June 2, 2009

Itochu Corporation will join with a major US agribusiness and a South Korean shipping firm to construct one of the world's largest grain export facilities on the US West Coast, The Nikkei reported in its Tuesday (June 2) morning edition.

The overall cost of the project is estimated at just over US$200 million, or about Y19 billion. The firms aim to boost procurement of such grains as wheat and soy in the US to meet the sharp growth in demand in China and other parts of Asia.

The major Japanese trading house is partnering with third-ranked American grain giant Bunge Ltd., which has annual sales of about US$52.6 billion, and South Korea's largest shipping company, STX Pan Ocean Co.

The trio plans to establish a joint venture in Portland, Oregon, sometime this month. This firm is to be 51 percent-owned by Bunge, while Itochu takes a 29 percent stake and STX the remaining 20 percent.

Construction of the grain export facility is to start this month in Longview, Washington. It is expected to have an annual processing capacity of 8 million metric tonnes when it starts operations in the fall of 2011.

Itochu's move to secure a means for supplying grains to Asia is part of its food strategy for China that includes the creation of a network that will cover food processing, distribution and restaurants.