CP Group's success story sours as debts force asset sale

What a difference a year makes. Only last summer Charoen Pokphand Group chairman Dhanin Chearavanont was lauded by politicians and journalists alike for his uncanny ability to parlay market opportunity and personal relationships into a mainland business empire.

CP Group was, seemingly, the China success story. Through a tangled and often opaque arrangement of 156 projects involving direct investment of more than US$2 billion, the group was reaping profits through the manufacture and sale of everything from grains and chicken meat to motorcycles and over-the-counter Chinese medicines.

The group even boasted its own mainland-based financial company - Chia Tai International Finance Co - which it established in 1992 to fund many of the group's later pharmaceutical and retail investments.

Mr Dhanin, too, was considered the emblematic mainland operator, a man who rallied agri-business savvy into an empire embracing industrial, telecommunications and real estate interests. Mr Dhanin boasted his own home-grown blend of Western management expertise with exceptional family guanxi that allowed him to call Japanese motorcycle maker Honda and Dutch brewer Heineken partners, and Deng Xiaoping and Jiang Zemin friends.

'Our secret is to do exactly what the Chinese Government wants,' Mr Dhanin told Asiaweek in August. That meant sharing with mainland partners, training local staff, and introducing advanced technology.

For Mr Dhanin, the pay-off arrived when diversification into the mainland allowed the Thai group to escape apparently unhurt from the economic whirlwind that swept through Southeast Asia during the latter half of last year.