Charoen Pokphand Group

[Bruce551]

Who runs Thailand?

The Charoen Pokphand Group is the largest business conglomerate in Thailand. Its chief subsidiary is Charoen Pokphand Foods, which did 116.5 billion baht in revenue in 2005, earning a profit of 6.747 billion baht.[1] Aside from agribusiness, the family-owned holding company's interests range from retailing, as the franchisee of Thailand's ubiquitous 7-Eleven stores to telecommunications, as the owner of True Corporation, a mobile telephone, Internet service provider and cable television company.

There has been the claim from an NGO, FTAwatch, that the Charoen Pokphand Group exercises its political power over the Thai government to change the context in the JTEPA. The text in the contract includes tax reduction for chicken, shrimp and frozen seafood that the Charoen Pokphand Group hold the substantive market share, instead of rice product that Thai farmers have competitive advantage.[1]

The Charoen Pokphand Group is the major funding of the Thai-rak-Thai party and have the close relationship with the former Prime Minister Thaksin.[2][3] The founder of the Charoen Pokphand Group is under the investigation of the allegation of corruption in the rubber tree project.

General Prem Tinsulanonda was Chief Advisor to the CP Group. In early 2007, he resigned from his position in order to distance himself from a military junta-led corruption investigation. The investigation concerned alleged bid rigging in a para rubber saplings supply contract granted during the Thaksin government while Prem had held his position at the Group.[4]

As noted by the Manager newspaper, UBC cable TV (later named True Vision) cannot be renamed under the concession law; by so doing would break the concession law and the cable TV contract shall terminated. However, the law enforcement in Thailand is weak and the group has high level of political influence, then no authority in Thailand would dare to prosecute the UBC cable TV's concession right holder.

There has been an uproar from TRUE internet users that the TRUE internet provider press the internet bandwidth to limit the use of customers. Number of complains regarding bandwidth and connectivity has been received regularly cause by the inferior infrastructures of the TRUE internet providers.

Retail store 7-Eleven did not comply to the new law regard cigarette advertising. The store continually had displayed cigarette and urge for the new interpretation of the new law. As a consequences, public accuse the Charoen Pokphand Group of lacking Corporate Social Responsibility (CSR), and the widely public call for banning of 7-Eleven retail stores.

In 2007, the organized farmers accuse the Charoen Pokphand Group of dumping pork in market to put Thai farmers out of business, resulting in very low pork price.[4]

A new species of fish called "Pla-Tub-Tim" is sold by the Charoen Pokphand Group. They are sold in the young period but they have been steriled by genetically engineering. However, the law in Thailand does not prohibit the use GM food.

29 former employees of True corporation sent the petition to the Office of the National Rights Commission of Thailand after has been fired in an attempt to establish a Labour Union [5]. The company claimed that the 29 former employees are incompetent. However the 29 former-employees accused the company of unfair dismissal and claim that the company is subjected to high court.

Not all bad:

CPF adds co-generation plants

Looks to reduce high energy costs

WALAILAK KEERATIPIPATPONG

Kritsada Tosathorn, engineering manager of Bangkok Produce Co, helped develop the co-generation power plant in Saraburi.

SARABURI : Charoen Pokphand Foods Plc (CPF), the country's largest food exporter, will add another two or three co-generation power plants at its food production sites nationwide to cope with increasing energy expenses.

Its first co-generation power plant installed at Bangkok Produce Merchandising Co, a CPF subsidiary, helped save 47 million baht, or nearly half of the annual electricity bill from the chicken-making unit in Saraburi.

Supported by the Alternative Energy Development and Efficiency Department, the power plant uses low-priced gas supplied from PTT to generate electricity. The process produces enough steam to broil the 200,000 chickens the plant slaughters each day.

CPF vice-president Anurat Suthamnirun said a feasibility study has been conducted to decide which production plants need modifications and whether to use natural gas or biomass to fuel co-generation power plants.

CPF and its subsidiaries have more than 20 large plants to process animal feed, chicken and shrimp products in different provinces.

''The study uses the Saraburi plant as a model and looks into whether a gas pipeline from PTT is available and the viability of the investment,'' Mr Anurat said. ''For example, we need to use biomass fuel to supply co-gen at our food complex in Nakhon Ratchasima since the province is not on the path of a PTT pipeline.''

The investment for a co-generation plant is no more than 200 million baht. Taking the high oil price into account, he said industries can choose a co-generation or even tri-generation power plant, which includes a chilling facility.

Mr Anurat added that if the investment is worthwhile, power generation of all plants will be modified, not only two or three units that were projected for this year.

Bangkok Produce buys about 35,000 cubic feet of gas each day at about 220-230 baht for one million BTUs (British Thermal Units) of liquefied natural gas from the Gulf of Thailand, a lower rate if compared to the 330-350 baht charged on the market.

Before completion of its 190-million baht co-generation plant in 2004, the company paid over 100 million baht a year for electricity. That worked out to 10 megawatts per day, an amount that can power one district, said engineering manager Kritsada Tosathorn.

The investment brings down electricity use at the plant to 4.7 megawatts a day and saves more than two million litres of bunker oil a year that was used to heat broiler units.

Noppadol Sirichongdee, senior vice-president of Bangkok Produce Merchandising Plc, said foreign buyers require the use of alternative fuels and environmentally friendly production methods.

He said he had to take a group of buyers from Marks and Spencer to ensure them the company used wood from reforestation to grill yakitori after the British retailer suspected the wood was from destroyed mangrove. London's Tesco also demanded only chickens that were raised and slaughtered according to Animal Welfare standards.

Mr Noppadol said the company was planning to make biodiesel from used cooking oil. About 100 tonnes would be used to prepare some of the 3,000 tonnes of chicken cooked at the Saraburi plant each month. In addition, he said CPF was studying the use of bio-degradable packaging made from corn starch and tapioca starch for meat packaging.

Last year CP Group won the Thailand Energy Award from the Alternative Energy Development Efficiency Department after it saved 1.5 billion baht under an energy-savings programme that included 200 companies under the CP umbrella.

** CPF received financial incentives from the Thai Gov. for implementing the co-generation project, which is just fine.

However, where are the financial incentives for little guy in Thailand?

:?:

http://en.wikipedia.org/wiki/Charoen_Pokphand

[babyoiy]

A wife of current PM is one of the board of the director of many CP sub's too and she has been working for CP for longer than 20 years. I have never think about if CPG has any power more than any other company in Thailand, just seeing they are doing food products biz for both human and animal. And we all have to eat..... so they will always make a huge profit and is a number 1 in Thailand always (as a group).

About Rubber tree... it has not been judge yet.. I'm watching it!

And if they are close to ex-PM, why they do the same biz, telecomunication? Its just a new things to me to hear about their relationship. I'm surprised! But anyway, I possibly missed something as I rarely read biz news.

Can you descibe more about UBC changed name to be TRUE VISION? Seem the article saying that it's not what everyone can do but I dont know about this... so far I remember there are some changes in shareholder so True group is now a part of CPG.

[Loburt]

While I'm not going to hold up CP as any sort of model company, not everything in the first article posted is accurate or fair.

As far as I know, the CP Group was not the major funder of the Thai Rak Thai party. TRT was originally funded by - surprise - the Shinawatra family and other major party members, such as the Chidchob clan.

Afterward it took power, according to former TRT member Snoh Thienthong, the party was funded chiefly by overcharging 10% on government projects and budget lines at ministries. Thaksin never did like to use his own money for anything.

CP probably did make contributions to TRT. The company has a habit of contributing to most parties in order to have "friends" no matter who comes to power. But chief funder of TRT? I really doubt that.

CP is usually alloted a Cabinet member. That used to be Pitak Intrawittiyanunt, who served without scandal. He was eventually replaced by Watana Muangsook, a son in law of the CP chairman, who turned out to be an embarrassment and was the one involved in the rubber sapling scandal.

I know for a fact that CP executives feel they got used and unfairly blamed in the rubber sapling fiasco. I believe if you read the reports, they offered to replace all spoiled rubber saplings for free.

And I know for a fact that some CP executives detest Thaksin. But they don't regard it as good for business to make political enemies.

If the CP group lobbied for a better tax deal on what they produce in the Japan-Thailand FTA, that's exactly what you would expect a corporation to do.

However the way the article is written, it makes it appear that they did this to the detriment of Thai rice farmers. There is no evidence of that, nor does it make sense. It's not a zero sum game. CP doesn't lose out if rice farmers get a good deal too, and so has no reason to try and screw them.

If rice farmers got screwed, blame the Thaksin government which negotiated the deal.

Just as it negotiated the trade deal with China that has seen a flood of Chinese fruits and vegetables coming into Thailand at prices cheaper than Thai farmers can compete with.

CP did screw rice farmers by promoting inland shrimp farming in environmentally unfriendly ways. The chemical run off from many of those farms destroyed a lot of neighboring rice crops.

Their record could be much better and they are slow to change, but they do appear to be slowly changing for the better.

As far as internet bandwith problems, I also doubt CP is deliberately squeezing customers. I've had the same bandwith problems with CSLOXINFO (formerly part of the Shinawatra empire) and TOT. From friends who are very knowledgeable about the Thai telecoms sector, they say the problem lies with CAT's mismanagement.

CP's enormous wealth, political connections in China, and the fact that it employs or contracts at least tens of thousands of farmers, does give it some political clout.

But the owner of Chang Beer, Khun Charoen, is richer than the head of CP and is even more adept at spreading his money around among Thai politicians. And he's even less transparent.

As I said, I wouldn't call them a model company, but they also aren't quite the big evil that article makes them out to be.