Charoen Pokphand

Charoen Pokphand Group
เครือเจริญโภคภัณฑ์

Type	Private (family-owned)
Industry	Agro-Industry & Food Telecommunications Retailing
Founded	1921
Headquarters	Bangkok, Thailand
Key people	Dhanin Chearavanont, Chairman and CEO
Products	Meat, Frozen food, Restaurants, Telephone companies, Internet service provider, Hypermarkets, Convenience Stores, Automobiless, Cable Television,
Revenue	US$ 46.5 billion (2013)[1][2]
Owner	Chearavanont family
Number of employees	300,000
Subsidiaries	Ping An CP ALL Charoen Pokphand Foods True Corporation Lotus Supercenter Super Brand Mall Siam Makro Chester Grill Restaurants Dayang Motors
Website	www.cpgroupglobal.com

The Charoen Pokphand Group^[3] (CP; Thai: เจริญโภคภัณฑ์; rtgs: Charoen Phokkhaphan) is Thailand's largest private company and is one of world's largest conglomerates. It consists of three core businesses that operate in agribusiness and food, retail, and distribution, and the telecommunications industries with investment in over 20 countries. Founded in 1921, the CP Group currently employs, through its subsidiaries, over 300,000 people with offices and factories worldwide. It is the largest shareholder in one of the world's largest life insurance companies, Ping An, with over US$461 billion in assets. It is also the second largest shareholder (4.9%) in Itochu Corporation of Japan, which does some US$141 billion in revenue. With some 200 subsidiaries in China, CP Group, known in China as "Zheng Da" (正大), was the country's first foreign investor, and, through is extensive investments, is credited with changing the country's dietary habits and leading China's green revolution.^[4]

History

Charoen Pokphand traces its beginnings back to 1921, when the Chinese immigrant brothers Chia Ek Chor (谢易初) and Chia Siew Whooy (谢少飞) started a seed store named Chia Tai Chueng in Bangkok's Chinatown during the reign of King Rama VI. They imported seeds and vegetables from China and exported pigs and eggs to Hong Kong.

The company increased its scope from selling vegetable seeds under the trademark of "Rua Bin" (Aero plane) to production of animal feed under Ek Chor’s two elder sons, Jaran Chiaravanont and Montri Jiaravanont. The company further integrated its business to include livestock farming, marketing and distribution, under Dhanin Chearavanont. By the 1970s, the company had a virtual monopoly on the supply of chicken and eggs in Thailand.^[5]

The company was famous for vertical integration expanding into several business lines, adding breeding farms, slaughterhouses, processed foods production, and, later, its own chain of restaurants. CP had also gone international, launching feedmill operations in Indonesia in 1972, exporting chickens to Japan in 1973, then moving into Singapore in 1976.^[4]

In the 1980s, as China opened up to foreign firms, the firm became the preferred partner for international brands such as Honda, Wal Mart, and Tesco. CP's family ties with the mainland enabled it to become the first foreign company to establish itself in the newly created Shenzhen Special Economic Zone, where the company set up its Chia Tai Co. (Chinese: 正大集团; pinyin: Zhèngdà Jítuán) subsidiary. By the early 1990s, CP had launched some 200 subsidiaries in China. CP's massive investment in poultry production on the mainland was credited with changing the country's dietary habits, as per-capita consumption more than doubled by the end of the decade.^[4]

In 1989, CP joined with Solvay of Belgium to launch Vinythai Co., a manufacturer of polyvinylchloride.^[6] The following year, the company formed a partnership with the U.S. telecommunications firm of NYNEX to launch TelecomAsia (TA) and began construction of its own fiber-optic telephone network.^[4]

Starting in 1993, many subsidiaries went public. TA, Charoen Pokphand Feedmill, Siam Makro and Vinythai were listed publicly at the Stock Exchange of Thailand, as well as its Hong Kong subsidiary, CP Pokphand to the Hong Kong exchange, a Shanghai-based animal feed and poultry group to the Shanghai exchange, a real estate development arm, Hong Kong Fortune, to the Hong Kong exchange, and Ek Chor China Motorcycle to the New York exchange.

After the Asian financial crisis in 1997, C.P. consolidated into three business lines under its main “brand names”: foods (C.P. Foods), retail (7-Eleven), and telecommunications (True). The company sold its stakes in the Tesco Lotus venture with Tesco in 2003 due to its crisis policy in order to focus on 7-Eleven, in which, unlike Tesco, CP owns a majority, as its flagship retail arm. However, the company kept its shares in Tesco Lotus outlets in China.^[7]

In 2013, Charoen Pokphand has got the clearance to buy HSBC's stake of Chinese Ping An Insurance.^[8] On May 10, 2013, in spite of a lack of loan from the China Development Bank,^[9][10] HSBC said "it was selling the 15.6 per cent stake at HK$59 a share" to Charoen Pokphand Group.^[10][11]

In 2014, CP announced a tie-up with the Japanese general trading company Itochu under which CP acquired 4.9% of Itochu's listed stock for about US$1 billion, and Itochu in turn acquired a 25% stake in a Hong Kong-listed CP group company, CP Pokphand Co., for about US$854 million. This transaction made CP the third-largest shareholder in Itochu, and was marketed as an alliance between the two conglomerates with a focus on developing international food trading opportunities.^[12] In 2015, CP and Itochu announced that they would jointly take a US$10.4 billion stake in China's CITIC Group, forming a trilateral alliance with Itochu and CP each holding 10% of CITIC's stock, one of the largest foreign investments in a Chinese state-owned company.^[13]

Subsidiaries

Charoen Pokphand Foods

Known as Charoen Pokphand Foods Plc.,^[3] CPF was established in 1978 with operations in animal feed production, livestock breeding, further processing and trade. Currently, CPF invests overseas in nine countries, has subsidiaries in 17 countries and exports to over 40 countries. Furthermore, CPF is today the leading producer of feed and one of the largest producers of poultry in the world. Charoen Pokphand Foods is listed in the Stock Exchange of Thailand under the code: CPF.

C.P. Foods has a revenue of approximately US$14 billion (2012), with a market capitalization of over US$8 billion (2012)

CP ALL

CP ALL Public Company Limited is the flagship company of the Charoen Pokphand Group’s marketing and distribution business. It is the Thai licensee of 7-Eleven since 1989 and operates 6,479 convenience stores under that trademark in Thailand. This is the third largest number of stores after the United States and Japan.^[14]

CP All completed FY 2012 with approximately $12 billion in revenue, and currently has a market capitalization of over $13 billion (2013).

7-Eleven

CP All Plc. is the sole operator of 7-Eleven convenience stores in Thailand. The first 7-Eleven outlet was opened in 1989 on Patpong Road in Bangkok. At the end of 2014, the company had a total of 8,127 stores nationwide. Of the total, 3,648 stores are in Bangkok and environs (45%) and 4,479 stores are in provincial areas (55%). There are 3,570 corporate-owned stores (44%), 3,916 franchise stores (48%), and 641 sub-area license stores (8%). An average of 9.7 million customers visit 7-Eleven stores each day. In 2014, the company expanded another 698 new stores both as stand-alone stores and stores at PTT gas stations. At the end of 2014, the company had 6,986 stand-alone stores (86%) and 1,141 stores in PTT gas stations (14%). The company has plans to open approximately 600 new stores annually, with the goal of 10,000 stores in 2018.^[15]

True Corporation

The Telecommunications Business Group was established during the late 1980s. Known as True Corporation Plc,^[3] True offers a ‘convergence’ of voice, video and data services across its integrated communications platform. Based in Bangkok, True currently services more than 23 million subscribers to its various services, which includes Thailand’s third-largest mobile operator (True Move), the country’s largest broadband and dial-up internet provider, largest fixed-line phone operator in Bangkok Metropolitan Area, electronic cash and payment services, personal communication telephone, data services, VoIP services, online portals, online games and is the only nationwide cable-TV provider (True Visions). True Corporation is listed on the Stock Exchange of Thailand under the code: TRUE

True Corporation generated approximately US$3.1 billion in revenue in 2012, it has a market capitalization of about US$4.3 billion (2013). It is spinning off its infrastructure operations into a new telecommunications fund set to IPO at about US$1.8 billion, putting the group's total value at about US$5 billion ^[16]

True Growth Infrastructure Fund

True GIF is a US$2 billion fund set up to manage True's extensive telecommunication assets including Thailand's largest fibre optic network and largest 3G & 4G cell networks. It became Thailand's second largest IPO ever in late 2013. True Corp is True GIF's largest shareholder.

Lotus Supercenter

CP Lotus Corporation is a retail operation in China.^[17]

C.P. Pokphand

Listed in Hong Kong, CPP is one of the world's largest producers of feed and one of China's leading agricultural companies with factories nationwide.^[18]

C.P. Fresh Mart

A Thai-based chain selling frozen foods and finished products, now has over 700 branches.^[19]

Dayang Motors

One of China's leading motorcycle producers, recently signed a joint venture to begin production of cars in Thailand. Its motorcycles are exported to South East Asia, Europe, and Africa.^[20]

Siam Makro

Held through C.P. All, Siam Makro is Thailand's largest cash and carry store. C.P. All purchased Siam Makro for US$6.6 billion in 2013.

C.P. Land

C.P. Land manages several Bangkok properties including C.P. Tower 1 & 2. It is listed through C.P. Land Infrastructure Fund and has a market capitalization of over US$300 million.

Slavery allegations

After a several-month-long investigation the British newspaper The Guardian claimed that Charoen Pokphand (CP) Foods purchases fishmeal, which it then feeds to its farmed prawns, from suppliers that own, operate or buy from fishing boats manned with slaves.^[21] The Guardian claimed that after the slaves are bought for roughly US$250, the working conditions on those boats include forced labour with 20-hour work days, forced drug use, starvation and executions.^[21]

References

External links

• Corporate website
• International Directory of Company Histories, Vol.62: Charoen Pokphand Group, St. James Press, 2004