Cpf fdi ppt


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Cpf fdi ppt

  1. 1. Charoen Pokphand Food Kitchen of (FDI)
  2. 2. Foreign Direct Investment Kitchen of
  3. 3. What is FDI? Internationalization strategy Developed countries will benefit from natural resource, cheap labor, and avoid trade barrier. Developing countries will benefit from capital, knowledge and technology. Does not include stock exchange investment
  4. 4. Horizontal FDI Vertical FDI Conglomerate FDI Types of FDI
  5. 5. Horizontal FDI Firm will invest in the same business as the firm does in their own countries. • Example: Toyota factory in Kentucky, United State
  6. 6. Forward and backward • In forward vertical FDI, the firm will play a role as a supplier and send finished goods through subsidiaries or dealers to host countries. • Example: Volkswagen sell though many car dealer instead of using only one main dealer. Vertical FDI
  7. 7. Forward and Backward • In backward vertical FDI, the firm will invest in the industry that support their business. • Example: Ford Company build engine factory in Mexico in order to decrease their cost. Vertical FDI
  8. 8. It is the integrate investment between horizontal and vertical. • Example: Hong Kong firm set factory in china and produce nonrelated product. Conglomerate FDI
  9. 9. Methods of FDI Greenfield • Begin everything from zero Ex: Buying land Mergers and Acquisitions • Joining between two firms Ex: Buying local firm asset
  10. 10. Pros & Cons of FDI Pros • For developed countries Decrease cost and increase profit • For developing countries Capital, knowledge and technology Cons • The host countries may lose their natural resources because of non strict laws.
  11. 11. Effects of FDI Stimulate nation economy Stability of FDI Social development Infrastructure development and technology transfer “Crowding in” and “Crowding out” Scale and pace of investment Skewed distribution
  12. 12. Kitchen of Company Profile
  13. 13. Brief Overview Established in 1978 Agro-industrial Business Core Business • Animal Feed • Farming
  14. 14. Two Main Operations Thailand • Manages all operation in Thailand • Distributes in domestic Overseas • Overseas Operation in 11 countries
  15. 15. 3 Main Product Categories Feed Farm • Breeding, Farming, and basic meat processing Food • Semi, fully cooked meat, and frozen products
  16. 16. Products of CPF Consumer products • Ready-to-eat products • Ready to cook products • Fresh products Agricultural products • Feed • Breed
  17. 17. Consumer Product Ready-to-eat& Ready to cook products • Appetizer, and Ready meal
  18. 18. Fresh Products • Chicken • Eggs Consumer Product
  19. 19. Agricultural Product Livestock Feed • Powder • Pallet • Concentrate
  20. 20. Agricultural Product Feed • Leader and Pioneer • Over 600 Feedmill plants • High Quality Feed
  21. 21. Agricultural Product Breed (Farm) • Leader in the research • Modern Farming system • Branch all over the countries
  22. 22. Kitchen of Requirements Considering FDI
  23. 23. Factors to Consider Assessment of internal resources Competitiveness Market analysis& Expectation
  24. 24. Assessment of Internal Resources Internal resources Internal support Domestic performance
  25. 25. Competitiveness Competitor • How well they do • Market share Competitive advantage • Comparison
  26. 26. Market Analysis & Expectation Market research • Local regulations • Local preferences • Customer groups Scenario Analysis • Worse case
  27. 27. Kitchen of CPF’s Historical Development
  28. 28. Charoen Pokphand Group Found by Chia Ek Chor and Chia Seow Hai in 1921 Started a small shop  “Chia Tai Chung” Expanded Business to Hong Kong, China, Malaysia and Singapore International Trading (1921-1954)
  29. 29. In 1954, Jaran started feed business known as “Charoen Pokphand”. Thai Economic Development Plan Dhanin worked for the government’s slaughterhouse (1958-1963) General manager  CEO Mr. Dhanin Chearavanont Animal Feed (1954-1970)
  30. 30. Poultry farming Joint venture (60:40) with Abor Acres “The contract farming system”. CP became a major player in agro-industry Integrated Agro-Industry (1970-1979)
  31. 31. Sausages & Meatballs “Chester Grill” Shrimp Farming Siam Makro & 7-11 Infrastructure Sector Cable TV Network Future Integration & Diversification (1980s-Present)
  32. 32. 0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00 1994 1995 1996 1996 1997 Frozen Shrimps Exported (1994-1997) (Million US$) Source: Bank of Thailand
  33. 33. Sausages & Meatballs “Chester Grilled” Shrimp Farming Siam Makro & 7-11 Infrastructure Sector Cable TV Network Future Integration & Diversification (1980s-Present)
  34. 34. Kitchen of CPF’s International Expansion
  35. 35. International Expansion CPF invested in 11 countries around the world: Turkey Taiwan China India Indonesia Philippine Malaysia Vietnam Russia England Laos
  36. 36. Strategy • A major food producer in the world • Expand distribution channels • A country that has high rate of population • Research and development International Expansion
  37. 37. Main Products • Chicken feed • Breed farming, livestock farm and meat process manufacturer • semi-cooked food and ready-to-eat International Expansion (Turkey)
  38. 38. The biggest and most successful nation of CPF’s FDI is in Taiwan, called “CPE”. One of the leading manufacturers in Taiwan Gain major market shares “Ready-to-eat” is very popular International Expansion (Taiwan)
  39. 39. Mr.Dhanin Chearavanont stated that : International Expansion (China) “CP’s investment in China focuses mainly upon agriculture. Whether it is producing animal feed, or raising livestock such as pigs, the latest technology and management systems are utilized.” (Dhanin, 2011)
  40. 40. Highest rate of population and potentials. Main products are feed, farm and food. CPF just took over CPP (Second largest market shares in China) and become the major shareholders (74.18%). It will boost the net profit and enables growth in the future. International Expansion (China)
  41. 41. Second largest rate of population. Government supports foreign investors. Main products are feed and farm. CP brand in India is well-known Trade with local wholesalers and retailers International Expansion (India)
  42. 42. Some products in domestic consumption, supplies are less than demands. International Expansion (India)
  43. 43. Kitchen of Characteristics to the Overall Growth and Internalization Process
  44. 44. Fully-Integrated Process Understanding Market Finding Good Strategic Partner Characteristics
  45. 45. The ability to integrate everything from feed material production to retail distribution channels. Fully Integrated Business
  46. 46. Fully Integrated Business
  47. 47. Fully Integrated Business
  48. 48. Understand markets in developing countries • Creates opportunities • Invest in developing countries • Marketing and distribution strategy • “Know-How” > “Know-What” Understand Markets
  49. 49. Strategic Partners American agricultural multinational “Abor Acres” – Modern technology – Import chicken breeding stock from USA – Large scale Production – More involved in international Market American Company “Dekalb Co.” – Reduce trade barriers – Research and development of green bean and maize breeds Japanese Company “Mitsubishi Corporation” – Major target market for shrimp exportation
  50. 50. Kitchen of Oversea Investment Risks S
  51. 51. Foreign countries’ rules and regulations Economic conditions Political changes Minimum wage Foreign exchange Etc. Oversea Investment Risks
  52. 52. Investment Policy: Control and Follow-up system • Appointments of Representative of Managing Director and Finance executive Conduct feasibility studies thoroughly • Ensure that the investment is profitable and it is worth the risk. Meetings in Thailand with Overseas operation management teams (Every 6 months) • Reviewing performance and updating plan. Risks Management “High risk, High return”
  53. 53. Kitchen of Operating Results
  54. 54. Thailand Operation Oversea Operations
  55. 55. Operating Results of Each Business Line
  56. 56. Conclusion
  57. 57. Thank You!