Dhanin Chearavanont, Thailand’s richest man, has created a global business empire that is now being buffeted by headwinds ranging from China’s economic slowdown to a weak Russian currency and even political unrest in Turkey.
The billionaire’s closely held Charoen Pokphand Group emerged from a bird-flu crisis that devastated the poultry business a decade ago to post annual revenue of US$40 billion in 2013, according to the Wall Street Journal.
After years of aggressive expansion, CP now employs 300,000 people at roughly 200 subsidiaries spread across 17 countries in industries as diverse as auto-parts manufacturing and banking.
Many are privately owned, but the group has two listed units in Thailand and others in Hong Kong, Taiwan and Indonesia.
On Wednesday CP’s largest publicly listed subsidiary is expected to post lower third-quarter profit, compared with a year earlier, the newspaper said, citing analysts’ estimates.
Dhanin, 76, has seen domestic profit eroded by Thailand’s economic malaise that followed a military coup last year.
Analysts say weak consumer spending has hurt CP’s nationwide chain of 7-Eleven stores, while disease has decimated its shrimp stocks.
An oversupply of chicken and pork—still the company’s mainstays—has dented prices by more than 10 percent this year.
Overseas, CP’s focus on emerging markets has yet to reap dividends.
Russia’s weak rouble has cut revenue CP repatriates from farming and feed businesses there.
In Turkey, where CP operates a large chicken-and-egg producer, political unrest has contributed to lower consumer demand.
Brazil, one of Thailand’s main rivals in chicken and pork production, is benefiting from a weak currency that has made its exports more competitive in Europe and Southeast Asia, roiling CP’s core export business.
Meanwhile, China’s economic slowdown is expected to affect the company’s investments in that country, the Journal said.
– Contact us at [email protected]