February 8, 2007

Singapore's Olam, Chinatex agree on oilseeds, cotton joint ventures

Singapore's Olam International Ltd has agreed to form joint ventures with Chinatex Corporation, the largest cotton supplier in China, in the cotton and oilseeds businesses.

In the oilseeds business, Olam agreed to buy a 35 percent stake in Chinatex Grains and Oil Corporation for US$13.5 million, which Chinatex Corp has established to set up a soybean sourcing subsidiary in Brazil.

Olam migh increase its stake in the Brazilian joint venture to 45 percent within two years.

China is the biggest consumer and importer of soybeans in the world, consuming about 45 million tonnes of soybeans annually.

Besides, the two firms also plan to enter into a 50-50 joint venture to establish a cotton sourcing and distribution operation in China..

As part of the deal, Olam would supply 30 percent of Chinatex's annual cotton imports.