TRIS Rating Co., Ltd. has upgraded the ratings of Charoen Pokphand Foods PLC (CPF) and its existing senior debentures to “A+” from “A”. At the same time, TRIS Rating has also assigned the ratings of “A+” to CPF’s two proposed up to Bt5,000 million senior debentures. The rating outlook is “stable”. The ratings reflect CPF’s leading position in Thailand’s agribusiness industry, its diverse mix of products and markets, its full vertical integration, and management’s ability to respond to the ever-changing business environment. These strengths are partially offset by the inherent volatility of commodity prices, exposure to disease outbreaks, and stricter regulations imposed by importing countries.
The “stable” outlook reflects the expectation that CPF will be able to maintain its leading position in the changing global food market. The company’s competitive advantage is expected to be further strengthened
after the completion of its new processed chicken plant and achievement of full vertical integration for its shrimp business. The decision to brand most domestic fresh products with the “CP” name is strategically important and should partially insulate the company from the cyclicality of prices for its basic products.
TRIS Rating reported that CPF is the largest agribusiness company and is regarded as the flagship agribusiness of the CP Group in Thailand. As of April 2006, Charoen Pokphand Group Co., Ltd. (CPG) and related companies held 39% of the company’s shares. CPF’s business is divided into two categories, livestock
and aquaculture, which accounted for 73% and 27%, respectively, of total sales in 2005. The company’s fully-integrated chicken and shrimp operations help its products meet international standards, and its products
are qualified for export to major importing countries including the United States (US), Europe and Japan.
TRIS Rating said that CPF’s 2005 performance improved significantly from its poor performance
during 2003-2004, because of the strong rebound in prices for most products and easing of the panic surrounding the avian influenza outbreak in most countries. CPF’s sales increased by 24% from Bt91,790 million in 2004 to Bt113,374 million in 2005 and its net profit jumped by 446% from Bt1,237 million to Bt6,747 million. The occurrences of bird flu are expected to remain, but at a lesser degree, while the chicken industry has adjusted by exporting only cooked products. CPF’s exports of processed chicken were up by 29% in 2005 while domestic chicken sales grew by 40% as a result of the company’s successful strategy to focus more on the “CP” branding and value-added products. CPF’s aquaculture sales were up by 34% compared with 2004. Shrimp exports increased by 152% in 2005 as CPF benefited handsomely from the low anti-dumping rate for Thai shrimp exported to the US and the resumption of generalized system of preferences (GSP) privileges for the European Union market. -- End
Charoen Pokphand Foods PLC (CPF)
Company Rating: Upgraded to “A+” from “A”
Issue Ratings:
CPF07NA: Bt2,500 million senior debentures due 2007 Upgraded to “A+” from “A”
CPF086A: Bt2,000 million senior debentures due 2008 Upgraded to “A+” from “A”
CPF09NA: Bt3,500 million senior debentures due 2009 Upgraded to “A+” from “A”
CPF106A: Bt2,000 million senior debentures due 2010 Upgraded to “A+” from “A”
Up to Bt5,000 million senior debentures:
- CPF#1/2006: senior debentures due 2009 A+
- CPF#2/2006: senior debentures due 2011 A+
Rating Outlook: Stable
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Copyright 2006, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.
The “stable” outlook reflects the expectation that CPF will be able to maintain its leading position in the changing global food market. The company’s competitive advantage is expected to be further strengthened
after the completion of its new processed chicken plant and achievement of full vertical integration for its shrimp business. The decision to brand most domestic fresh products with the “CP” name is strategically important and should partially insulate the company from the cyclicality of prices for its basic products.
TRIS Rating reported that CPF is the largest agribusiness company and is regarded as the flagship agribusiness of the CP Group in Thailand. As of April 2006, Charoen Pokphand Group Co., Ltd. (CPG) and related companies held 39% of the company’s shares. CPF’s business is divided into two categories, livestock
and aquaculture, which accounted for 73% and 27%, respectively, of total sales in 2005. The company’s fully-integrated chicken and shrimp operations help its products meet international standards, and its products
are qualified for export to major importing countries including the United States (US), Europe and Japan.
TRIS Rating said that CPF’s 2005 performance improved significantly from its poor performance
during 2003-2004, because of the strong rebound in prices for most products and easing of the panic surrounding the avian influenza outbreak in most countries. CPF’s sales increased by 24% from Bt91,790 million in 2004 to Bt113,374 million in 2005 and its net profit jumped by 446% from Bt1,237 million to Bt6,747 million. The occurrences of bird flu are expected to remain, but at a lesser degree, while the chicken industry has adjusted by exporting only cooked products. CPF’s exports of processed chicken were up by 29% in 2005 while domestic chicken sales grew by 40% as a result of the company’s successful strategy to focus more on the “CP” branding and value-added products. CPF’s aquaculture sales were up by 34% compared with 2004. Shrimp exports increased by 152% in 2005 as CPF benefited handsomely from the low anti-dumping rate for Thai shrimp exported to the US and the resumption of generalized system of preferences (GSP) privileges for the European Union market. -- End
Charoen Pokphand Foods PLC (CPF)
Company Rating: Upgraded to “A+” from “A”
Issue Ratings:
CPF07NA: Bt2,500 million senior debentures due 2007 Upgraded to “A+” from “A”
CPF086A: Bt2,000 million senior debentures due 2008 Upgraded to “A+” from “A”
CPF09NA: Bt3,500 million senior debentures due 2009 Upgraded to “A+” from “A”
CPF106A: Bt2,000 million senior debentures due 2010 Upgraded to “A+” from “A”
Up to Bt5,000 million senior debentures:
- CPF#1/2006: senior debentures due 2009 A+
- CPF#2/2006: senior debentures due 2011 A+
Rating Outlook: Stable
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Copyright 2006, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.