CPF set to expand biosecure shrimp farm

Charoen Pokphand Foods Plc (CPF) is set to expand its biosecure shrimp farming system in Trat province over the next two years after completing a four-year first phase at the end of 2008.

The expansion of the Roiphet Integrated Shrimp project, which promotes white shrimp cultivation in an environmentally friendly closed system, is expected to start by 2010 once production under the one-billion-baht first phase has stabilised.

The investment budget for the next phase was not disclosed but it is likely to be less than one billion baht, according to Sujit Kaewchum, vice-president of the listed flagship of the Charoen Pokphand Group (CP).

To meet growing demand for food safety, CP Group set up its first biosecure shrimp farm on a 3,000-rai site in Trat, 230 kilometres east of Bangkok, in 2005.
The operation currently produces about 600 tonnes of high-quality shrimp products that comply with strict food-safety regulations in developed markets such as the European Union. Production capacity is slated to increase to 4,000 tonnes in 2009.

All the output has been supplied to its existing processing plant in nearby Rayong, which ensures fresh products and also saves on logistics costs.

CPF expects its shrimp exports to be worth about US$60 million in 2009, a drop of 15% from 2008 largely because of shrinking world consumption.

However, it still expects its export volume to increase by 5-10% to about 40,000 tonnes. Shipments to the EU make up 45% of its exports, with Japan accounting for 25-30%, the United States 5-10%, and South Korea and Australia making up the rest.

In a bid to offset shrinking consumption, CPF itself is committed next year to focusing on research and development and studying consumption behaviour in each market. It aims as well to expand more into fast-food chains.

The company also plans to expand more in new potential markets to offset declining sales in traditional markets.

Next year, for example, CPF plans to open new branches in Ukraine and Portugal.

According to Mr Sujit, the biosecure closed farming system guarantees the production of white shrimp that are free of disease and safe for human consumption and can give the company greater access to markets with stringent safety standards.

The high-tech closed farming system involves temperature control and automatic feeding. It also facilitates year-long production, as temperatures in the plant are stabilised at 31-33 degrees Celsius, even in an unpredictable climate. Normally, shrimp stop eating in cold weather.

According to Mr Sujit, the Trat site will provide the prototype for CPF's future expansion into other countries including China.