Bloomberg News

Cockfighting Thai Billionaire Makes Top Chinese Purchase

December 11, 2012

Charoen Pokphand Group Chairman Dhanin Chearavanont

Dhanin Chearavanont, chairman of Charoen Pokphand Group, left, looks at a champion rooster during a media visit to a cockfight arena in Kohjang, Chonburi province, Thailand, on Jan. 20, 2012. Photographer: Dario Pignatelli/Bloomberg

Thai billionaire Dhanin Chearavanont, who started raising hens when he was nine years old, still owns poultry farms as part of his retailing and telecommunication empire. He also raises them for sport.

“I never get bored of watching the elegant way they move and their beauty,” Dhanin said during a visit to Chachoengsao province in eastern Thailand in January. Cockfighting “isn’t a game that tortures the animal because chickens can’t be forced to fight. They fight when they want to fight. If they don’t want to fight, they walk away.”

The philosophy could apply to his 43 years of building a family seed business into Thailand’s biggest agricultural company and conglomerate with 280,000 employees and $33 billion in revenue. Last week’s acquisition by his Charoen Pokphand Group Co. of HSBC Holdings Plc (5)’s 15.6 percent stake in Ping An Insurance (2318) (Group) Co. for $9.4 billion marks a rare foray into financial services 33 years after Dhanin became the first investor in China when Deng Xiaoping opened the economy.

The Ping An deal is the biggest purchase by a foreign buyer in China, according to data compiled by Bloomberg.

Dhanin’s net worth was an estimated $6.2 billion on Dec. 7, according to the Bloomberg Billionaires Index. Almost 60 percent of the fortune is from overseas private companies. The 73-year- old was not available for an interview for this story.

Savvy Industrialist

“He understands how to work with governments and politicians, and has shown his ability to survive and thrive under any administration,” Korn Chatikavanij, a former Thai finance minister and deputy leader of the opposition Democrat party, said in an interview in Bangkok on Nov. 27.

Dhanin turned the seed business his father established in Bangkok in 1921 into Thailand’s largest agricultural group, before expanding into retailing, telecommunications, real estate and an insurance joint venture with Allianz AG.

The group’s Chinese business includes more than 200 companies, employs more than 80,000 people and has annual sales exceeding 50 billion yuan ($8 billion), according to its website. Dhanin’s first company in China has a registration number of 001.

“He has been in China for a long time through his agri- business and has built very strong political connections there,” Yupana Wiwattanakantant, a professor at NUS Business School in Singapore who teaches a course on Asian family businesses, said by phone on Nov. 21.

Past Stumble

The Thai tycoon has stumbled in the past. Much of the Chearavanont family’s wealth eroded after Thailand devalued its currency in July 1997, triggering a recession in much of Asia. When the empire began to falter under foreign loans, Dhanin froze debt payments, halted dozens of ventures and sold assets to save the group.

“He has the image of someone who goes slow, but firm, not that of a maverick dealmaker,” said Yupana, the NUS professor.

The Ping An acquisition, which was announced Dec. 5, adds financial services to Dhanin’s $6 billion empire in China.

“Financial services remains one of the missing puzzle pieces” for CP Group in China, Voravan Tarapoom, chief executive officer of BBL Asset Management Co., which oversees about $7.5 billion, said by e-mail. “China is an ideal place to invest in the insurance business since it has the world’s largest population and penetration level is still low.”

Ping An is one of few non-state-owned financial companies that provide banking, securities, trust and asset-management services in China, and Dhanin will probably use the stake as a starting point for expansion in the industry, Voravan said.

Charoen Pokphand is “confident that any business alliance which may be developed with Ping An will mutually benefit” both companies, it said in an e-mailed statement Dec. 10.

Puzzle Piece

“I see CP’s strategy in China being somewhat similar to what they did earlier in Thailand,” Pavida Pananond, associate professor at Bangkok’s Thammasat University who studies Thai business ventures abroad, said by e-mail. “That is to follow an opportunistic growth strategy and diversify into sectors that are developing and do not have too high competition.”

Charoen Pokphand has a 36 percent stake in Charoen Pokphand Foods Pcl (CPF), Thailand’s biggest producer of animal feed, and 53 percent of CP All Pcl (CPALL), the world’s third-biggest operator of 7- Eleven stores, according to data compiled by Bloomberg.

Cockfighting Passion

When not overseeing his businesses, Dhanin indulges his passion for cockfighting and breeding native hens and pigeons, he told reporters on a Jan. 20 visit to Chachoengsao province in eastern Thailand. He has a breeding farm in Chonburi province south of Bangkok and keeps caged pigeons at an office in the capital.

Dhanin said his work with farmers, which includes providing land, expertise and technology, was inspired by the teachings of Thailand’s King Bhumibol Adulyadej, the world’s longest reigning monarch who turned 85 earlier this month.

“People who feed the country shouldn’t be poor,” said Dhanin, who wore an ivory belt buckle in the shape of a native hen, a gift from Yuenyong Opakul, a popular Thai country singer who has known the tycoon for 12 years.

Yuenyong has accompanied Dhanin to watch cockfights in countries including China, Cambodia and Vietnam, he said Jan. 20.

Dhanin’s three sons aren’t involved in the group’s established business because he wants them to prove their ability, Suthana Hongthong, a Charoen Pokphand spokeswoman who has worked with the company for two decades, said by phone on Nov. 27.

Eldest son Supakrit ran a cable-television operation in Thailand and now a real-estate business in China, according to the company. Second son Narong runs the retail unit, including 70 Lotus supermarkets in China. Youngest son Suphachai is the chief executive officer of True Corp. (TRUE), Thailand’s third-biggest mobile-phone operator.

Dhanin said in January that his business principles are anchored in Buddhist beliefs.

“He’s definitely not flashy,” said Korn, the former minister. “He’s visionary, of course, given the way he’s expanded his business.”

To contact the reporters on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net; Sanat Vallikappen in Singapore at vallikappen@bloomberg.net

To contact the editor responsible for this story: Lars Klemming at lklemming@bloomberg.net


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