Charoen Pokphand Group

Transformed family’s seed and feed company into One of Asia’s biggest argo-industrial giant
CP’s operation were broken down into 10 business groups

  • Agrifoods
  • Marketing and distribution
  • Internal Trading
  • Telecommunications
  • Seed/fertilizer/plant protection
  • Automotive & Industrial products
  • Crop integration
  • The pet business group
  • Real estate
  • Petrochemicals
  • Business Division Turnover
ehlx1.jpg

CP’s various business consisted of 250 companies in 20 countries
One of the world’s largest feed-mill operators with mills in 14 countries

  • Chai Tai seed shop in Bangkok in 1921
  • Charoen Pokphand Feedmill in 1953
  • CP began raising and trading livestock in 1970s
  • CP established marketing and distribution group in the mid-1980s
  • 7-Eleven [sign a franchise agreement with U.S.-based Southland Corp.]
  • Lotus Supercenter [partnered with U.K.-based Tesco
  • Makro[A JV between CP and Netherlands-based SHV Group
  • CP expanded into the aquaculture business in 1985
  • CP entered the telecom business in 1993

Strategic Alliances
- A critical components to CP’s strategy for both its vertical and horizontal growth
- Enables the group eventually to build and own business in:

  • Automotive & Industrial products
  • Petroleum & petrochemicals
  • Telecommunications
  • Real estate
  • Land development

Strategic Alliances

  • U.S-based Arbor Acres, the world ‘s largest broiler – chicken breeder :CP’s first and most valuable alliances
  • Avian, ,a U.S based chicken breeder and competitors of Arbor Acres: in a partner ship in China. CP eventually introduced its own breed of chicken (CP group Brown Broiler) to Asia

CPF

  • Listed on the stock exchange of Thailand, CPF had publicly traded agrifoods company since 1978
14c61.jpg

CPF

  • Sales of BT 74.8 billion
  • CPF accounted for over 80% of CP’s agro industrial and aquaculture business
  • 30% domestic market share in broiler and swine
  • CPF’s operation included
  • Raw material procurement
  • Selecting and developing qualified breeders
  • Managing animal farming system
  • Meat processing
  • production
  • Products were distributed to supermarkets, fast food retailers (such as KFC)
  • and local market

Quality

  • Good animal nutrition
  • Genetics
  • Farm management

The united Kingdom, one of CPF’s largest markets, emphasized the importance of animal welfare

CP in China

  • CP was the first foreign investor to China,
  • In 1979, a JV with U.S based Continetal Grain Corporation to build and operate a feed mill in Shenzhen
  • By 2002, there were 173 CP companies operating in China, 100 of which were agribusinesses
  • CP invested a number of retail operations in China

Introduced Makro & Lotus in the mid – 1990s
Exploring a 7-Eleven franchise operation – In 2002

  • Investment in noncore business

Partnership and a JV in motorcycle, automobile, petrochemical and TV business

Logistic
CP was building a fleet of box trailers (to replace the slower moving)
CP eventually planed to enter into third party logistics once its network was up and running in China

Management Structure
CP was a highly decentralized organization. All of its 250 companies operated independently. Each business group, headed by a president, reported to Dhanin. Only Finance and policy issue were handled at the corporate level
Allowed nonfamily member employee to become president
Family member remained very active on the finance side [In fact, company president could not fire their chief financial officers (CFO); firing CEOs was a decision for the board

Recovering from Recession
By the time the financial crisis hit the region, CP has accrued high debt levels, most notably from TelecomAsis and its Super Brand Mall in China
CP responded to the trying financial situation by moving back to its core business. The group sold stakes in a number of investment.

New systems
CP was focusing on upgrading its technological capabilities in order to
create financial, management and human resource systems
CP investing in enterprise resource planning (ERP) to keep track of individual performance and then create a pay-for-performance system
“Incorporating the new technology would be the easy part. Getting to use it would be the challenge. However, it would entail altering the mind-set of CP managers. Many senior executives had been with CP for 20 – 30 years and were used the “old ways” of conducting business

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License