CPF LOOK TO BALANCE FEED, FOOD AND FARMS IN FIVE YEARS

       Charoen Pokphand Foods hopes to balance its business portfolio evenly among feed, food and farms within five years as part of its long-term development plan to reduce operating risk while increasing profits and dividends.
       "CPF's future is really focused on two core businesses - feed and food," Adirek Sripratak, president and CEO, said yesterday.
       Today feed accounts for 34-35 per cent of CPF's sales, followed by food at 19 per cent, while farms control the lion's share of 47 per cent.
       The company eyes sponsoring a leading soccer team in a European league in a few years when food hits 20 per cent of total revenue. The move would help CP become a global brand.
       The five-year plan has been drawn to avoid business risks mainly from the farm sector, which would easily suffer damage from unexpected environmental events.
       However, the company has to adopt outsourcing through contract farming to guarantee raw-material supplies.
       The plan was also designed to generate steady earnings, with net profit margins improving to 5 per cent so the company can carry on with its policy of paying out 50 per cent of net profit as dividends.
       "We don't want to focus on total sales growth anymore. The most important thing for us is to increase net profit for the good of our shareholders and business development," he said.
       The company also reported that its net profit had skyrocketed 197 per cent year on year to Bt4.11 billion in the third quarter, while its operating profit set a new high of Bt8.08 billion and earnings per share reached Bt1.20.
       Its total revenue is projected to increase 3-5 per cent to Bt160 billion this full year.
       Adirek pointed to growing investments overseas as the major contributing factor to the record net profit. It realised revenue from its joint venture CP All, the operator of 7-Eleven - the country's biggest convenience-store chain - as well as CP Vietnam.
       Domestic business accounts for 68 per cent, followed by business abroad (17 per cent) and exports (15 per cent).
       To support continued growth, the company will focus on expanding abroad, particularly in Russia and the Philippines. It will invest US$30 million (Bt1 billion) on a pig farm in Russia and $65 million on shrimp- and fish-feed mills in Manila.
       The company has set investment for next year at about Bt4 billion for both here and abroad.
       The stronger baht has not hamstrung the company's operations, as it is offset by its foreign-exchange income.
       Forex earnings have amounted to $800 million, while imports cost $600 million. The company has also purchased foreign exchange forward to avoid currency risk.
       "We're not worried about the exchange rate, just the political turmoil," he said.