Consistently Poor Profitable Growth at CP Foods
Background
Charoen Pokphand Foods Public Company Limited is a Thailand-based company engaged in agro-industrial and integrated food businesses for domestic sales and exports, with presence in 16 countries, including China, Vietnam, and Taiwan.
Revenue is mainly sourced from its livestock business and 80% is generated in Asia.
Business Description
CPF with its core business in Thailand, operates in 16 countries and exports to more than 30 countries. CPF has developed an integrated agro-industrial and food business consisting of three business segments namely Feed, Farm and Food.
Feed, which accounts for 45% of 2017 revenue, is the main revenue contributor for CPF. This business segment manufactures, supplies and distributes livestock and aquaculture feed products in both concentrated feed and complete feed forms.
Another 37% of revenue comes from the Farm segment which operates in animal breeding and commercial animal farming including producing primary processed meats. Major types of animals CPF farms and breeds include swine, broilers, layers, ducks, shrimp and fish.
Food segment offers varieties of fresh, processed, cooked and ready-made products under the following brands: Kitchen Joy, Taste Inc, and BK. To expand distribution, CPF also owns food retail outlets such as Chester Restaurant, 5-Star Chicken, and CP Fresh Mart Retail Store.
Leadership
Dhanin Chearavanont has been the Chairman of CPF since 2000. He is also currently Chairman of other companies in the CP group such as CP ALL PCL (CPALL TB) and CP Pokphand Co., Ltd and True Corp PCL (TRUE TB). His name has been listed on Forbes World’s Richest People List multiple times. His educational background is from Thailand’s National Defence College.
Adirek Sripratak has served as the president of CPF since 2003 and was appointed Vice Chairman in 2017. He also holds the presidency in multiple other companies within the CP group as well as being the Chairman of Thai Broiler Export Association. He received his doctorate degree in Economics from Chaing Mai University, Thailand and still participates as one of its council board members.
World Class Benchmarking
Profitable Growth has been among the lowest of its peers, ranked at #9 in the past 12 months among 600 large Consumer Staples companies worldwide.
Profitability has been stable at low ranks as well, consistently ranked at #8 from 2014 up until the past 12 months when it fell to #9. Growth has fallen in rank since 2016.
Like Profitability, Asset utilization remained low over the years, Profit margin has shown slightly better rankings.
Sales growth is the only part to achieve above-average ranking in the past 12 months. Margin change has shown the same ranks as Growth since 2016.
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