Dhanin Chearavanont (12): An unexpected setback
In my early 20s, life was smooth sailing. Though still young, I was already single-handedly responsible for egg exports at Thailand's government-affiliated poultry cooperative.
At the time, companies in Japan, the U.S. and Europe were already using plucking machines to remove the feathers from chickens and other fowl. The Thai government had a machine made in Denmark, but it could only be used if the chickens were of a uniform size.
Japan had a machine that used a different plucking process. In the early 1960s, the cooperative decided to send me to observe chicken processing facilities there. It was my first visit to the country. The Japanese officials who received me must have been startled to find the Thai government had dispatched a 21-year-old on such an important mission.
I don't mean to be rude, but even Japan's processing facilities did not seem very advanced. Nevertheless, I purchased 16 plucking machines and took them back to Thailand. Dr. Chamnan Yuvaboon, the head of the cooperative, advised me: "Machines alone aren't enough for automated processing. We must make the size of the birds uniform."
In Thailand, most chickens were locally raised, free-range birds, so their sizes and ages varied greatly. How could we raise chickens that were all the same size? This problem remained unresolved while I was at the cooperative. Overcoming it is what propelled CP Group into a global company -- but that was still in the future.
Global tensions, local woes
I married when I was 23 years old. Unfortunately, my professional fortunes were about to take a turn for the worse.
During the 1960s, relations between the world's two biggest communist powers -- China and the former Soviet Union -- went from bad to worse. China criticized the Soviet Union's brand of socialism as revisionist and accused it of making concessions to capitalism. The Soviet Union, in a rage, halted all assistance to China, which meant the country had to quickly repay the loans it had received from the USSR.
China was strapped for cash at that time, so it opted to repay its debts in exports of local products. Because Chinese manufacturing was still in its infancy, the country began exporting large amounts of agricultural products instead.
Initially, China shipped hogs to the USSR, to the extent that Hong Kong suffered a pork shortage. Beijing then turned around and sharply expanded agricultural exports to Hong Kong, causing the prices of pork and eggs to plummet. As a result, exporting eggs to Hong Kong from Thailand was no longer profitable.
The cooperative's funds ran dry. Because it was set up to assist chicken farmers, the cooperative never had much money to begin with. I was at my wit's end. Even if we wanted to improve our business operations, we didn't have the financial means to do so. One consolation was that since our management had been clean, none of the cooperative members blamed me for the difficult situation.
At the age of 25, I lost my job. The Thai government dissolved the cooperative and again began allowing anyone to freely export eggs.
In 1964, I returned home. At that time, my oldest brother, Jaran, was serving as chairman of the company, and my next-oldest brother, Montri, was serving as president and managing the feed business.
Montri offered me the presidency. He was a person with lots of ideas and was involved in a number of ventures beyond feed, including trading in corn, mung beans and soybeans, and managing a plant that made jute bags for holding grain. He also wanted to specialize in commerce and plant management.
So I took over as president and began overseeing the feed business. In terms of the value of feed handled, CP was already the largest company in Thailand. With around 200 employees, it was also fairly large in terms of its workforce, but I had gained valuable experience managing an organization during my time at the cooperative. My oldest brother, trusting his little brother with this important role, left all the details to me.
Dhanin Chearavanont is chairman of the Charoen Pokphand Group.