CP Group tempers investment due to global risk factors

Charoen Pokphand (CP) Group, a renowned Thai conglomerate, has planned to temper its investment activities in the current year. The group’s CEO, Suphachai Chearavanont, has indicated that this strategic shift is driven by the desire to reap the benefits from previous years’ investments.

Suphachai voiced concerns over several global risk factors anticipated to lead the agriculture sector into a stagnation cycle, a phenomenon typically observed every five to seven years in commodity businesses. Nevertheless, he assures that the group will maintain its expenditure on vital areas such as digital transformation, innovations, and e-commerce ecosystems.

Since 2023, CP cut down on a part of its investment, while simultaneously sustaining outlays in certain sectors, Suphachai remarked.

Suphachai further highlighted that 2024 will be a year of rigorous control given the global uncertainties that encompass capital flow in the high-interest US market, continuous wars in Ukraine and Gaza, and China’s real estate crisis. However, he revealed that several analysts think that China’s economy has already hit rock bottom.

He further elaborated that every business within the CP Group has shown notable improvement compared to the pandemic era, particularly in revenue stream and profitability. The sole exception to this growth trend is the agricultural sector, a pattern he attributes to their business cycle.

Suphachai expressed confidence in Thailand’s potential, citing its solid economic fundamentals, considerable population size and geographical advantages. He further predicted that the impending US presidential election will likely diminish the nation’s global activities as the focus shifts towards domestic economic issues.

Nation’s GDP

If the conflicts in Ukraine and Gaza are resolved, it should act as a catalyst for global economic recovery, he commented.

He also pointed out that Thailand’s outlook has improved due to the revival of tourism, which has significantly bolstered the nation’s GDP. As the chairman of the Digital Council of Thailand, Suphachai believes that the country possesses a robust foundation to attract foreign investment, particularly in hyper-scale cloud data centres.

Suphachai also noted that Thailand is a prime location for travel, living, and long-stay work, owing to the significant improvements in the ease of doing business under the government’s policies.

Despite the negative sentiment emanating from certain SET-listed companies, Suphachai believes that the Stock Exchange of Thailand is generally healthy, including its trade volume compared with ASEAN peers. He also highlighted that the bottom line of SET-listed companies indicates improved performance based on their capabilities and digital transformation in dealing with pandemic-related hardships.

Suphachai stressed the importance of training up to 10% of the population as skilled talent, primarily in fields such as artificial intelligence, automotive robotics, health, space, nano- and biotech, digital transformation and cybersecurity.

Suphachai emphasised that CP Group uses solar and biomass energy to save on costs and would consider developing a smart grid if government policy supports it. He also added that Thailand needs to offer alternative or green energy sources to support global tech players that aim to achieve carbon emission targets.

If Thailand has a clear goal and continues to improve, it can compete with others, reported Bangkok Post.