Sumitomo Corporation (The headquarters: Tokyo ,Japan president: Susumu Kato,hereinafter Sumitomo) basically agreed to establish investment company in Singapore with Prima Limited (The headquarters: Singapore, chairman, CEO Primus Cheng, hereinafter Prima)and has its 50% share. (Prima is one of the largest flour mill group in Asia.)

Sumitomo Corporation ,through above the investment company , will invest to Wheat flour milling factory named Qingdao Xinghua Cereal Oil & Foodstuff Company Limited  at Shandong Province in China. (hereinafter, Xinghua) This investment company has 46.73% share of Xinghua( Sumitomo Corporation indirect share: 23.365%) .
Prima has been a  no.1 shareholder since establishment of Xinghua in 1986.
Xinghua, as a foreign invested wheat flour milling factory in China ,has been reputable company in term of wheat flour quality and its quality consistency and also has ISO and green food (*1). Based on this good reputation, Xinghua has many customers including Japanese and other foreign invested company in China.
Through this investment, Sumitomo will contribute to Xinghua by supplying wheat from Australia by utilizing Sumitomo's in-land grain silos and export terminal and wheat from other overseas and also by providing sales support for wheat flour and wheat flour related products in both China and overseas.
 
Sumitomo Corporation and Prima have been a strategic partner since 2006 in order to expand business opportunity in growing market like China and South-Asia.
Based on this partnership and this investment, Sumitomo will expand wheat flour related business in China together with Prima.

Nowadays , in China , the demand for high-quality wheat flour based products (bread, cakes, and frozen foods, etc.) has been increasing in response rapidly economic growth in China and increasing income to consumer.
This tendency accerallate to increase the demand for hi-quality wheat flour with its consistency in China as well.
To contribute such requirement in China , Sumitomo decided to enter into wheat flour milling business.

Meanwhile, Shandong province where Xinghua is located has no.2 population (93million) in China and remarkable growing province as below.(*2)
GDP : Growth ratio 14.7%, Average 10.7% in China
GDP per head : 24Thousand RMB (no.7 in China), Average 16Thousand RMB
As above, Shandong province itself is attractive place as a market, as well as good location to access to big market like Shanghai and Beijing.
 
Moreover, the Shandong province is a huge production area of grain , meat and freshness,
Based on availability of such raw materials ,Shandong province is a No.1 place where Japanese food related companies come and produce in China. Nowdays ,the Japanese food manufacture comes up with the sales expansion strategy that catches China as not only the location of manufacturing but also a consumer market, To meet with such demand, Sumitomo will contribute to the customers through wheat flour supply from Xinghua.

(*1) Green food: It is defined by the national certification that Chinese agriculture part "Chinese green food  

      development center" does, "In the production process, it is uses neither the reduced pesticide in regulations nor

      the genetically modification technology at all and a produced safe, excellent qualities, and sanitary foods (The

      raw material and finished goods are contained)".

(*2)Origin: 2007 versions in JETRO Qingdao office

1.New company overview
(1)Company name 【 English 】Baiyou Investments Pte . Ltd.
                            【 Chinese 】百友投資有限公司
(2)Address: Singapore
(3)Establishment : 2008
(4)Stockholder : Sumitomo group 50% , Prima50%

2.Outline of Xinghua
(1)Company name: Xinghua Cereal Oil & Foodstuff Company Limited
(2)Address: 60,Tieshan Road,Jiaonan City,Qingdao,Shandong Proinve,China
(3)Establishment: October, 1986
(4)Activities: Sales of mill, flour, and wheat flour related products

3.Outline of Prima
Head Quarter location : Singapore
Flour milling place and no. :

              1 factory in Singapore since 1961
              1 factory in Sri Lanka since 1977
              2 factories at Shandong province in China( Xinyan in 1985 and Xinghua in 1986)

(Map of Shandong Province)
 

(Prima Limited, Singapore)

(Xinghua)

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