Cargill invests in Korat, CP buys major American food producer

investment2American chicken producer Cargill will invest $50 million to expand its poultry processing facility in Thailand, while CP, the Thai agro-industrial giant that dominates the Kingdom’s food production sector, became a significant player in the American market last week by purchasing Minneapolis-based Bellisio Parent, owner of brands such as Boston Market and Atkins, for just over $1 billion.

The two announcements demonstrate that private investment between Thailand and the United States remains vibrant despite uncertainties over the global economy and the future of regional trade agreements under the incoming U.S. administration.

Cargill said its expansion in the northeastern province of Korat (Nakhon Ratchasima) would create 1,400 new jobs, and the company will also engage with independent farmers in the community to serve as suppliers. Cargill employs 13,500 people in 14 locations across the Kingdom.

“Cargill has been in the Thai poultry industry for 25 years and has grown to become the leading exporter of fully cooked chicken products in the country,” said Hans Kabat, president of Cargill Protein Southeast Asia. “I attribute this to our uncompromising approach to food innovation, quality and safety, a talented and efficient local workforce working in a strictly safe environment, and a close partnership with the Thai authorities.”

Meanwhile, CPF, or Charoen Pokphand Foods, a subsidiary of the CP conglomerate that also owns telecommunications company True, signed a purchase agreement on Thursday with seller Bellisio Consolidated Equity, according to a statement from CP. It “will enable CPF to gain access to the North American market,” it said. The transaction should be completed within 180 days and is subject to customary closing conditions and regulatory approvals, the statement added.

CPF CEO Adirek Sripratak said the acquisition “is in line with CPF’s strategy to expand into high-potential food markets.”

Food production is a major strength of the Thai economy and crucial to its social fabric. The Kingdom is the only net food exporter in Asia. However, aside from the popularity of Thai cuisine and exports of relatively raw products such as sugar and rice, Thai food processing companies have had only limited success so far in gaining a foothold in the U.S. market.

CPF is Thailand’s largest producer of chickens, and among the leaders in shrimp and seafood. The firm has been a star performer on Thailand’s stock market in recent years. In the late 1970s, it became the first foreign company allowed to invest in and do business in China since 1949, and since then has expanded rapidly across the region.

Joel Conner, chairman and CEO of Bellisio group, said the deal should boost growth for Bellisio and support CPF’s vision of being the “kitchen of the world.”
Bellisio group reported net sales of $668 million so far this year through September. Founded in 1990, the company has four facilities located in Ohio, California and Minnesota.

Charoen Pokphand’s owner billionaire Dhanin Chearavanont is rated as Thailand’s richest man by Forbes magazine, which also ranked CP Group as the world’s 20th largest company. The firm was founded as a seed shop in Bangkok’s Chinatown nearly a century ago in 1921.

Over the decades it expanded into agricultural production. As it grew, it evolved into a conglomerate with interests in real estate, mobile phones, internet and cable television services, insurance, restaurants, convenience stores, hypermarkets and automobile production.