NEWSMAKER-Thai billionaire Dhanin's bold bet on China growth

BANGKOK Thu Dec 6, 2012 6:26am EST

BANGKOK Dec 6 (Reuters) - Thailand's wealthiest tycoon, Dhanin Chearavanont, can trace his business empire to China's bustling Guangdong province in the 1920s, when his father left for Thailand to set up a seed company in Bangkok's Chinatown.

Nearly a century later, their family-run conglomerate, Charoen Pokphand Group (CP), is returning to its Chinese roots in a bold $9.38 billion deal to buy HSBC's 15.6 percent stake in China's No.2 insurer, Ping An Insurance, Asia's second-largest deal this year.

For Dhanin, the 73-year-old patriarch of the agri-industrial group, the investment marks a natural progression in a business strategy that has tilted towards China for three decades. But it nonetheless marks a bold new chapter for a company best known as Thailand's largest feedmeal and poultry producer.

"China is important for CP and the deal will open ways for the group to expand in the country," said an investment banker who declined to be identified. "The insurance business is hot and China has a low penetration rate, which provides growth potential."

Insurance is not an obvious fit for a group that, through its flagship Charoen Pokphand Foods, is the world's biggest shrimp farmer and top maker of animal feed. CP Foods also operates CP Fresh Mart food shops.

But it has long had its eye on China. Known as Chia Tai in China, the unlisted CP was the first multinational company to invest in the country's agribusiness industry in 1979.

Under Beijing's latest five-year plan, it was tasked with helping to modernise China's farm sector. It runs a finance business through Zhengxin Bank and also operates Lotus supermarkets in Shanghai, according to the company's website.

Dhanin, Forbes Asia's Businessman of the Year in 2011 with assets of $9 billion, was ranked as China's number one foreign business leader in a 2009 poll by Chinese Economic Weekly.

The youngest son of the Thai-Chinese family, he has been at the helm of the business since the age of 30, turning it into a multinational operation by expanding its ventures in farming, retail and telecommunications.

His father, Chia Ek Chor, and his uncle, Chia Seow Hui, had left Guangdong in 1921. In 1946, their seed shop was renamed Charoen Pokphand, which means "prosperity of consumers" in Thai, and their business diversified across Asia via a number of enterprises and contract farming.

JAPANESE VENTURE

CP Group branched out from seed into feed, farms, grain trading and feed mills.

"I'm confident in the power of Asia, which will play a more significant role in the world's trade," Dhanin said at the 12th Forbes Global CEO Conference in Dubai in October.

China is already a major investment base for CP Group, which operates 109 animal feed plants spread through 29 of the mainland's 31 provinces. It also has auto, medical, machinery, retail and property interests.

CP Group, which aims to be "the Kitchen of the World", recently formed a joint venture with Japanese food-chain operator Yoshinoya to open beef-bowl restaurants in China.

Dhanin, also Chairman of CPF, has five children and his youngest son, Supachai Chaeavanont, controls True Corp , Thailand's only fully-integrated telecoms service provider.

Dhanin is known to be fascinated by traditional Thai cockfighting and has a special centre to preserve native breeds in the eastern province of Chon Buri. (Reporting by Khettiya Jittapong; Editing by Alex Richardson)

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