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Operations in Brief

Leading Agro-Industrial and Food Conglomerate

Charoen Pokphand Foods Public Company Limited is the leading agro-industrial and food conglomerate in the Asia Pacific region. The Company operates in both the livestock (swine, broilers, layers, and ducks) and aquaculture (shrimp and fish) businesses. The vertically integrated businesses incorporate the manufacturing of animal feed, animal breeding and animal farming; meat processing, the manufacturing of semi-cooked meat and fully-cooked meat; food products and ready meal products, as well as the meat and food retailer and restaurant businesses.
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The Company is a leader in feed production and distribution in Thailand with its main products including swine feed, chicken feed, duck feed, shrimp feed and fish feed, in form of concentrated feed and completed feed in either powder or pellet. The feed is formulated according to nutrition requirement by different types and age groups of animals. The Company manufactures and sales livestock feed products under brand “CP”, “Hi-Gro”, “Hogtonal”, “Hyprovite”, “Anvipro”, “Star Feed”, “Novo”, “Safe Feed”, “Erawan”, “C.F.”, “Hilac”, and aquatic animal feed under brand “CP”, “Star Feed”, “Hi-Grade”, “Blanca”, “Stargate”, “Safe Fish” and “Safe Fo”.

The Company has its manufacturing plants situated in all regions of Thailand. The Company distributes feeds to large-scale farmers directly and to small farmers through dealers situated nationwide. The feed prices shall be determined by the cost of production at each period of time which shall be in conformity with raw material market prices and approved by the Department of Internal Trade, Ministry of Commerce.

The Company has implemented the main marketing strategies by providing customers with full services, starting from offering quality feed and breeding stock, providing technical advice on animal farming and modern farm management techniques by the Company’s experts through seminars, establishment of learning centers, regular dissemination of information on animal farming according to international standards via printed material and social media, in order to promote sustainable growth of the animal husbandry industry in Thailand.

The Company has set up its central purchasing unit in Thailand responsible for the procurement of raw materials used in feed production and for data gathering and analysis of quantity and prices of raw materials trend in Thailand and foreign countries. Main raw materials for feed production are agricultural crops such as corn, soybean meal, wheat flour, broken rice and fish meal, etc. Regarding the raw material purchasing, the Company gives importance to all relevant matters, such as sources and quality of raw materials, compliance with the Company’s policy on human rights, social and environment impact as well as competitive costs in the industry. It is also the Company’s policy to give preference to purchase raw materials from domestic sources, particularly around areas where feed manufacturing plants are located in order to support local farmers and to reduce distances and energy consumption in raw material transportation. If the quantity of locally-purchased raw material is not sufficient due to inadequate quantity or inferior quality, raw materials will be imported.

The Company has focused on social and environmental factors involved in its supply chains; whereas, the Company has procured raw materials which can be traced back to their sources whether they are obtained from lawful, environmental-friendly and sustainable sources. Ban Bueng Aquatic Animal Feed Plant in Chonburi province is the world’s first manufacturing plant accredited with standard by the International Fishmeal and Fish Oil Organization’s Responsible Supply Chain of Custody or IFFO RS CoC, which has proven the Company’s commitment and responsibilities for its purchasing and use of fishmeal from sustainable sources. Moreover, the Company has also been awarded with the Best Aquaculture Practices (BAP) by the Global Aquaculture Alliance (GAA), which is the internationally recognized standard on good fishing practices.

Regarding the production process, the Company places importance on innovation and technologies to improve quality and efficiency of production in order to obtain high-quality and safe feed products with competitive cost. Each feedmill plants are equipped with laboratories and testing equipment to check the quality of raw materials before fed into the production process whereas all production process has been controlled with automated system to ensure that the quality of feeds is consistent and meet the required standard. As a result of the Company’s effort, its high-quality feed products provide good feed conversion ratio (FCR) which helps reduce the cost to farmers.

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The Company is a major animal farming operator in Thailand with swine, broilers, layers, ducks, shrimps and fish as the main products. The Company’s animal breeding and husbandry farms are situated in several provinces throughout Thailand. Products under the farm business can be divided into 2 main categories as follows:

1. Animal breeds
The Company emphasizes on high quality and healthy breeds suitable for farming conditions in each country and meet consumers’ preference. Besides having its own breeders, the Company has imported certain breeds of animals for its farms or for sales to distributors or local farmers. The Company has continuously researched and developed its breed, for examples, CP-Kurobuta breed which is tender and savory pork, or strong CP shrimp fry.

Regarding the marketing policy, the Company places importance on its after-sale services, with branch offices situated nationwide as centers for dissemination of animal farming techniques and farm management to farmers.

2. Live Animals, Products from Live Animals, and Basic Processed Meat
Key products in this business are categorized into 2 groups. The first group is live animal and products from live animal, such as fattening swine, broiler, duck, chicken egg and duck egg, which are sold domestically. The second group is basic processed meat, such as fattening swine, broiler and duck from farms to processing plants for cutting and trimming into pieces as per consumers’ demand before packaging and freezing or chilling for distribution under brand to retailers, wholesellers and food services. Selling prices are subject to demands and quantity of outputs available in Thailand and in the world market or subject to the agreed prices in case of OEM products. The Company main marketing strategy is to create consumers’ awareness of the product’s quality and safety throughout the supply chain.

The Company selects and tests the breeds according to the principle of natural genetics and has placed great emphasis on farm management technology for development of proper animal farms to meet the market demands and suitable for farming environment in order to improve the production quality and efficiency as well as the establishment of operation process with international standards and the information system for quality management and traceability of the whole system, thus, for monitor and improvement of operational efficiency of the entire value chain. The Company has also employed the Best Practice on Biosecurity, which is the practice on effective prevention of diseases. In livestock farms, Evaporative Cooling System has been used to provide the fully enclosed animal houses with suitable living conditions. Automatic feeding and watering has been provided with lighting appropriate for each type of animals. The Company’s animal houses are free of transmission or spreading of diseases from animals and insects and controlled by computerized system throughout the period of animal husbandry.

The Company has continuously developed technologies used in animal husbandry and has employed the Good Manufacturing Practice (GMP) of the Ministry of Agriculture and Cooperatives, international standards, environmental management standards, animal welfare standard that animal welfare and well-being shall be taken into account together with modern animal husbandry which is free of use of the growth hormones forbidden by laws. The Company’s animal husbandry is not overpopulated while wounded or sick animals shall be cured by veterinarians of the farms who shall check the health condition of animals during the animal husbandry and animals shall be transported by specific transport vehicles. Moreover, the Company is accredited with the Red Tractor Assurance (RTA) from the United Kingdom for its management of animal welfare, covering its poultry farming operations for processed food manufacturing since 2003 and continuously accredited every year until 2015. Such standard is regarded as the strictest standard of production in the poultry farming industry nowadays.

In addition to animal farming, the Company also promotes animal farming to farmers, including fattening swine and broilers. The Company shall select farmers who have their own farming areas and equipment. The selected farmers shall be provided with the Company’s support in terms of animal breeds, feed, veterinary supplies and technical knowledge on animal farming.

Regarding the aquaculture farming, the Company has emphasized the probiotic farming to avoid the use of drugs and chemicals and has also employed the shrimp culture techniques in a closed system using the circulating water for reduction of water use, prevention of animal epidemics and environmental friendliness. Moreover, the Company has employed the Best Aquaculture Practice (BAP) to the nursery, shrimp farms and processing plants, together with its business operation with social and environmental responsibility and care for food safety and traceability of products.

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The Company has added the value of basic processed products from animal farms by processing them into cooked food products and ready-to-eat food products, then, chilling or freezing and distributing the products under customers’ brands, the Company’s brand and under brand . The Company has conducted researches and surveys regarding consumers’ preferences and behavioral changes who tended to focus on convenience and health care in all age groups such as housewife, working people, teenagers, etc. The Company has distributed products through various distribution channels, including traditional trade, modern trade such as convenience stores, supermarkets and food service businesses such as fast food outlets, etc. Moreover, the Company has its own retail and food outlets, other wholesalers and retailers. Regarding export to foreign markets, the Company has its branch offices and dealers in 18 countries and has distributed products through importers in foreign countries. At present, the Company has exported its products worldwide; whereas, major importing countries include European Union, United Kingdom, Japan, USA and other Asian countries.

The Company has food research and development expertise team that has committed to the creation of food products to response to consumers’ preferences and changing lifestyles. The Company has given the importance to the production of quality food products in terms of nutritions, tastes and safety. Cooked food products locally distributed and exported are, for example, Chicken Frank Sausages, Scheweinewurst Sausages, which are premium sausage under Bucher Brand, Kurobuta pork steak, shrimp wontons, cooked shrimps, Karage chicken, seaweed chicken rolls, teriyaki chicken, rice with chicken green curry, noodles with stewed duck, roasted duck, meat balls and Carbonara spaghetti, etc. The Company has produced food products under brand, Kitchen Joy, Five Stars, BK, BKP and for distribution under brands of customers. In 2015, the Company has launched innovative food products to meet the changing lifestyles of consumers such as ready-to-eat tender chicken breast, onsen egg, Japanese style steamed eggs cup, omega egg tofu with vegetable, chick fingers and ready-to-eat healthy foods under CP Balance brand such as baked rice with cereal and chicken, hot and sour soup with pangasiusdory fish with brown rice, spice whole wheat spaghetti and savory boiled brown rice, etc.

The Company has implemented its main marketing strategy by promoting consumers aware of brand and using innovation in developing and producing food products with nutritional value, good tastes, quality and safety throughout the production chains and creating convenience for consumers and promoting customers’ accessibility to its products in all occasions by means of sale channel management.

Due to high awareness of the quality and safety of foods, the Company has committed to the production process improvement in accordance with the international standards by adoption of the international standard management systems such as quality management system (ISO9001), Good Manufacturing Practices (GMP), Hazard Analysis and Critical Control Point (HACCP) System. Moreover, the Company has also adopted several standard systems that have met demands of specific groups of customers in its management such as Global Standard for Food Safety: BRC (The British Retail Consortium), Halal and Best Aquaculture Practices (BAP) Standards, etc.

The Company has employed international standards on Occupational Safety and Health Administration Management System (OSHAS18001) and CPF Safety Health Environment and Energy Standard (CPF SHE&EN Standard) in its production processes for good health and safety of employees. Moreover, the Company has also employed the international standards on environmental management (ISO14001) as its environmental management in accordance with the laws.

Retail and Food Outlets

To provide consumers with more convenient choices of access to its products, the Company has invested to expand its distribution channel for Company’s products. The main type of products includes ready-to-serve meals, ready-to-eat chilled and frozen products under brand, and meat products either cutlets or cooked, chilled or frozen. These sales channels can be categorized into 5 following types:

1. Five Star Business   operates as a franchise business. There are six types of Five Star kiosks, namely roasted-chicken kiosk, fried-chicken kiosk, Hainan chicken rice kiosk, noodle soup kiosk, ready-meal kiosk, and sausage kiosk. The Company also expand its Five Star Business into Vietnam, India, Laos and Cambodia.

2. Chester’s   is a fast-food restaurant business operated by Company and franchisees.

3. CP Kitchen   is a fast-serve restaurant business operated under the concept of “Fresh, Full, and Fair”.

4. CP Fresh Mart   engages in the retail business, selling fresh food, cooked food and ready-to-eat products under the CP and CP Fresh Mart brands. CP Fresh Mart, a center of fresh, clean, safe and high-quality foods, operating under 2 models: as a retail store, and as community refrigerator. In late 2015, CP Freshmart launched new store concept called Modern Home Meal Solution which responds to the new generation of consumers who prefer to cook easy meal by providing a wide array of ingredients, fruits, vegetable, ready-to-cook and ready-to-eat products.

5. CP Food World   is a food court with a variety of food outlets owned by the Company and food outlets from outside. CP Food World has become a leading player in the food court business and a center of quality food outlets emphasizing on tasty of foods and professional services, attention to consumers’ demands and accessibility to all age and gender groups of customers. In addition to the strong points of food quality, CP Food World is also a food court with standard of cleanliness of equipment, including sanitation of service-providing employees and with all aspects of quality under modern atmospheres to become one of the food court for young generations.In addition, CP Food World has also expanded its businesses in full-scale catering service channels, divided into 2 channels, as follows:

• Catering services such as meal boxes and snack boxes as well as integrated catering services.

• Food services for patients: CP Food World has the nutrition department under the supervision of professional chefs who shall supervise all menus of foods with good quality, safety, good tastes and all working processes in accordance with international standards such as JCI and HACCP to strive towards the goal of becoming professional service teams in hospitals.