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Food, Poultry Companies Invest in Future Growth

by 5m Editor
31 August 2010, at 12:05p.m.

THAILAND - Strong exports and growing confidence in the food sector have encouraged recent investments, especially from poultry meat companies.

The bright outlook for Thailand's food exports has drawn substantial new investments in the livestock industry, with expansion in meat products driving the country closer to its ambition of becoming a major world food supplier.

Bangkok Post reports that the country's food exports in the first half of this year grew a robust 15.9 per cent year-on-year to 411.63 billion baht (THB). Estimates for the entire year are THB830.16 billion, which would be a 10 per cent increase from 2009.

Favourable prospects have raised the confidence of investors looking to expand as applications seeking incentives from the Board of Investment (BoI) have increased.

The BoI reported that 17 livestock and aquatic breeding and processing projects received investment promotion during the first seven months this year. The projects, ranging from farms to processing units, have a combined investment value of more than THB4.2 billion.

Prominent projects include a THB1.03-billion ready-to-eat meal venture from Songkla Canning Plc, and poultry and animal feed production expansion programmes by two major chicken producers and exporters, Betagro Group and GFPT Plc.

A Betagro subsidiary, B Foods Products International, received incentives for its broiler chicken farming site in Nakhon Ratchasima. The THB528-million project aims to farm 17.36 million chicks a year to feed its production plants in the area.

Krung Thai Farm Co received investment perks for three projects in chicken farming and animal feed with a combined investment capital of THB845 million, according to Bangkok Post.

Sukhum Panyakorn, an investment analyst for GFPT, said the Krung Thai projects, to be completed by 2012, would add 150,000 chicks a day to the GFPT production lines, increasing its capacity to 250,000 chickens per day.

The expansion aims to support GFPT Nichirei (Thailand), a THB1.56-billion joint venture between GFPT and Japan's leading food company, Nichirei Food Inc, to make frozen and processed chicken for export.

The venture started operations on a small scale earlier this year and will become fully operational in December with the capacity to produce 30,000 tonnes of cooked products for export to Japan.

Mr Sukhum said the group was also increasing animal feed capacity by establishing a new feed plant in Chon Buri with the capacity to produce up to 500,000 tonnes, increasing its animal feed production to one million tonnes a year.

The expansion is intended to cash in on the increased import quota the European Union allocated to Thailand this year of 160,000 tonnes.

The move helped increase Thailand's chicken exports to the EU to 93,000 tonnes in the first half this year, a 7.5 per cent rise year-on-year.

Strong demand from Japan and Asian countries drove chicken meat exports in the first half to increase by 8.66 per cent year-on-year to 200,560 tonnes and experts expect exports will reach 400,000 tonnes this year worth 53.3 billion baht, up from 397,069 tonnes worth THB52.7 billion in 2009.

Kukrit Arepagorn, manager of the Thai Broiler Processing Exporters Association, said Thailand ranks at the top for exports of cooked and semi-cooked products, thanks to high production skills in cutting and the ability to produce various products to meet market demand.

He said that of the 397,069 tonnes of chicken meat exported last year, 378,809 tonnes were cooked and semi-cooked items.

But for raw meat exports, Thailand lags behind Brazil and the US, which ship more than two million tonnes of mostly raw chicken meat a year.

Thailand's large-scale production facilities and product quality have raised the profile of the chicken industry to become a significant global food source and attract foreign investors, concludes the Bangkok Post report.