just as quickly.A buffalo owned by Hoang Gia Bon, which beat three challengers earlier that morning,rushed towards its last opponent, hooking into its horns and lifting its head high. In about 60 seconds it was over.
"This buffalo was born with the nature to win," Mr Bon said.
The wet-nosed animal's young handlers - among them Mr Bon's son Vu Duc Minh - crowded around, shouting in victory.
As a handler, Minh,17, was on the edge of the field during the fight.
"I was very scared, not for myself but for the buffalo, because he is the pride of the whole extended family and we invested so much energy in him," he said.
His sadness that the animal was to be killed was somewhat tempered by the knowledge that its meat would be offered to their ancestors and to the community's patron saint.
Local legend attributes the festival's origins to the 18th century, when two buffalo about to be sacrificed to the patron saint suddenly began fighting.
The Do Son festival is not the only buffalo fight in Vietnam, but it is one of the most renowned contests."There will be a winner and a loser," Mr Ty said, accepting his animal's defeat."It's a lot of fun."
Sunday, October 4, 2009
CP invests in Jilin villages
Charoen Pokphand group has announced the launch of a 39.5-billionbaht project to develop farm villages in Jilin province in the central part of northeastern China.
The project, worth 7.9 billion yuan,has been approved by the Chinese government and involves investment in raising 3 million layers,2 million poultry and 1 million pigs per year.
CP chairman Dhanin Chearavanont made the announcement ahead of the 60th anniversary celebrations of the People's Republic of China on Oct 1.
"CP will offer a fully integrated farm project, or a farm-to-table process, and the finished products will be distributed under the CP brand. Selling price guarantees would assure the income of farmers in the project," said the head of Thailand's biggest agribusiness group and the largest foreign investor in China.
He said the investment conformed with China's policy to improve farm incomes by modernising agricultural villages and promoting more advanced technologies through co-operation among four parties: farmers, private companies, banks and the government.
The Jilin project is part of a CP programme, which has won Beijing authorities' approval, for implementing farm development projects in selected villages in several provinces including Jilin, with a total investment of about 100 billion yuan.
Mr Dhanin said the investments reflected CP's confidence in China's economy, which remains strong with an expected gross domestic growth of 7.1%this year.
CP was the first approved foreign investor in the People's Republic more than 30 years ago and China is its second-largest investment market after Thailand. The group employs 300,000 people worldwide.
"Because CP has seen no impact from the current global crisis, it's the right time to undertake business expansion," said Mr Dhanin.
The project, worth 7.9 billion yuan,has been approved by the Chinese government and involves investment in raising 3 million layers,2 million poultry and 1 million pigs per year.
CP chairman Dhanin Chearavanont made the announcement ahead of the 60th anniversary celebrations of the People's Republic of China on Oct 1.
"CP will offer a fully integrated farm project, or a farm-to-table process, and the finished products will be distributed under the CP brand. Selling price guarantees would assure the income of farmers in the project," said the head of Thailand's biggest agribusiness group and the largest foreign investor in China.
He said the investment conformed with China's policy to improve farm incomes by modernising agricultural villages and promoting more advanced technologies through co-operation among four parties: farmers, private companies, banks and the government.
The Jilin project is part of a CP programme, which has won Beijing authorities' approval, for implementing farm development projects in selected villages in several provinces including Jilin, with a total investment of about 100 billion yuan.
Mr Dhanin said the investments reflected CP's confidence in China's economy, which remains strong with an expected gross domestic growth of 7.1%this year.
CP was the first approved foreign investor in the People's Republic more than 30 years ago and China is its second-largest investment market after Thailand. The group employs 300,000 people worldwide.
"Because CP has seen no impact from the current global crisis, it's the right time to undertake business expansion," said Mr Dhanin.
CP brings village model to China
Charoen Pokphand Group plans to develop three integrated poultry layer farms in selected villages in China where it will likely apply its successful agricultural village management model, especially that of Nong Wah village in Thailand.
The Thai conglomerate entered into a contract with Beijing two years ago to help modernise China's farm sector and promote integrated farming businesses there.
CP Group chairman Dhanin Chearavanont said the group planned to raise about 3 million layers in each integrated egg-laying farm. Each site would also have a chicken-feed production plant and a processing plant for higher-value egg-based products such as powdered and liquid eggs for the food industry.Chicken manure would be used as fertiliser.
"Other necessary facilities will include conveyors to load eggs from farms to processing units to avoid human handling of the products," he said. He did not give specific locations and investment capital involved.
CP Group, Thailand's largest agribusiness group, was the first foreign investor in China. It has invested billions of dollars over three decades in several ventures including shopping malls, the poultry industry, animal feed and motorcycle plants.
Its successful farm operations attracted attention from Chinese officials, who are promoting a programme worth 100 billion renminbi involving four parties:farmers, CP, the China Development Bank and Chinese authorities, CP vicechairman Thanakorn Seriburi said recently.
The programme is to be carried out in some villages in Anhui, Shanxi, Henan,Hunan, Hubei, Jiangxi and Jilin provinces.
Over the past two years, a number of delegations of Chinese authorities have visited farm villages supported by CP,and the Nong Wah agricultural village in Chachoengsao has become an impressive prototype, according to another CP executive.
The Nong Wah project was initiated 30 years ago by Bangkok Bank, CP and the villagers. Each villager was allocated 24 rai, a house, pig breeders and proper facilities to raise pigs with guidance from the company, while bank staff helped train them to manage finances effectively.
After 30 years, villagers were able to repay debts and run the village on their own under the Nong Wah Agricultural Village Company.
According to Mr Dhanin, CP has no plan for further investments in poultry farms, especially layer operations in Thailand. But China continues to hold great business potential given its 1.3 billion population."Excessive investments [in Thailand] would create an oversupply and bring down egg prices, which would definitely affect farmers," he said at a recent seminar on the outlook for the livestock industry, held by the Alumni of the Faculty of Veterinary Science of the Chulalongkorn University Association, and the Animal Health Products Association.
He also encouraged Thai livestock companies to expand investment abroad to tap into growing meat demand.
While CP has a number of investments in livestock in several countries, production remains low when compared with domestic demands."Our operation in Russia has a capacity to raise as many as one million pigs a year but the volume is still far below domestic demand of 16 million pigs," he said.
CP's pig investment in China, while also sizeable, accounts for a mere 6% of the Chinese market, which produces about 46 million tonnes of pork per year.
Enlarged farm sizes, high-quality breeds and stronger marketing were the factors that would improve the Thai livestock business in the future, Mr Dhanin added.
The Thai conglomerate entered into a contract with Beijing two years ago to help modernise China's farm sector and promote integrated farming businesses there.
CP Group chairman Dhanin Chearavanont said the group planned to raise about 3 million layers in each integrated egg-laying farm. Each site would also have a chicken-feed production plant and a processing plant for higher-value egg-based products such as powdered and liquid eggs for the food industry.Chicken manure would be used as fertiliser.
"Other necessary facilities will include conveyors to load eggs from farms to processing units to avoid human handling of the products," he said. He did not give specific locations and investment capital involved.
CP Group, Thailand's largest agribusiness group, was the first foreign investor in China. It has invested billions of dollars over three decades in several ventures including shopping malls, the poultry industry, animal feed and motorcycle plants.
Its successful farm operations attracted attention from Chinese officials, who are promoting a programme worth 100 billion renminbi involving four parties:farmers, CP, the China Development Bank and Chinese authorities, CP vicechairman Thanakorn Seriburi said recently.
The programme is to be carried out in some villages in Anhui, Shanxi, Henan,Hunan, Hubei, Jiangxi and Jilin provinces.
Over the past two years, a number of delegations of Chinese authorities have visited farm villages supported by CP,and the Nong Wah agricultural village in Chachoengsao has become an impressive prototype, according to another CP executive.
The Nong Wah project was initiated 30 years ago by Bangkok Bank, CP and the villagers. Each villager was allocated 24 rai, a house, pig breeders and proper facilities to raise pigs with guidance from the company, while bank staff helped train them to manage finances effectively.
After 30 years, villagers were able to repay debts and run the village on their own under the Nong Wah Agricultural Village Company.
According to Mr Dhanin, CP has no plan for further investments in poultry farms, especially layer operations in Thailand. But China continues to hold great business potential given its 1.3 billion population."Excessive investments [in Thailand] would create an oversupply and bring down egg prices, which would definitely affect farmers," he said at a recent seminar on the outlook for the livestock industry, held by the Alumni of the Faculty of Veterinary Science of the Chulalongkorn University Association, and the Animal Health Products Association.
He also encouraged Thai livestock companies to expand investment abroad to tap into growing meat demand.
While CP has a number of investments in livestock in several countries, production remains low when compared with domestic demands."Our operation in Russia has a capacity to raise as many as one million pigs a year but the volume is still far below domestic demand of 16 million pigs," he said.
CP's pig investment in China, while also sizeable, accounts for a mere 6% of the Chinese market, which produces about 46 million tonnes of pork per year.
Enlarged farm sizes, high-quality breeds and stronger marketing were the factors that would improve the Thai livestock business in the future, Mr Dhanin added.
JIM THOMPSON CAMPAIGNS TO SAVE SILK FARMS
In a small village in Nong Sang district, middle aged women cultivate silkworms, once a prized industry in the Northeast.
"Thirty years ago, almost every home in the Northeast weave silk. Today, there are only a few thousand households that are actively producing it," says Thongchai Popaibul, a purchasing manager for Thai Silk Company, the maker of Jim Thompson silk products.
This proud culture is in danger of disappearing, he warned.
"Most young men and women here go to the cities to find work, leaving the elderly to tend the farms," Thongchai said.
"This trend is true of most provinces, including nearby Khon Kaen and Mukdahan."
There is none of the hustle and bustle of big cities in Nong Sang, only the barking of small terriers and other toy dogs, some of the few visible imports from Bangkok.
The farmers here cultivate rice, apparent by the vast fields of paddy that surround the small village.
But there are also patches of mulberry, the essential food of skillsworms, proof the cottage industry still has legs.
Thongchai, 48, is a veteran buyer of raw silk, which the company depends on for its Bt1-billion global business.
In a push to secure more farmers to cultivate the traditional crop, the Jim Thompson Group supports contract-farming schemes to provide additional incomes for farmers.
The programme enables increased earnings and serves as a safety net when price volatility disrupts the market.
"Silk is one of the more profitable industries in Thailand. Farmers do not need to spend a huge sum of money on machinery and other expensive equipment," Thongchai said.
There is also no need to bear the cost of high electricity bills. Much of the work is performed by manual labour.
"All they need is minimum 2-rai plot of land and hard work to make sure the silkworms are properly fed," Thongchai said.
Once the cocoons are ready, they are boileld for the silk or sold to the company to complete the process, which takes no more than 26 days.
Sirirat Rattanakajorn, another executive of the silk company, said the industry needed protection.
Dwindling supplies in recent years have forced the company to buy from foreign suppliers.
"Our silk programme in the Northeast is part of our corporate-social-responsibility initiative to promote and revive the industry," she says.
To ensure high-quality silk output, the firm assigns supervisors to visit the farms and assist the producers.
In Khon Kaen, a 90-minute drive away, another manager, Chatchai Puliwakin, 57, buys bales of silk at the company's branch.
"This may seem like a busy time for us, but its actually quite slow compared with the long queues we had 30 years ago."
The shop, located across from the main bus terminal, was chosen so that farmers coming in could trade conveniently without having to commute long distances.
The shop is known for its fairness in the purely cash business.
Originally from Bangkok, Chatchai said he preferred life in Khon Kaen.
"I was 27 when I came here. Its amazing how the years slip away so quickly," he said." "Khon Kaen was Jim Thompson's first upcountry branch. This is still the centre for silk traders. Even the best weaves from Surin come here for supplies."
Today, the company is buiding a replica of silk communities in neigh-bouring Nakhon Ratchasima as part of a cultural park for tourists.
"So much has changed in the last 15 years that most of the wooden homes of farmers are gone," Chatchai said.
"We had to search for these old homes and transport them to Nakohn Ratchasima to be reassembled. Most farmers now live in brick houses."
He said there was a need to preserve the romantic setting, in order to remind future generations of the rich heritage that was almost lost in our mad rush to modernise.
"Thirty years ago, almost every home in the Northeast weave silk. Today, there are only a few thousand households that are actively producing it," says Thongchai Popaibul, a purchasing manager for Thai Silk Company, the maker of Jim Thompson silk products.
This proud culture is in danger of disappearing, he warned.
"Most young men and women here go to the cities to find work, leaving the elderly to tend the farms," Thongchai said.
"This trend is true of most provinces, including nearby Khon Kaen and Mukdahan."
There is none of the hustle and bustle of big cities in Nong Sang, only the barking of small terriers and other toy dogs, some of the few visible imports from Bangkok.
The farmers here cultivate rice, apparent by the vast fields of paddy that surround the small village.
But there are also patches of mulberry, the essential food of skillsworms, proof the cottage industry still has legs.
Thongchai, 48, is a veteran buyer of raw silk, which the company depends on for its Bt1-billion global business.
In a push to secure more farmers to cultivate the traditional crop, the Jim Thompson Group supports contract-farming schemes to provide additional incomes for farmers.
The programme enables increased earnings and serves as a safety net when price volatility disrupts the market.
"Silk is one of the more profitable industries in Thailand. Farmers do not need to spend a huge sum of money on machinery and other expensive equipment," Thongchai said.
There is also no need to bear the cost of high electricity bills. Much of the work is performed by manual labour.
"All they need is minimum 2-rai plot of land and hard work to make sure the silkworms are properly fed," Thongchai said.
Once the cocoons are ready, they are boileld for the silk or sold to the company to complete the process, which takes no more than 26 days.
Sirirat Rattanakajorn, another executive of the silk company, said the industry needed protection.
Dwindling supplies in recent years have forced the company to buy from foreign suppliers.
"Our silk programme in the Northeast is part of our corporate-social-responsibility initiative to promote and revive the industry," she says.
To ensure high-quality silk output, the firm assigns supervisors to visit the farms and assist the producers.
In Khon Kaen, a 90-minute drive away, another manager, Chatchai Puliwakin, 57, buys bales of silk at the company's branch.
"This may seem like a busy time for us, but its actually quite slow compared with the long queues we had 30 years ago."
The shop, located across from the main bus terminal, was chosen so that farmers coming in could trade conveniently without having to commute long distances.
The shop is known for its fairness in the purely cash business.
Originally from Bangkok, Chatchai said he preferred life in Khon Kaen.
"I was 27 when I came here. Its amazing how the years slip away so quickly," he said." "Khon Kaen was Jim Thompson's first upcountry branch. This is still the centre for silk traders. Even the best weaves from Surin come here for supplies."
Today, the company is buiding a replica of silk communities in neigh-bouring Nakhon Ratchasima as part of a cultural park for tourists.
"So much has changed in the last 15 years that most of the wooden homes of farmers are gone," Chatchai said.
"We had to search for these old homes and transport them to Nakohn Ratchasima to be reassembled. Most farmers now live in brick houses."
He said there was a need to preserve the romantic setting, in order to remind future generations of the rich heritage that was almost lost in our mad rush to modernise.
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