September 16, 2016 5:00 pm JST
My Personal History

Dhanin Chearavanont (16): Asian expansion and hopes of a hometown return

The feed plant CP Group built in Taiwan in the 1970s

As I noted before, Charoen Pokphand Group has had business relations with Japan's Takii & Co. since my father's time. On my watch, our company's association with Japan would become markedly deeper.

We built our first poultry slaughtering plant in Bang Na, on the outskirts of Bangkok, and it was there, in 1972, that we introduced rapid freezing equipment from Japan.

Soon, we began exporting frozen chicken to Japan via trading house Itoman Corp. (now Nippon Steel & Sumikin Bussan). Seeing CP's success, other Thai companies quickly piled into the chicken-raising business -- at one point 30% of Japan's chicken imports came from Thailand.

Due to an outbreak of avian influenza, Japan banned imports of fresh chicken from Thailand from 2004 to the end of 2013. Fortunately, beginning in the 1990s, CP had teamed up with Japanese food producers and restaurant chains and steadily switched from being a supplier of fresh chicken to a producer and exporter of cooked and processed foods. Even today, Japan accounts for 20% of our total exports.

Connections everywhere

In the early 1960s, I made my first trip to Taiwan, stopping there on my way to Japan. There were few taxis at the airport, so my brother's friend was kind enough to come pick me up in his Volkswagen. It seems overseas Chinese have personal connections just about everywhere. With the help of friends in Taiwan, we were able to begin operating a feed plant on the island in 1967.

I went to school in Swatow (Shantou) in China, so I could speak the Chaozhou dialect of that area, but I had never gotten the hang of Mandarin, the country's standard language. Through conversations with people in Taiwan, I gradually mastered the language, something that would prove an incredible help in the years ahead.

Later we also began raising chickens and processing meat in Taiwan, and we eventually took our local subsidiary public.

Hong Kong has long been another of CP's important operation bases. In the late 1950s, we established a feed and egg import company there, and in the 1970s built a local feed plant. We also established a holding company to supervise the group companies in charge of trade and other operations. Even today, several of those companies, including CP Pokphand Co., which is involved in agribusiness, are listed in Hong Kong.

We expanded into Malaysia and Singapore as well, and my third brother, Sumet, broke into the Indonesian market. As our business spread across Asia, it was only China -- where I had spent my elementary and middle school years -- that remained closed to us.

During the Cultural Revolution, which lasted from the 1960s through the 1970s, China's more pragmatic leaders, including Liu Shaoqi and Deng Xiaoping, lost all standing and private economic activity was forbidden. China became isolated from the rest of the world, even clashing with fellow communist state the Soviet Union. Anyone in China who tried to have a relationship with a foreign entity was persecuted for being "reactionary." Even overseas Chinese could not have normal personal relations, to say nothing of business ties, with those inside the country.

My father operated a farm in his hometown of Swatow during the 1950s, but he left China just as the Cultural Revolution was unfolding, barely escaping with his life. Because he had lived in China for so long, however, he was not able to return to Thailand, either, as the country had adopted a staunch anti-communist policy. As a result, he resided in such places as Hong Kong and Singapore, keeping a close eye on China's future all the while. My father always told me: "Be prepared to return to my hometown."

The more China implemented the policies of the Cultural Revolution, the poorer the country became. My father always believed that once the situation became untenable, change would occur. I was of exactly the same opinion.

Just as my father prophesied, the Cultural Revolution ended in 1976 and in 1977 Deng Xiaoping was restored to power. The resurgent Deng began advocating for economic reforms and the opening of China to the outside world.

Dhanin Chearavanont is chairman of the Charoen Pokphand Group.

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