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Cargill invests $50m into expansion of Thai poultry facility

Local demand fed by a recovery in tourism and the wider economy has inspired Cargill to spend $50m upgrading its poultry processing capabilities in Thailand in order to work with local smallholder farms.

Increasing broiler chicken demand has led Cargill to invest in an expansion of its poultry-processing facilities in Thailand.

The Minnesota-based global agribusiness company announced it will devote $50 million to upgrading poultry processing operations at its facility in the Nakhon Ratchasima province.

Construction of a new building annexed to an existing facility started last month and is expected to open during Q1 2018, according to the statement from the firm.

Cargill said the expansion will result in an additional 1,400 jobs in Thailand – where the company already employs 13,500 people in 14 locations – and help it engage local independent smallholder broiler farms to meet increasing demand.

The demand pickup is being driven by tourism and an anticipated recovery in the Thai economy, which is expected to expand by 3.3 percent next year, according to the International Monetary Fund’s World Economic Outlook published in October.

Chicken meat consumption in Thailand is expected to increase between 4 and 5 percent next year following a 3 percent jump this year, according to the US Department of Agriculture Foreign Agricultural Service’s (FAS) recent Poultry and Products annual report.

While fresh chicken purchased from markets continues to constitute the bulk of local demand, accounting for 60 to 70 percent of total domestic chicken sales, chicken meat consumption through ready-to-eat and quick service restaurant sectors is expected to grow by 4 to 5 percent annually for the next few years, agricultural specialist Sakchai Preechajarn stated in the report.

After the government imposed a ban on on US chicken genetics imports in December 2014, such imports from France, the Netherlands and Denmark helped Thai farmers maintain production, according to the FAS.