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Cargill Looks to Thailand for Continues International Growth
After opening its first office in 1968, international food giant Cargill is forging ahead with continued investment in Thailand as global demand accelerates with economic and population growth. As Cargill’s largest export base for poultry in Southeast Asia, Thailand serves as a hub for the company’s exports, high biosecurity standards and technology development operations.
Cargill employs a mammoth 139,000 people worldwide and reported $119.5 billion in sales for 2011, making it the largest privately held company in the U.S. today. Cargill’s Thailand operations are also quite large and span nine locations across the country in order to serve international export customers by handling the sourcing, distribution and marketing of a wide range of products including agricultural commodities, animal feed, food and beverage products and ingredients.
Most recently, with the help of the Thailand Board of Investment (BOI), Cargill Thailand has expanded its chicken production plants to satisfy developing countries where urbanization and rising incomes have created a consumer class that demands more expensive meat products. In the coming years, the company will spend over $110 million to increase annual capacity for cooked poultry by approximately 24,000 metric tons. The Korat plant will expand the existing hatchery and add breeder farms and a feed mill with an annual capacity of 360,000 tons, creating approximately 2,000 jobs for the region.
“Thailand was an early global leader in developing the poultry industry in Asia,” said Prasit Maekwatana, CEO of Cargill Meats Thailand. “Cargill’s decision to expand its poultry operations in Thailand is due to strong government support for the industry in the form of tax incentives to promote investment in world class food safety plants.”
Thailand: Kitchen of the World
Cargill’s decision to invest in Thailand is highly strategic, as Thai food exports are expected to surpass $33 billion within the next two years. Thailand’s agricultural roots, natural resources that allow firms to source 80 percent of raw materials locally and developed infrastructure have made the country one of the world’s largest food exporters. Other key players in the food industry with locations in Thailand include Nestle, Unilever, Kellogg’s, Pepsi and Dole.
Thailand is also one of the world's top exporters of processed food, and primed to act as a hub for Cargill and other firms producing ready-to-eat products, which reached an export market value of $9.3 billion in 2011. In fact, packaged food is expected to have a global market value of $2.14 trillion by 2015.
Empahsis on Safety and R&D is Driving Investment
In addition to chicken production, Cargill Thailand also specializes in texturizing solutions, which act as thickening agents to improve the stability, texture and shelf life of food and beverages. With access to high-tech R&D centers like the Institute of Food Research and Product Development (IFRPD) at Kasetsart University, Cargill benefits from Thailand’s long-standing expertise in the industry.
“Cargill chose Thailand because it continues to maintain a competitive advantage through government support, the BOI in particular, for new leading edge facilities, such as our Korat Phase 2 expansion,” said Maekwatana, “The country’s talented pool of graduates with coveted agricultural qualifications and a diligent, talented labor force ensures highly productive operations while still meeting Cargill’s stringent food safety quality standards.”
Thailand’s food safety inspection agencies include the Department of Medical Science, the Thai Industrial Standards Institute, the Department of Agriculture, the Department of Fisheries and the Department of Livestock, in which Cargill works with to ensure their products high safety standards.
Working with the BOI to Continue Growth
After the unexpected floods last year, Cargill worked closely with the BOI and Thai government to overcome obstacles and move forward with production that will be in high demand over the next decade.
“The floods in Thailand were very unfortunate, and like the government, we did our best to support our employees and our surrounding communities during the floods,” said Maekwatana, “Future plans to address natural disasters will require all government agencies and provinces to work together and we believe that the government is working very hard to achieve that kind of future response. The BOI has been a tremendous supporter in our long 20-year-journey of continuous growth in Thailand, and we are looking forward to future collaboration as the industry and markets expand.”