Mar. 05, 2010
Sumitomo Corporation Enters into Grain Accumulation Business in Australia～Expanding Exports Toward Asia and Middle East～
Sumitomo Corporation (President and CEO: Susumu Kato; Head Office: Chuo-ku, Tokyo) has acquired 50% equity stake in Australian based grain company Emerald Group Australia Pty Ltd (Chairman: Alan Winney; Head Office: Melbourne, hereinafter "Emerald") and would enter into grain accumulation business in Australia.
Emerald is a privately owned independent grain accumulation company, established in 2004, growing fast in the recent deregulation in Australian grain industry. It operates as an originator of various grains, such as wheat, barley, canola etc., with a strong relationship with the Australian grain growers, and take roles between the farm gate and FOB position. Emerald aims to achieve an annual marketing volume of 5 million tonnes of grain within the next 5 years, equivalent to approximately 15% of the annual Australian grain crop production.
Sumitomo has invested in grain storage and export terminal operations business in Australia since 2005. By entering into the accumulation business through Emerald, it will become the only Japanese firm to form a value-chain from the farm gate to the port of exportation.
Australia, being one of the major grain producing countries that yields more than 30 million tonnes of grain annually, is respected as one of the most important grain exporting countries in the world. The quality crops and the favorable geographic condition is enabling Australia to export grain mainly to Asian countries and to Middle East. The quality of Australian grain is highly accepted by Japanese flour mills for the use for high grade noodles as well.
Demand for grain in Asia is increasing due to the population growth and changes in the diet, and this is not only for wheat (usage for noodle, bakery, confectionary etc.) but also for edible oil demand (Soy, Canola etc.) and Feed demand (Corn, Barley etc.).To respond such situation, Sumitomo is going to form a stable supply chain in Australia, and will enlarge its export operation to Asian and to Middle Eastern markets.
In Asia, Sumitomo has entered into a strategic partnership with one of the largest flour mill /food group in Asia, Singapore based Prima Limited in 2006. Together, it has invested in flour mill operation in China. Like-wise, Sumitomo will seek to expand its down stream business opportunities in Asian countries as well as strengthening its up stream business value chain.
After harvesting, farmers would bring the grain to the designated silo and deliver to Emerald
The grain collected by Emerald goes to export terminal operations company and
would be exported to Asia, Middle East and Japan.
Corporate Communications Department,