Jun. 12--The listed chicken producer GFPT Plc plans to boost its production by at least 30,000 birds per day through its new joint venture with Japan's leading food company Nichirei Food Inc.

A contract establishing the new venture, GFPT Nichirei Thailand (GPN), was signed last November. When fully operational it is expected to increase GFPT's sales by about 30-40 percent, said Anan Sirimongkolkasem, managing director and chairman.

The Thai company, which holds 49 percent of the 1.56- billion-baht joint venture, is planning to build 30 chicken farms on a 10,000 rai compound in Chon Buri. The province is the company's main base with about 150,000 chickens slaughtered each day.

Output from the additional farms would be enough fund a new slaughtering plant with an annual capacity of 87,500 tonnes of fresh meat, which can be processed into about 30,000 tonnes of cooked products for export to Japan.

According to Dr Anan, the win-win deal allows GFPT to expand its product range by supplying the Japanese market where Nichirei has a strong domestic distribution network, servicing more than 30,000 outlets at leading convenience stores including FamilyMart, 7-Eleven, and Lawson.

The Japanese partner will benefits from the supply of quality-controlled raw meat. The venture will also see Nichirei become a fully integrated business.

Construction of the new plant is expected to be completed by the latter half of 2010. GFPT would start to fully realise revenues from the venture by 2011.

The new company will employ about 2,000 workers. But recruiting workers for the business is generally quite hard because they are bound by tight quality controls and a heavily monitored working process, he said.

"We have to offer accommodation and work-training classes, and now we have to send head-hunting teams to schools to get new staff," said Dr Anan.

GFPT would concentrate on exports of about 20,000 tonnes a year, which includes supplying McDonald's via McKey Food Services (Thailand), a joint venture with Keystone Foods Corporation (USA), he said.

"Making products for the domestic market would be our longer-term plan," he said, commenting on leading chicken company Charoen Pokphand Foods' success through local retail sales.

Dr Anan, also the president of the Thai Broiler Processing Association, said Thailand's chicken industry would grow slightly in 2009, from exports of 380,000 tonnes of meat last year.

The industry had expected a decline this year, after falling global consumption and a surge in foreign buyers' inventories late last year. This saw export prices cut beyond US$3,000 per tonne from $5,000.

However, demand for Thai chicken improved in the first four months of the year after Japan turned away from China over food safety concerns. The EU also has allocated an import quota that benefits Thai suppliers.

He said shipments rose to 118,000 tonnes in the first four months, compared with 117,000 a year year earlier, ensuring stronger export growth by end of the year. GFPT's sales would rise about 5 percent this year, from 11 billion baht in 2008, he said.

The company achieved 2.3 billion baht in sales in the first quarter, up from 2.2 billion over the same period last year. But net profit declined to 76 million baht from 109 million.

GFPT shares closed yesterday on the Stock Exchange of Thailand at 20 baht, unchanged, in trade worth 1.36 million baht.

-----

To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com.

Copyright (c) 2009, Bangkok Post, Thailand

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

A service of YellowBrix, Inc.