Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Olam-Mitsubishi deal bears fruit with cocoa, coffee import tie-up

Twitter Linkedin

OIam International unveiled a joint venture with Mitsubishi Corp for importing the likes of cocoa and coffee into the key Japanese market, in the first major step under the groups "strategic partnership" agreed in September.

The trading houses on Friday unveiled the formation of MC Agri Alliance, of which Olam will own 30% and Mitsubishi Corp hold a 70% stake, expected in October to begin agricultural commodity imports to Japan.

The tie-up will focus on a portfolio of foods including vegetable ingredients and tomato products edible nuts and sesame, but also coffee, of which Japan is a particularly key market.

The country, which has a population of 127m people, is the third-ranked coffee importer, after the European Union and the US.

Equity boost

The joint venture is aimed at marrying Olam's status as a major originator of major commodities - purchased from sources including from more than 4m farmers, many smallholders – with Mitsubishi Corp's strength trading in Japan.

Mitsubishi Corp is also aiming to enhance control, and traceability, over its supply network.

And the tie-up also fulfils a pledge made last year when the groups announced a deal which saw Mitsubishi Corp pay Sing$915m for a 20% stake in Olam, as part of a programme by the Singapore-based group to tackle concerns over its debt levels.

The companies at the time also mentioned cotton and rice as potential markets in which they could co-operate, as well as in grains, in which they formed a joint venture in Australia two years ago.

'Bigger, bolder steps'

Olam International finance director N Muthukumar in February, as the group announced a return to full-year profits, said that the deal with Mitsubishi, who have two directors on the Singapore group's board, had "set the tone and pace for a very strong and long-term shareholder base".

Olam's top shareholder is Singapore wealth fund Temasek Holdings, with a 51% stake.

The deal has also allowed Olam to "look at prospective and selective bigger, bolder steps going forward".


Twitter Linkedin
Related Stories

Festive staff shortages 'likely' as British growers cut ties with UK supermarkets

Faced with mounting concerns over labour shortages and fears they may not be able to fulfil retailer contracts, some British growers have sought to cut ties with UK supermarkets in favour of companies elsewhere in Europe.

Hard Brexit to have 'catastrophic' effect on European meat industry; new report

A hard Brexit will have a ‘catastrophic impact’ on the European meat industry, according to a report published by Europe’s meat industry body, UECBV, as the UK and EU continue negotiations.

Manufacturers stockpile agrochemicals in bid to keep post-Brexit prices down for farmers

Manufacturers of crop protection products are stockpiling agrochemicals in warehouses in a bid to keep input costs down for farmers after Brexit, according to the chief executive of the Crop Protection Association, Sarah Mukherjee.

Dairy groups sidestep shockwaves from GDT price slump

Indeed, shares in the likes of A2 and Beston soar. Still, that does not mean there are no losers from the dairy price falls...
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069