[BANGKOK] Thailand's largest meat and animal feed producer, Charoen Pokphand Foods Pcl, said on Friday it will acquire an integrated poultry business in Russia from Agro-Invest Brinky BV for US$680 million.
The deal will allow CP Foods to enter the poulty business in Russia, one of the fastest growing markets for animal protein with an average growth rate of 7.4 percent a year in the past 10 years, it said in a statement. The company already runs livestock feed and swine farming businesses in Russia.
CP Foods, the flagship unit of Charoen Pokphand Group (CP) controlled by Thailand's richest man Dhanin Chearavanont, has become more aggressive in its overseas expansion as it tries to offset softer domestic demand. Two-thirds of its revenue comes from overseas markets.
Its wholly-owned unit CPF Netherlands has agreed to buy the entire stake in a new Russian company to be set up by Netherlands-based investment firm Agro-Invest by Aug 31, the statement said.
The initial acquisition of an 80 percent stake is expected to be completed by the end of 2015 with the remaining 20 per cent to be purchased by August 2018, it said.
CP Foods said last August it had received strong orders for chicken from Russia, which has banned or limited imports of agricultural products from the European Union after facing sanctions.
CP Foods has been looking for opportunities to buy assets in high-growth emerging markets to achive its annual revenue growth of 10-15 per cent over the next five years.