Thai firm's growth from animal feed to major insurer

5th December 2012, Comments 0 comments

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 --


© 2012 AFP

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