Linked In
News In
Linked In

You are viewing your 1 complimentary article.

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 eCard

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 eCard
Related Stories

Dairy prices find calm at GDT, as investors await milk production signals

Skim milk prices correct their unexpected surge of the last session, while whole milk powder values avoid the tumble suggested by futures values

Will protein prices fight back against fat in dairy markets?

Prices of fats remain elevated against protein values in dairy - at a time when the opposite is true in markets for oilseed products

World phosphate, potash shipments to grow in 2018, helped by Chinese needs

Mosaic forecasts further demand expansion, as it heralds a "transformational year" for its own fortunes, after a 2017 marred by a one-time tax charge

Deere lifts sales hopes - even as it unveils biggest loss in 25 years

The maker of John Deere tractors flags "strengthening" market conditions, but swallows a huge writedown prompted by US tax retorms
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 AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069