April 7, 2011

South Korea to set up grain firms in Brazil and Russia

Korea Agro-Fisheries Trade Corp. (aT) plans to set up international grain distribution companies in the Maritime Province of Siberia and Brazil, after setting up one in the United States.

Korea Agro-Fisheries Trade Corp.announced on Wednesday (April 6) that it conducted a local business survey and will begin devising a business plan to open new grain firms in Russia and Brazil. It plans to secure a total of US$800 million stakes in storage and processing facilities in cooperation with major global grain businesses like Cargill. The intention is to gain access to major grains like wheat, soy and corns directly from producing areas in the two countries and take full responsibility of storing, processing and transporting them.

Amid the global rising grain prices, 90% of the global food market is completely dominated by major businesses like Cargill. As a countermeasure against the domination, aT had formed a consortium with STX, Hanjin and CJ to establish the Chicago-based grain distribution company last year.

Ha Young-je, CEO of aT visited the Siberia region in order to check the possibility of launching a new business there. Ha later signed a Memorandum of Understanding (MOU) in Brazil with Jaques Wagner, Governor of Bahia, for the establishment of a new grain firm.

aT chose Brazil and Russia because these two countries are the largest grain producers in the world.

South Korea will soon have access to a total of four million tonnes of grains (equivalent to 30% of its imports) by 2020, starting with bringing in 100,000 tonnes of soy and corns this year.