Emerald Group forecast a transformation of the Australian grains industry after letting Sumitomo Corporation, the heavyweight Japanese trading house, into the market through a stake sale.

Alan Winney, the Emerald chairman, said that the deal would enable the middle-ranked grain handler to accelerate tie-ups with peers, open new offices and gain "unrivalled" access to Asian markets covered by the Sumitomo empire.

For rival grain marketers, such as AWB and GrainCorp, the deal would mean accommodating a Japanese corporate icon, with a stock market value of $13.7bn, and revenues in its last fiscal year of about $130bn.

"The financial strength of Sumitomo dwarfs that of our main publicly listed competitors in Australia and is likely to lead to a change in the whole dynamic of the Australian grains industry," Mr Winney said.

Sector revolution 

If true, such as transformation would represent a second in three years for the industry, following the removal of AWB's monopoly on foreign wheat sales, which allowed rivals, such as Emerald, in on the export market.

Emerald has, through an existing trade deal with Sumitomo, gained top rank in the market for exporting Australian premium wheat to Japan.

The deregulation has already attracted a wave of foreign investors, with America's Cargill, Singapore-based Olam and Germany's Toepfer expanding into the market and Canada's Viterra snapping up ABB Grain, the former barley specialist.

Meanwhile, GrainCorp last year bought a malt business to expand its grain processing operations, while AWB launched a quest for a foreign partner.

"In the face of continuing industry consolidation and the move of international companies into the Australian market, we have looked for a means to allow Emerald to accelerate its growth," Mr Winney said.

Independence pledge

Emerald declined to reveal the financial details of the sale, which would leave 50% of the company in the hands of directors and other employees.

It added that the deal would have no impact on its joint venture partners, nor allow Sumitomo cheap grain.

"Emerald will continue to seek maximum pool returns… through any available markets that provide the best price," the company said.

The group would operate independently, and "ensure that Sumitomo are only buying at market prices".