Thai Firm's Growth From Animal Feed To Major Insurer

[webfact]

Thai firm's growth from animal feed to major insurer

BANGKOK, Dec 6, 2012 (AFP) - Thai conglomerate Charoen Pokphand, which was Wednesday tipped to buy HSBC's stake in China's second largest life insurer, has grown dramatically from its origins as a humble seed shop in Bangkok.

The firm, backed by Thai tycoon Dhanin Chearavanont, is set to snap up the bank's 15.57 percent holding in Ping An Insurance Group for $9.4 billion in what will be the biggest foreign purchase by a Thai firm.

The deal marks a new chapter for Charoen Pokphand (CP), which has expanded into a huge conglomerate with interests in sectors from retail to telecoms and software to real estate.

Founded in 1921 as a small seed shop in Bangkok's China town, the firm branched into the production of animal feed, then livestock farming and shrimp production.

With a stated aim of becoming the "Kitchen of the World", CP has sought a number of international ventures and according to its website currently employs over 280,000 people and invests in 15 countries worldwide.

It saw annual revenue of more than $33 billion in 2011.

Dhanin Chearavanont, 73, and his family topped the Forbes Thailand rich list this year, with a net worth of $9 billion.

The firm has a long-standing association with China, where it is known as the Chia Tai Group, and was one of the first overseas agribusiness companies to invest there in the late 1970s.

CP, which has over 100 feed mills in China, also has various other operations in the country, from selling motorcycles to owning Shanghai's mega Super Brand shopping mall.

Ping An, an insurance and financial services conglomerate, said its new stakeholder did not plan to make any changes to its strategy and business model.

CP was unavailable for comment in Thailand on Wednesday, with its offices closed for a public holiday.

The deal is one of several large international investments by Thai firms looking to grow overseas.

Thai energy giant PTT Exploration and Production Public Co. last week said it wanted to raise up to 94.25 billion baht ($3.1 billion), which would be the nation's biggest equity offering, to fund its expansion plans.

Earlier this year PTT struck a deal to buy East Africa-focused Cove Energy for £1.2 billion ($1.9 billion), trumping a rival offer from Royal Dutch Shell.

Another major investment push from Thailand this year has come from Chang Beer maker Thai Beverage (ThaiBev) and its partner TCC Assets.

In September the firms, both controlled by Thai billionaire Charoen Sirivadhanabhakdi, launched a $7.1 billion bid to take over Singapore's soft drinks and real estate company Fraser and Neave (F&N).

-- Dow Jones Newswires contributed to this story --

-- (c) Copyright AFP 2012-12-06

[asiawatcher]

Thai investors now realise by expanding outside Thailand, they find ease of doing business with less graft to pay...

[BrianCR]

Don't bank on that! Do you really believe that there is less graft in the rest of Asia? As for Europe see how much easier everything becomes when you offer a "little support"!

[Thai at Heart]

Don't bank on that! Do you really believe that there is less graft in the rest of Asia? As for Europe see how much easier everything becomes when you offer a "little support"!

Cp has exactly who they need in their pockets already. Its the new guys who need to pay.

[geriatrickid]

The Thai investment is still a minority stake. The firm will still be run by the Chinese. Dividends will be decided by a Chinese controlled board. In China, despite the trappings of a a "free market", the government and the Military still have their fingers in every pie. That means tax policy and "administrative" decisions can turn an expected profitable deal into a money losing proposition should the foreign investor run afoul of someone important. Foreign investors have limied rights in China and I cannot think of one foreign investor that has taken on Chinan's ruling entities and won its case. Even big foreign multinationals in the aviation and automobile sectors walk on eggshells in China. One plays in the Chinese sandbox at one's peril.