Chia Tai grows in China: CP subsidiary to invest an additional $1 billion

The Chia Tai Group, the Chinese unit of the Thai agribusiness giant Charoen Pokphand, will increase its investment in China of more than US$1 billion (32.4 billion baht) over the next six years.

New projects will consist mainly of shopping complexes, hotels, condominiums and office buildings.

"CP's investment in China will be relatively higher than in Thailand, given the country's massive population and newfound affluence," said Soopakij Chearavanont, co-chairman of Super Brand Mall in China.

"Funding will stem mainly from the group's Chinese revenue, joint-venture partners and bank loans."

CP was the first foreign investor in China. Over nearly four decades it has poured billions of dollars into such ventures as shopping malls, the poultry industry, animal feed and motorcycle plants.

The group's retail operations consist mainly of the nationwide Lotus Supercenter chain and the Super Brand Mall in Shanghai.

Mr Soopakij said the new investment would be concentrated in four areas: Luoyang city in Hainan province; Shandong province on the eastern edge of the North China Plain; Guangzhou city in Guangdong province near Hong Kong; and Puxi, the old area of Shanghai.

The Luoyang project, tentatively dubbed Chia Tai City Plaza, alone will cost $2 billion and feature a shopping centre, entertainment complex, hotel, exhibition centre and government offices, including customs, a clearing house and other public services. It is now in the design process. Construction will take place over two three-year phases.

Chia Tai has already bought up land for other projects in Guangzhou and Puxi.

Mr Soopakij said the number of Lotus Supercenters would expand from 73 now to 1,000 over the next decade at a cost of $5 million each. Lotus Supercenter has targeted sales of 12 billion yuan (57.4 billion baht) this year, up from 11 billion last year.

Meanwhile, Chia Tai has introduced its CP food brand at the World Expo 2010 in Shanghai, which will run until Oct 31.

It spent 40 million baht to develop the CP pavilion at the expo and is an authorised food supplier for the event.

Vitit Pootanasup, executive vice-president of Charoen Pokphand Foods Plc, a listed flagship company of the CP Group, said CPF would expand ready-to-eat foods under the CP brand in China.

After conducting marketing research in the country for the past three years, CPF is now quickly expanding its presence in Shanghai and Beijing, especially for shrimp, he said.