Thai largest global firm, CP, cut global expansion as global return miss expectations

Thailand largest global conglomerate, CP, is cutting its global expansion, because returns from global operations have failed to meet expectations. Charoen Pokphand Foods Pcl, Thailand’s largest agri business company, said it would slash its five-year investment budget by a third to around US$1.6bil and pare back revenue targets as its foreign farms were performing below expectations. The plans, which include a renewed focus on cutting debt, represent a less aggressive stance from CP Foods, one of several major Thai firms that has bought up overseas assets in the past few years, emboldened by record stock prices and armed with cheap loans. “We probably invested too fast in the past,” president and chief executive Adirek Sripratak told Reuters. “Now, we have to scale down and do not need to be that aggressive.” CP Foods, which is controlled by billionaire Dhanin Chearavanont, will also cut its revenue growth target to an average of 10% over the next five years from its earlier goal of 10% to 15% . The company, which is the world’s biggest shrimp farmer and a top maker of animal feed, has expanded into China, Vietnam, India, the Philippines, Turkey and Russia. Its loss-making chicken operations in Turkey have underperformed expectations in particular. “The performance of our foreign operations are not in line with what we had expected. We should have made higher profits, but an increase in raw materials prices and a downturn in the farm industry affected our operations,” Adirek said. (Source)

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