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Saturday 28 February 2015

CPF boosting regional position, targets key player in Cambodia

CHAROEN POKPHAND FOODS (CPF) aims to enhance its position as a leading agricultural-industry operator in Asean by acquiring the remaining shares of a major business in Cambodia in which it currently has a 25-per-cent stake.

The company will ask shareholders at its annual general meeting on April 22 to approve the increase of its shareholding in CP Cambodia to 100 per cent, and to approve a dividend payment of Bt0.45 per share for CPF.

The board has approved the proposed acquisition of 75 per cent of CP Cambodia at a cost of Bt2.8 billion, the food giant said yesterday.

After completion of the transaction, CP Cambodia will become an indirect wholly owned subsidiary of CPF.

The board considers the transaction to be beneficial to CPF as Cambodia's agro-industrial and food business has strong growth potential. In addition, CP Cambodia has an expansion plan to become a more integrated player in Cambodia.

Adirek Sripratak, CPF president and chief executive officer, said CP Cambodia was already a leading player in Cambodian agribusiness.

Its revenue last year was about Bt8.3 billion ($259.375 million), with net profit coming in at Bt744 million. Most of the company's revenues were derived from swine and poultry business.

The acquisition will enhance CPF's position as a leading agribusiness operator in Indochina, which has strong growth potential in economic and consumption terms, he said.

In its operating results for last year, CPF reported revenue of Bt426.03 billion, with sales from international operations accounting for 58 per cent of income and expected to grow at an average annual rate of 15 per cent for the next five years.

The Cambodian acquisition is consistent with the company's strategy, which focuses on expanding business overseas, said the company chief.

CPF reported net earnings of Bt10.5 billion, up 49 per cent from the previous year.

The board will ask shareholders to approve a dividend of Bt0.45 per share, which when combined with the interim dividend of Bt0.30 that has already been paid will result in an overall dividend of Bt0.75 for last year's operations.

For this year, CPF plans to focus on expanding business overseas, acquiring companies related to the company's core business and enhancing financial management to make the business more cost-competitive.

CPF has set a sales-growth target of at least 10 per cent for the year.

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