Charoen Pokphand (CP) $85B Conglomerate: China to Thailand to Kitchen of the World - E412

CP Group, a prominent Thai conglomerate, traces its beginnings to the founder Chia Ek Chor migrating from Chaozhou, China to Thailand in 1919. Despite early skepticism, he started a humble seed business which grew significantly by adapting to local agricultural challenges and changing global climate patterns. This foundation allowed his son and successor, Dhanin Chearavanont, to expand CP Group into a vast empire - touching multiple industries and generating an annual revenue of ~$85 billion USD. The episode highlights the strategic decisions to emphasize vertical integration in its food production process and discusses how more than half of the world's population has likely consumed its products.

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This is the story of Charoen Pokhaban, better known as CP, a Thailand conglomerate whose second-generation leader, Dhanin Chearavanont, turned a seed business into the world's kitchen.

(01:21) The Humble Beginnings of CP Group's Founder

It's around 1919, and Chia Ek Chor, a man hailing from Chaozhou, lands in a new world with nothing but his ethics in tow.

At first glance, there's nothing particularly remarkable about him.

Why would there be? He's just one among hundreds of immigrants spilling in from China, each desperate to carve out a living. Back home, like so many others, his family is counting on him. Suddenly, another man cuts through the crowd towards Ek Chor. Cousin, have you eaten yet? Yes, yes. Come on, let's get you sorted out.

His cousin insists, taking charge of Ek Chor's meager belongings, all but a haversack. While feeling its grainy texture, curiosity peaks, and his cousin probes. What's in this? Seeds. Lots of them. Chia Ek Chor at 23. Never imagined he'd have to traverse oceans to eke out a living. Back in Chaozhou, his family were landowners, comfortably living off their land's yield. But fate had other plans. In the early 1900s, a mixed blessing struck the Chia family when the middle brother was accepted into university. Even then, the cost of higher education was astronomical, quickly devouring the rental income from the land. The day Ek Chor set sail, he probably noticed the multitude of farmers leaving with him.

It sparked an idea, a flicker of inspiration. Maybe, just maybe, seeds held more value than they seemed.

(03:16)

Initially, sales may have seemed sluggish, giving friends and acquaintances reason to doubt the venture. Seeds! Really? Money doesn't grow on trees. That won't make you any money. You actually think seeds will feed your family?

After all, couldn't a farmer simply replant crops from his own harvest? But despite this, Ektror held on, fueled by a belief that something bigger was on the horizon. And as if the universe conspired in his favor, Ektror. The synergy of global climate patterns began to shift, playing a pivotal role in what was to come.

In Thailand, where the rainfall can drench the soil up to eight times more than in Chaozhou, the land tells its own story. Here, minerals and nutrients are relentlessly washed away, a process known as leaching. This meant that while the first generation of crops flourished, their offspring were less robust, yielding smaller, weaker plants.

In this challenging environment, Chia Ek Chor chanced upon an unexpected opportunity. The local farmers, grappling with this agricultural problem, soon became lifetime customers. Without realizing it, Ek Chor's future began to blossom, deeply rooted in this newfound demand.

(04:52)

But just as swiftly as seasons turn, fortunes can also shift, particularly in an era shadowed by the relentless march of the Chinese Civil War and the looming onset of World War II.

For his humble seed shop to thrive. They would need to outgrow beyond his generation, enter business verticals that they never expected, and eventually blossom into a global food empire. Charon Pokkapan. CP. The Kitchen of the World.

(06:18)

CP Group is widely recognized in Asia, particularly for its diverse range of food products. This includes everything from ready-to-eat meals like shrimp wonton noodles and pasta. To fresh essentials such as chicken breast, pork, and fish. But there's more to CP's food empire than meets the eye. They're known in the industry for their expertise in vertical integration.

This means they manage the whole food process from farm to plate. It starts with producing animal feed and then moves on to operating farms for meat. For swine poultry and aquaculture, and concludes with the preparation and packaging of both raw and cooked foods. Their operation is extensive. Animal feed makes up about a quarter of their sales.

With farming contributing another half, and the rest coming from their food business. In fact, their products are so widespread that it's likely more than half of the world's population has eaten food that comes from CP, embodying their vision of being the kitchen of the world. Remarkably, 65 percent of their revenue comes from international markets, with the rest originating from Thailand, where they first started.

(07:48)

However, food is just one part of the huge CP Group empire. This conglomerate pulls in an impressive annual revenue of around 85 billion U. S. dollars. But interestingly, only about 60 percent of this is widely recognized. In their public business portfolio, the food sector makes up roughly a third. What might surprise you is that this is actually smaller than their distribution arm, which contributes another half.

They own a staggering 13,000 7-Eleven stores and nearly 3,000 Lotus-branded hypermarkets. supermarkets and mini markets. As for the remaining 10 percent of their known business ventures, it's in telecommunications. Truecorp, a part of the CP group, delivers coverage to 99 percent of Thailand and serves about 55 million subscribers, more than half of the entire Thai population.

It still astonishes us that the combined public presence in food, distribution, And telecommunications only reveals 60 percent of their empire. The rest, a significant 40 percent spans a diverse range of industries. In total, the CP group portfolio encompasses eight business lines covering 14 business groups, ranging from automotive to pharmaceuticals, all powered by the hard work of the CP group.

of approximately half a million employees. This vast network of companies has propelled the Chearavanont family to become the wealthiest in Thailand, placing them among the big five families. These families, not unlike Chaebols, at one point controlled assets amounting to about 20 percent of Thailand's entire GDP.

Being in such a spotlight invites scrutiny and rumors. leading them to generally keep a low profile. When the Chiriwetnons do speak up, it often seems aimed at easing any public concerns.

(10:14)

Take, for instance, Dhanin Chearavanont, the brains behind CP and the son of our distant traveler, Chia Ekchor. He has been known to dedicate entire pages just to clarify that CP isn't a monopoly.

He explains that in the 21st century, it's not about the big fish eating the small fish anymore. It's the fast fish that eat the slow ones. Dhanin emphasizes that CP must remain agile and alert. In his view, any competitor moving at a quicker pace could potentially overtake them. But while this sounds logical, especially with the rise of e-commerce, It's tough to see CP as an underdog.

After all, they are part of a powerful tripartite alliance with China's SITIC and Japan's Itochu. Combined, these three conglomerates have total assets nearly equivalent to Australia's GDP. It does make you think. Exactly how fast must the krill swim just to outpace the benevolence of a whale?

Geographically, Sipi's empire is a beast of its own. While Thailand is a significant part, China has played a major role. A little-known fact is that CP was actually the first foreign company to invest in Shenzhen when China first opened its doors. With a registration number 001, CP's venture in China Expanded into various sectors, at one point, even producing China's longest-running TV program.

The tale of how Danning became the face of CP, the transformative steps they took to become the kitchen of the world, and why China became an essential part of their empire is nothing short of fascinating. But the real story, the full breadth of their journey is a tale of time, a narrative so rich and expansive that it simply cannot be captured in a single generation.

(12:50)

Before we begin, the story of CP is actually incredibly difficult to piece together. It required us to explore not just articles in Thai. But also in Chinese and Japanese, who were early partners in the CP journey. Many articles were also interestingly removed, requiring us to dig deep into internet archives, but if you love everything that we've been doing so far, Send our podcast to a friend or drop a five-star review.

You hear that? Sounds like Chia Ek Chor's business is booming.

It's 1921, just two years after Chia Ek Chor first set foot in Thailand. And business is booming. By now, half of all immigrants in the area were from Chaozhou, many of them farmers in need of a dependable seed supplier. Chia Ek Chor, or rather, the Chia Tai Shop, is a newly opened Store that has become the go-to place for the name.

Chia Tai was inspired by an idiom, which loosely means to do everything fairly based on ethical principles. And for a Chinese immigrant, far from home, fairness is everything you could hope for. You see, there were already horror stories, circulating tales of promising job opportunities for families. only for their loved ones to disappear, often ending up laboring in farmlands across the globe.

With the influx of Chinese immigrants, the Chiat Thai shop began to thrive. Along with it, Bangkok itself started to transform, especially Yawarat Road, which became a mini Xiaozhou in its own right. The area buzzed with a Teochew dialect, with Thai barely audible. Some even said that without Thiochu, doing business there was impossible.

Life was treating the Chia family well. Soon, Ek Chor was joined by his wife, Thang Kim Kee. Over the next few years, they built a peaceful life together in Thailand and raised four children. Their youngest, born in 1939, and initially named Thang Kim Kee. would later be renamed Danin. The man destined to steer Sipi towards becoming a global empire.

Over the next two decades, Bangkok's Yawarat Road began to transform wider and deeper into a little Xiaozhou. This bustling area would eventually rank among the world's largest Chinatowns, dwarfing the one in Los Angeles by five times. Beside it, the Chao Phraya River A lifeline of commerce, pulsed with activity.

Merchants and farmers navigated its waters, ferrying goods up and down the busy channel. Many would stop at the Riverside Farmer's Market to sell their produce. And on the return journey, A storefront caught their eyes, visible even from the river's edge. It read Chia Thai, the seed shop run by the Chia family.

Thanks to this prime spot, Chiat Thai became a favored stop for local merchants and farmers to pick up seeds on their way home. Eventually, the Chinese population in Thailand swelled to represent the Chia family. 10 percent of the country, that's some 7 million people. By this point, you might be wondering, why was Thailand so welcoming to Chinese immigrants.

So much so that Yaowarat Road felt just like Shaozhou. The answer lies in the nuanced historical relationship between Thailand and China. While today's stance might be more cautious, historically, the bond goes way back to to King Thaksin the Great of Thailand in the 18th century. The story goes that a man of Teochew descent from China met and fell in love with Nokyang, a noble lady who turned out to be a princess.

Their son became King Thaksin the Great. The only king of the Thonburi kingdom, paving the way for modern Thailand. His reign forged a stable relationship with China, setting a precedent. As the rest of Asia underwent transformations, often under colonial rule, Thailand mostly remained free of Western dominance.

It's commerce. But by the early 1940s, the flood of Chinese immigrants, numbering in the hundreds of thousands, created a new kind of competition. One that the Chia family hadn't anticipated. Their prime location at Chiatay was no longer a guaranteed advantage. Chia Ek Chor realized He needed new strategies to compete in this ever-changing market.

To stay ahead of the game, Chia Ek Chor embarked on a quest for more robust seeds. Like most businesses at the time, his was limited by his network, which wasn't much different from any other Xiaozhou immigrants. To stand out, he realized he needed to connect with people beyond his usual circles. That's when he decided to bring on board Alexander Campbell.

Alexander was a bit of an anomaly. Though unmistakably British, he had mastered Thai, a rare feat back then. With Alexander's assistance, he Cha Thai began importing a wider and better variety of seeds. Looking back, hiring someone like Alexander seems obvious, but in the 1940s, sticking with your own kind was the norm.

Alexander Campbell would become a familiar figure in the life of Chia Ek Chor's youngest son. The boy, Guo Min, would often remember running through their three-story home, which also served as their business headquarters. and bumping into Alexander in the first-floor office. As a child, he might not have grasped the importance of having a British employee.

But later, when he took the name Danin, he would look back and realize how Alexander had shown his family that hiring the right person was what mattered most, irrespective of their nationality or race. Eventually, This learning would come to affect half a million employees in CP. With Alexander on his team, Chia Ek Chor's seed business expanded regionally.

They started harvesting seeds from farms in Shantou, in China's Guangdong province, shipping them through Hong Kong, and selling them to China. Not just in Thailand, but across Southeast Asia, including India. It was believed that this regional expansion gave Chiayi Tai the competitive edge it needed.

However, as the early 1940s unfolded, it became clear that competition was On December 7th, 1941, Japan launched its attack on Pearl Harbor. Less than four hours later, Japanese forces set foot on Thai soil.

It's a little-known fact, but Thailand's role in World War II. was, well, complicated. Before the war, Thailand's government was swinging between admiring Japan to fending off a potential Japanese threat. Eventually, they settled on proclaiming neutrality, but this stance was short-lived, as Japan invaded Thailand shortly thereafter.

Surprisingly, negotiations between Thailand and Japan were quick and somewhat accommodating. This swift diplomacy effectively transformed Thailand into a puppet regime, sparing the country from the brunt of Japan's aggression. Chiatai's store was spared, but with Japan's dominance in Thailand, the usual trade routes with China crumbled.

Finding himself cornered, Chia Ek Chor made his way to Malaysia, where their business had branched out. But Thailand's Partnership with Japan opened the floodgates, unleashing unspeakable horrors across the Malaysian peninsula. In under three months, the landscape of Southeast Asia changed dramatically.

Japanese forces, in a relentless push southeast, Word captured Singapore, the strategic Southern tip by February 15th, 1942. This rapid shift put the entire region under a tight Japanese grip, making any attempt to slip away a perilous endeavor for those of Chinese descent. The situation was even more dire.

With Japan fiercely battling China, being Chinese in Japanese-occupied territories meant facing heightened risks and suspicion. Amid this turmoil, Chia Ek Chor had no choice but to go into hiding in Malaysia. He entrusted his store, the core of his family's livelihood, to his brother's care. Meanwhile, his children were to be taken care of. Kim Ki, his wife, Miss Tang was born a rich man's daughter, but her whole world turned upside down in an instant. The day the tsunami swept across the area, it took away their grandmother and plunged the family into poverty. In those harsh times surviving on handouts. A young Miss Tang forged a principle close to her heart.

The promise to extend kindness to others if fortune ever smiled upon her again. Growing up, Guomin, their youngest son, was a keen observer of the generosity that defined his mother. He saw her giving money to relatives in need and sharing meals with the maids. This environment of compassion and empathy laid the groundwork for Guomin's values.

Teaching him the importance of kindness in all interactions, a lesson rooted in the fact that his mother's life was saved by such generosity. Amid the chaos of allied bombings in Bangkok and rising skirmishes, the family remained under the radar, enduring each day with resilience and hope. They awaited the moment when the tides of war would change, which finally came on September 2nd, 1945.

I deem this reply a full acceptance of the Potsdam Declaration. World War II was finally over, and Chia Ek Chor could return home. Which specifies the unconditional surrender of Japan at the earliest possible moment. His return would be pivotal in Guomin's growth to become the Dhanin that we know today.

It's likely the latter half of the 1940s and the cha tai shop buzzed with activity. The rhythmic shoveling of seeds mingled with the crisp rustling of paper bags and the steady murmur of customers discussing the day's best picks. Kwa Min, a young boy with curious eyes, approached his father's stall, weaving through the crowd.

His father, a middle-aged man with a sturdy build, was meticulously arranging small paper bags of seeds, their colors vibrant against the muted backdrop of the market. Gua Min, tilting his head, said, Father, people are laughing at how pretty our seed bags are. Let them laugh, Gua Min. Beauty has its purpose.

Pointing to the logo on the bags, a stylized airplane, his father asked, Do you know why our logo is an airplane? Guamin shook his head, his gaze fixed on the emblem. Airplanes symbolize modern civilization, science, and advanced technology. They represent progress and the future. Turning to face Gua Min, his father's eyes gleamed with conviction.

We must operate differently from everyone else. We are not just seed sellers. We are the modern seed sellers. Our approach, like these airplanes, must soar above the ordinary. At the time, it's likely his father's words simply flew above the young Guamin's head. But years later, when renamed as Danin, he would recall moments in time where his father taught him what it meant to be customer-centric.

You see, each packet of seeds from Chaatai wasn't just packaged attractively. It came with something unique. An expiration date. Something that few competitors had. Chia Tai also had a policy. Any expired seeds could be returned. No questions asked. This reflected how Chia Ek Chor truly understood his customers' needs.

Reaching down to his sons, he would often explain that farming is back-breaking work. If the farmer plants the seeds and waters them every day, but they never sprout, he suffers a tremendous loss. There's no way I will cause my customers to suffer a loss. Post-war, as peace returned and life resumed its rhythm, the cha tai shop continued to thrive.

For the family, life moved on too, which much to Guamin's dismay, meant finally starting school.

Schools in Thailand are a little more unique than most. Boarding schools are common and often regarded as institutions of higher standards. For Guamin, He joined a Christian boarding school in Ratchaburi province, west of Bangkok. There, like every growing man, he learned Muay Thai and raced roosters for fighting.

Back in the old day, common entertainment included raising spiders, cocks, and dogs to fight. Thank God for Netflix. Gwamin would spend the next five years in boarding school, before his father, Chia Ek Chor, would offer him a proposal. Right before World War II, China was on the brink of its own internal turmoil, teetering into a civil war sparked by deep-seated political rifts. This conflict pushed Mao Zedong and about 65, 000 of his followers into an arduous journey through treacherous mountains and rivers spanning some 9, 000 kilometers, nearly

This expedition, known as the Long March, became a testament to the resilience of the Communist Party. During World War II, the democratic and communist factions in China momentarily united against a common enemy, the Japanese. But it was a fragile truce, merely a pause in their own conflict. As soon as World War II ended, the Civil War reignited.

Finally. In October 1949, the Communist Party emerged victorious, heralding the birth of the People's Republic of China. In the aftermath, a call was sent out to ethnic Chinese around the world, urging them to return and contribute to what was envisioned as the imminent rise of the greatest nation on earth.

This call reached the ears of Chia Ek Chor. Like many other Chinese, he was captivated by the prospect of contributing to his ancestral homeland. Eyeing his youngest, Hua Min, he proposed an idea. A trip to China for education and connection with their roots. Likely traveling with a suitcase packed with excitement, both father and son knew that their futures were going to change.

But not in the way they had hoped. Their initial welcome in China. Was fleeting. The country soon shifted its stance. Realizing that many of these returning business owners embodied the very capitalist ideals the Communist Party had struggled against. In an abrupt and harsh awakening, the Chia family discovered that all their property in China had been confiscated by the government.

What now? From 1Up Media This is Empires, episode one of a five-part series, Money on Trees. Next on Empires, witness Gwomin's rise as he faces a harsh reality. What do you do when an entire division collapses, taking you down with it?

Follow us so you won't miss out on episode two of our five-part series. Return to Roots. Empires is a 1UP Media original, produced and written by Guang Jin. Edited by Alex. Audio experience by Ethan Sam. Additional engineering by Ashley from 1UP Media. And narrated by Luis Cruz and Claire Bernal.

International research by Sonia and Jiamin from 1UP Media. A quick word on our reenactments and dramatizations. While we can't know exactly what they say, think, or feel at the moment, it is all based on research. Thank you for listening.

Thank you for listening to this special collaboration episode between Brave and Empires.

If you enjoyed this episode, their full five-part series can be found on their channel link in the description on www.bravesea.com.