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Fowl business in latest deal struck by CP Group

Fowl business in latest deal struck by CP Group

CP International will make chicken history in Cambodia on July 29-30. The company

will give 3,000 baby chicks to a farmer in Takhmau, 15 kms south of Phnom Penh. Forty

days later the farmer will make roughly $300 by selling the chickens back to the

company, which will then sell them on the local market.

In an agreement between Ministry of Commerce Secretary of State Lu Laysreng and Thailand's

largest conglomerate, CP Group, Cambodian farmers will be given the opportunity to

earn up to $2,000 a year. Furthermore, raising chickens will increase their supply

on the local market, making them affordable, Laysreng hopes, for the peckish consumer.

In preparation for next week, the Takhmau farmer has invested roughly $1,250 to house

and feed his feathered friends. After 40 days - the number of days it takes for the

chick to grow into a 1.8 kg chicken - CP Cambodia will purchase the chickens from

the farmer at an agreed-upon price. This roost of chickens will bring in $240-$330,

or 25 cents for a pair of birds.

CP Cambodia will then transport the chickens to a market in the Phnom Penh area.

If all goes well, the company will give the farmer 3000 chicks six times a year-

it takes two weeks to clean up after the chickens have left the coop - with the annual

income potential of up to $2,000.

By December this year, CP Cambodia will bring 30,000-50,000 chickens per week to

Phnom Penh-area markets, according to Anan Athigapanich, Assistant Vice President

of CP Vietnam and President of CP Cambodia.

He estimates that currently 90,000 chickens are sold per week in the Phnom Penh area.

In 1997, as the arrangement becomes available to farmers in Kompong Cham, Kompong

Som, and Prei Veng Province, 50,000-80,000 chickens per week will strut to the market.

In five years, this figure will increase to 100,000 per week.

CP International is relying on its extensive experience with similar arrangements

in Thailand, China, and Vietnam to expand into Cambodia's fledgling fowl market.

The company is currently marketing the venture by visiting village heads and showing

videos to farmers.

"In Vietnam, farmers were initially reluctant to grow chickens this way,"

says Athigapanich, "but after they saw how easy it is to make money, they caught

on very quickly."

To ensure that each bird reaches its plump 1.8 kg target, CP Cambodia will monitor

the health of the chickens, providing free medicine when necessary, and ensure that

they are receiving the correct amount of feed daily.

Increasing the supply of chickens will eventually halve their price, according to

Laysreng. Currently, Cambodian-grown chickens are too expensive for the average Cambodian

consumer as well as for the international market. Athigapanich attributes high prices

to inefficient production technology and diseases that keep the supply low.

This will change in up to five years, however, when Cambodia begins to produce quality

feed at economies of scale. CP Cambodia will finish constructing the country's first

feed mill in late 1996, and in three years the mill will operate at its full capacity

of 84,000 tons per year. When the price and quality of Cambodian chickens meets the

world standard, in 5 years estimates Athigapanich, CP Cambodia will begin exporting


By this time, CP International will have invested $15 million in Cambodia, he said.

In addition to the feed mill, the company plans to build hatching, broiler, and pig


The high cost of chicken motivated Laysreng to become the moving force behind attracting

CP International to Cambodia.

"I am a very simple person," he explained. "I prefer to eat in food

stalls. But it is shameful to see people wait until after I have finished to eat

the remains of my meal. Cambodian people cannot afford chicken."

Worrying that farmers will not be able to afford the $1250 initial investment, Laysreng

has suggested that an international or regional financial institution set up a Farmers

Association to direct capital to them.

"It is very difficult for farmers to get loans now," he says.

"The Farmers Association needs $25 million. The farmers can pay back the money,

with interest, in ten years. Everybody will benefit from more chicken: farmers, consumers,

and when exports begin, even the government budget."

With Phnom Penh to be awash in chicken, the consumer may wonder: where chicken feet

tread, can Colonel Sanders' be far behind?


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