Yupin Pongthong
The Nation
September 21, 2012 1:00 am
Charoen Pokphand Group is leaning towards investing more in Indochinese countries in light of their growing economies and regional trade liberalisation through the Asean Economic Community in 2015.
Cambodia, Laos, Myanmar and Vietnam have a wealth of natural resources that could support the group's products from farm to table. In particular, their political stability is conducive to production. However, Myanmar is just beginning to open up its market and relax some stringent regulations to draw more foreign investors.
Thailand should focus on setting up plants in those countries for re-exporting to third countries, CP believes.
CP executives heading offices in these high-growth countries met yesterday in Bangkok. They agreed that abundant resources, cheap labour and political stability would help smooth operations.
Sakol Cheewakoset, president of CP Cambodia and CP Laos, said Laos had overcome its landlocked geography by connecting to more trading partners via road. This has drawn more investors from China to the country.
Cambodia has great potential to become Thailand's raw-material production base, particularly for maize. It should be able to double annual production to 4 million tonnes.
The human resources in those two countries, especially young people, are ready to learn more about technology to support foreign investment.
"Business obstacles in the two countries are not a serious issue. Japanese businesses, which are most concerned about regulations and laws, have already invested there, such as Minebea and Sumitomo Bank," Sakol said.
The corporate tax rate in Cambodia is only 20 per cent and 24 per cent in Laos, compared with 30 per cent in Thailand, he said.
Trade between Thailand and Cambodia was between Bt60 billion and Bt70 billion last year and should hit Bt100 billion in the future. Trade with Laos was a little lower, at Bt40 billion to Bt50 billion. Thailand enjoys a trade surplus with both countries.
CP has set up a feed-meal plant in Vientiane and plans to spend Bt150 million to build another one in Champasak province. A pig farm worth between Bt200 million and Bt300 million pig farm will be completed next year. The capacity of its food-processing plant will be doubled to 120,000 tonnes by the end of this year.
The group also spent Bt200 million for farm-business expansion and Bt20 million for food-plant expansion.
Boonkiat Cheewatragoongit, senior vice president for corporate strategy and business development in CP's agricultural industry and food business group, said Myanmar was just opening its doors to democracy, which would lead the country to enjoy great economic opportunities in a year or two. The increase in the daily labour wage from 1,000 kyat to 2,000 kyat (Bt71) will also increase people's purchasing power.
"The Dawei Port project will create a big business opportunity, so Myanmar is not our competitor but a trading partner," he said.
CP's business in Myanmar now comprises a feed-meal plant with the capacity of 250,000 tonnes per month, a layer-hen and poultry farm with the capacity of 1 million birds per week, and a food-processing plant with total production of 7,000 tonnes per year.
Chainan Nuphet, senior vice president of CP Vietnam Corporation, said the weak point of Vietnam was that transport was not well developed. However, Vietnam has already constructed a water tunnel through the river,??? while Thailand has not. Foreign firms will enjoy almost the same investment privileges as Vietnamese businesses.
"The high-potential business in which to invest in Vietnam is hospitals, as the investment in this sector is still low," he said.
CP in Vietnam is mainly focusing on the domestic market, with a feed-meal plant and livestock and aquaculture farms. Its sales in the country grew 20 per cent to Bt42 billion last year and reached Bt21 billion in the first half of this year.
The group has set aside Bt1.2 billion for another feed-meal plant with the capacity of 700,000 tonnes and Bt600 million to establish two processing plants for pangasius fish and shrimp to facilitate exports of chilled products.
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Source: http://www.news.thethailandlinks.com/2012/09/21/cp-group-plans-more-investment-in-indochina/
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