By the end of the 1980s, the growing CP empire had already produced some $4 billion in revenues. Yet a
significant part of that figure no longer came from the group's core food interests but from its increasingly
diversified operations. The company's entry into the restaurant sector came in 1988 with the launch of
Chester's Grill. That same year, CP launched its own supermarket group, Makro, which quickly became a
leader in Thailand's retail sector. The following year, CP entered the dairy market, partnering with Japan's
Meiji group to launch the CP Meiji line of dairy foods for the Thai market. The company also added
convenience stores that year, gaining the Thai franchise for the 7-11 retail format. The company quickly
began building that format into a national chain, adding as many as 20 stores each month and reaching a
total of 1,000 by the end of the 1990s.
Yet the company's diversification went even further. In 1989, CP joined with Solvay of Belgium to launch
Vinythai Co., a manufacturer of polyvinylchloride. The following year, the company made an even bolder
move, forming a partnership with the U.S. telecommunications firm of NYNEX (later Verizon) to launch
TelecomAsia (TA) in a move to compete against the government's former telephone monopoly in Bangkok
market. In 1993, TA went public on the Bangkok Stock Exchange and began construction of its own fiberoptic
telephone network, which reached 2.6 million lines at the end of the decade.
TA was not the only one of CP's companies to be listed publicly, as the company brought Charoen
Pokphand Feedmill, Siam Makro, and Vinythai to the Bangkok exchange, as well as its Hong Kong
subsidiary, CP Pokphand to the Hong Kong exchange, a Shanghai-based animal feed and poultry group to
the Shanghai exchange, a real estate development arm, Hong Kong Fortune, to the Hong Kong exchange,
and Ek Chor China Motorcycle to the New York exchange. Investors seized the opportunity to purchase a
stake in one of Asia's fastest-growing conglomerates. The public listings also represented a rare instance
of financial transparency among the region's usually super-secret corporations. However, these publicly
listed companies in fact represented only a small part of CP's total holdings.
Into the mid-1990s, CP continued to seek new means for diversifying its holdings. In 1994, the company
launched its first Lotus Supercenter retail store, which it developed into a national chain in Thailand. CP
also began nurturing an ambition to enter the semi-conductor market, beginning negotiations with Chinese
officials to act once again as partner for foreign investors. By then, however, China had gained sufficient
confidence in its dealings with foreign corporations and no longer needed CP to play the role of middleman.
Instead, CP suddenly found itself facing a new wave of competition in China as the international business
world, including industry heavyweights operating on a global scale, rushed into what was fast becoming the
world's largest single market.
The economic crisis that swept through the Asian region caught CP short as well. The company's fiber
optic network went online concurrently with the country's financial collapse, and TelecomAsia was hardpressed
to find customers. Only half of the 2.6 million lines were rented by the end of the decade, forcing
TA to default on payments and landing it $1.5 billion in debt. In return, the company's banks froze its line of
credit across all of its operations.
CP, like many of the region's conglomerates, was forced to recognize that its diversification drive had been
too ambitious. Unlike its counterparts, however, CP acknowledged its errors publicly, pledging to refocus its
operations and at the same time simplify its structure in an effort to enhance the company's financial
transparency.
CP began shedding a number of noncore businesses, such as its Thai-based Lotus Supercenter operation,
the majority of which were acquired by the United Kingdom's Tesco and renamed Tesco Lotus. The
company also sold off its Ek Chor Motorcycle subsidiary's Shanghai manufacturing stake and shut down a
number of TA subsidiaries. Another feature of the company's restructuring was its willingness to turn down
new joint-venture "offers," which typically involved the company taking on debt. If previously a number of
the group's subsidiaries had built up debt-to-equity ratios of more than 1,000 percent, they were now under
orders to pay down debt and balance their books.
Into the new century, CP decided to refocus itself as the "Kitchen to the World," looking to its core
agribusiness holdings for future growth. As part of that effort, and in an attempt to increase its financial
transparency, CP merged 11 of its Thai agribusiness subsidiaries into core group Charoen Pokphand
Feedmill by 1999. Charoen Pokphand then became the main vehicle for the now "focused" CP.
The company's emphasis on gaining focus did not, however, prevent it from maintaining its diversified
business interests, nor from entering new markets, such as the mobile telephone market in partnership with
Orange in 2000, or an entry into the e-commerce market with the launch of Phantavanij and eMarketplace
in 2001. CP had not abandoned the retail market either, and in 2002 the company began construction on a
new style "super brand" Lotus mall in Shanghai, raising the number of the group's stores in China--where it
maintained 100 percent control of the Lotus chain--to ten by 2003.
By then, Dhanin had been consecrated by Fortune magazine as one of its "World's Most Powerful
Business Leaders" and the only corporate chief in the ASEAN economic zone to be featured on the list. As
part of this recognition, Dhanin was credited with having built a fully vertically integrated agriculture-to-retail
empire, including the world's largest producer of animal feed and one of the top producers of eggs, poultry,
and other livestock. With some 250 companies, 100,000 employees, and more than $13 billion in revenues
in 2002, the Charoen Pokphand Group represented a true success story.