News Release (Sumitomo Corp.)
Apr. 09, 2012
Basic Equity Participation Agreement for Rice Business in China
Sumitomo Corporation (President and CEO: Susumu Kato; Head Office: Chuo-ku, Tokyo) and Jilin Grain Group Co., Ltd. (President and CEO: Meng Xiang Jiu; Head Office: Changchun, Jilin Province, China; hereinafter, "Jilin Grain Group") have agreed to tie-up in the business of rice accumulation, milling and distribution in China, as part of the Comprehensive Alliance for which the two corporations signed in 2010.
Jilin Grain Group is a Jilin provincial government-owned, farm supply enterprise which owns 100% of Jilin Grain Group Rice Industry Co., Ltd. (President and CEO: Wu Huai Xiang; Head Office: Changchun, Jilin Province, China; hereinafter, "Jilin Rice Industry"), specializes in rice accumulation, milling and distribution in China. The new agreement will allow Sumitomo to take a stake in Jilin Rice Industry, better positioning itself to expand its rice business in the Chinese market. This is one of the projects materialized by Sumitomo Corporation's Food Task Force, which has been established to promote company-wide commitment in this field.
Chinese people's demands for safety as well as satisfaction of thirst for better taste and higher quality in food is becoming more prominent due to market's rising awareness. In line with this recent trend, acceptance for traceability is soaring in the Chinese market. Jilin Rice Industry has developed its accumulation network within Jilin Province, a province known as one of the leading production area of high quality short-grain rice. By introducing Japanese rice milling technology and marketing know-how, Sumitomo Corporation aims to enhance China's underdeveloped mid- and high-class branded rice segment, by expanding existing sales channels such as mass retailers and food service operators.
Sumitomo Corporation has structured a Global Partnership Scheme to develop new business, in alliance with leading and promising enterprises, across borders as part of 2011-2012 mid-term management plans. Sumitomo Corporation will push forward its partnership with Jilin Grain Group and realize further agricultural projects in China.
・Outline of company to be partially owned:
1. Company name : Jilin Grain Group Rice Industry Co., Ltd.
2. Business line : Rice accumulation, milling and distribution in China
3. Location : Jilin Province, China
4. Ownership : Jilin Grain Group: 70-75%; Sumitomo Corporation: 25-30%
(acquired through allocation of new shares to a third party)
Note: A final agreement will be discussed and concluded
between the two corporations in the following days.
Corporate Communications Department,
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