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C.P. Pokphand's feed business unit delivers on profit warranty

C.P. Pokphand's Feed Business Unit Delivers on Profit Warranty

Gross Margin Improved on Successful Product Mix

HONG KONG, 6 December 2010 - C.P. Pokphand Co. Ltd (“CPP” or the “Company”; HKEX: 43), China's leading provider of animal nutrition solutions in the food industry, today announced that newly acquired, 100%-owned CPI Group (CP China Investment Limited and its subsidiaries, jointly-controlled entities and associate companies) has met the profit warranty for 2009 in the acquisition agreement and continued to show earnings improvement for the six months ended 30 June 2010.

CPP entered into an acquisition agreement with its parent Charoen Pokphand Group Company Limited on 11 December 2009, acquiring the entire stake of CPI Group and has become one of the leading feed producers in China.  The parent company had made a profit warranty of US$82 million in the agreement.  The acquisition was completed on 28 February 2010.

CPP said in an announcement today that CPI Group recorded an unaudited net profit attributable to its owners of approximately US$84.5 million for the year ended 31 December 2009.

The encouraging financial results of CPI Group are a strong testimony to the success of its strategy of optimizing product mix.  By scaling down segments with lower profit margins such as poultry feed and increasing focus on higher margin products such as swine and aqua feed products, the overall gross profit margin of CPI Group increased to 13.4% in FY2009 and 13.7% in 1H2010.

With more than 73 feed mills across 26 provinces and municipalities in China, CPP has the most far-reaching geographical coverage in the domestic feed industry.  The CPP’s feed brand, “Chia Tai”, enjoys a high recognition in China’s feed market with a track record of 30 years’ operational excellence.  Moreover, CPP has an extensive and exclusive distribution network and a strong sales service team with specialized breeding knowledge that provides extensive market coverage and after-sales services to customers across China.

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About C.P. Pokphand

C.P. Pokphand is China's leading provider of animal nutrition solutions in the food industry with the largest distribution and service network. C.P. Pokphand generates consistent growth by offering technology-based animal nutrition products and outstanding customer and technological services to its customers.