History
Charoen Pokphand traces its beginnings back to 1921, when immigrant brothers Chia Ek Chor (謝易初) and Chia Jin Hyang (謝進賢), hailing from Swatow, China, started a seed store named Chia Tai Chung on Song Sawat Road in Bangkok's Chinatown during the reign of King Rama VI. They imported seeds and vegetables from China and exported pigs and eggs to Hong Kong, Taipei, Kuala Lumpur, and Singapore. The two brothers, who were virtually penniless, managed to scrape together enough capital to start their tiny seed shop. For the first few years of the businesses existence, the two brothers experimented to find their own market niche.[13] By the 1950s, the shop began to specialize in exporting animal feed, particularly for chickens but the business struggled until the 1970s when the Bangkok Bank asked it to assume control of a bankrupt chicken farm. The shop later specialized in purchasing grown chickens for distribution to grocers and restaurants with vertically integrated strategy of feed-milling operations with chicken breeding.[13] In 1969, the company had an annual turnover of US$1–2 million.[14]
When the Thai economy was liberalized in the 1970s, the CP Group entered various business negotiations with several major Thai banks, the Thai government, and foreign firms. The CP Group would supply Thai farmers with chicks and feed and teach breeders how to raise chickens while the farmers would sell the grown chickens back to the CP Group which processed the chickens and sold them to high volume grocery stores, restaurants, and fast food franchises across Thailand. The CP Group expanded internationally exporting their contract farming formula across Southeast Asia and around the world to Mexico, Taiwan, Portugal, mainland China, Indonesia, Turkey, and the United States.[13] By the 1980s, with Thailand becoming a full blown capitalist economy, the CP Group entered the aquaculture business, turning their formula to raising and marketing shrimp.[13]
The company increased its scope from selling vegetable seeds under the trademark of Rua Bin ("Aeroplane") to production of animal feed under Ek Chor's two elder sons, Jaran Chiaravanont and Montri Jiaravanont. The company further integrated its business to include livestock farming, marketing, and distribution, under Dhanin Chearavanont. By the 1970s, the company had a virtual monopoly on the supply of chicken and eggs in Thailand.[15] The company was known for vertical integration, expanding into several business lines, adding breeding farms, slaughterhouses, processed foods production, and, later, its own chain of restaurants.[13] CP had also gone international, launching feed mill operations in Indonesia in 1972, exporting chickens to Japan in 1973, then moving into Singapore in 1976.[16]
In the 1980s, as mainland China opened up to foreign direct investment, the firm became the preferred partner for international brands such as Honda, Walmart, and Tesco. CP's family ties with the mainland enabled it to become the first foreign company to establish itself in the newly created Shenzhen Special Economic Zone, where the company set up its Chia Tai Co. subsidiary. In 1987, the company acquired the rights to the 7-Eleven convenience store chain and the KFC fast food restaurant chain. The company would also expand into Shanghai by manufacturing motorcycles under license from Honda and brewing beer with a license from Heineken.[13] In 1989, CP entered the petrochemical business with Solvay of Belgium to launch Vinythai Co., a manufacturer of polyvinylchloride.[17] In 1990, the CP Group acquired a stake in TelecomAsia, a joint venture with US telecommunications firm NYNEX to build and operate two million telephone lines in Bangkok worth some $3 billion.[16]
By the early-1990s, CP presided over some 200 subsidiaries in China.[14] CP's investment in poultry production on the mainland was credited with changing the country's dietary habits, as per capita consumption more than doubled by the end of the decade.[16] Starting in 1993, many subsidiaries went public. TA, Charoen Pokphand Feedmill, Siam Makro, and Vinythai were listed publicly on the Stock Exchange of Thailand (SET); its Hong Kong subsidiary, CP Pokphand, on the Hong Kong Stock Exchange; a Shanghai-based animal feed and poultry group on the Shanghai exchange; a real estate development arm, Hong Kong Fortune, on the Hong Kong Exchange; and Ek Chor China Motorcycle on the New York Stock Exchange. Having been listed on the Hong Kong Stock Exchange since 1981, CP Lotus, a retail arm of CP Group in China, opened its first store in Shanghai in 1997.[18]
After the Asian financial crisis in 1997, CP consolidated into three business lines under its main brands: foods (CP Foods), retail (7-Eleven), and telecommunications (True). By the early-2000s, the CP Group claimed $9 billion in business assets.[13] The company sold its stakes in the Tesco Lotus venture with Tesco in 2003 due to its crisis policy in order to focus on 7-Eleven, in which, unlike Tesco, CP owns a majority, as its flagship retail arm.
In 2013, Charoen Pokphand has got clearance to buy HSBC's stake of Chinese Ping An Insurance.[19] On 10 May 2013, in spite of a lack of loan from the China Development Bank,[20][21] HSBC said "it was selling the 15.6 percent stake at HK$59 a share" to Charoen Pokphand Group.[21][22]
In 2014, CP announced a tie-up with the Japanese general trading company Itochu under which CP acquired 4.9 percent of Itochu's listed stock for about US$1 billion, and Itochu in turn acquired a 25 percent stake in a Hong Kong-listed CP group company, CP Pokphand Co., for about $854 million. This transaction made CP the third-largest shareholder in Itochu, and was marketed as an alliance between the two conglomerates with a focus on developing international food trading opportunities.[23] In 2015, CP and Itochu announced that they would jointly take a $10.4 billion stake in China's CITIC Limited, forming a trilateral alliance with Itochu and CP each holding 10 percent of CITIC's stock, one of the largest foreign investments in a Chinese state-owned company.[24]
On 9 March 2020, CP Group submitted the winning bid to purchase Thai retailer, Tesco Lotus, for about $10.6 billion.[25] The purchase needed the approval of the Office of Trade Competition Commission (OTCC) as it could constitute a monopoly, given that CP already owns 7-Eleven convenience stores and the Makro cash-and-carry business.[26] The sale became approved in Malaysia in November 2020 and in Thailand in December 2020, with rebranding of the acquired stores beginning in February 2021, replacing the Tesco corporate branding with that of Lotus's.
In February 2021, CP Group was recognized as one of the World's Most Ethical Companies 2021 award from Ethisphere Institute, a global institution for evaluating ethical business standards.[27]
In September 2021, CP Group raised $150 million from existing investors, raising the valuation of its Ascend Money subsidiary to $1.5 billion.[28]
In November 2021, CP Group and Telenor Group announced an agreement to form an equal partnership to support the merger of True Corporation and Total Access Communication (dtac). The aim was to create a new tech company that would contribute to Thailand’s strategy of becoming a regional technology hub, focusing on digital infrastructure and innovation.[29]
In 2023, Siam Makro Public Company Limited officially changed its name to CP Extra Public Company Limited (CPAXT). The rebranding was intended to clarify its business scope, which includes both wholesale and retail operations, and to support the company’s long-term growth under CP Group.[30]
