November 13, 2007

Japan's Mitsui buys Brazilian farm for US$63.6 million

Japanese company Mitsui & Co.has purchased a 25-percent stake in a Brazilian farmland operator to secure a stable source of soy and other agricultural products, The Nikkei reported in its Tuesday morning edition (November 13, 2007).

The move marks the first time that a Japanese trading house has directly invested in farmland operations, except for a short period of time after World War II.

Mitsui acquired the stake in XinguAgri farms for around Y7 billion (US$63.6 million) from Brazilian grain handler PMG Trading SA. US food company CHS Inc. also bought a 37.5 percent interest.

With some 100,000 hectares of farmland in Brazil, these operations produce 110,000 tonnes of soy a year, representing nearly 3 percent of Japan's annual consumption of the legume. The farming concern will tap Mitsui's know-how to strengthen its logistics network and export soy and other products to such markets as Japan, China and Europe.

Mitsui already operates grain exporting sites in Brazil with PMG and CHS. Obtaining the farming stake is part of Mitsui's plans to invest by fiscal 2010 roughly Y80 billion (US$727 million) to secure such food sources as grains, dairy products and seafood.

Mitsui is considered one of the largest corporate conglomerates in Japan and one of the largest publicly traded companies in the world. With a total of 160 offices in 68 countries around the globe, the company's main businesses include sales, manufacture, export/import, international trade and services.