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Business

Thailand's CP Foods to buy 33% stake in Polish poultry business

$51.6m investment in SuperDrob targets European distribution

BANGKOK -- Charoen Pokphand Foods, the core subsidiary of Thai conglomerate Charoen Pokphand Group, will deepen its presence in the European poultry market by purchasing a 33% stake in Poland's SuperDrob Capital Group for 49.5 million euros ($51.6 million).

SuperDrob supplies fresh meat and processed chicken products to wholesalers, retailers and restaurants across Europe from its three plants in Poland. In 2015, its sales rose 10% on the year to 212.4 million euros.

CP Foods said in a Dec. 30 stock exchange filing that the investment is aimed at helping it expand in Europe, where it already sells chicken exported from Thailand. Having local production will lower tariff rate quotas and transportation costs, as well as enable the company to respond more quickly to customer requests, the company said.

CP Foods aims to generate 75% of its sales abroad by 2020. For the first three quarters of 2016, the ratio was around 62%, unchanged from the same period a year earlier.

Although the company expects most of its growth to continue to be driven by developing Asia, it is also looking for a boost from Western markets with higher-income consumers.

In December, CP Foods completed a $1.075 billion acquisition of U.S. frozen entree maker Bellisio Parent. Other deals include the acquisition of a ready-to-eat meal producer in Belgium and a restaurant chain in the U.K., as well as the launch of a microwaveable burger brand in the U.K.

SuperDrob is CP Foods' first investment in poultry operations in Europe and will give the Thai company greater control of the food-industry supply chain. With six group companies, SuperDrob is active not only in chicken processing but also animal feed production, animal farming operations and logistics.

The deal is slated to be completed within three months pending approval by the Polish authorities.

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