January 15, 2014

China's COFCO pursues minority stake in Netherlands' Nidera

China National Cereals, Oils and Foodstuffs Corporation (COFCO) is offering to buy a minority stake in Dutch grain trader, Nidera, Wall Street Journal reported.

The report states that in December 2013, COFCO submitted a binding bid for the stake, which is valued at about US$250 million. However, it is unclear how much COFCO has offered, while the terms of the deal are still being discussed.

COFCO bought Australian sugar producer, Tully Sugar Ltd, for about US$145 million in 2011, and has purchased vineyards in Chile and France. The latest move by the state-owned company signals China's stepped-up effort to secure food resources.

Nidera employees 3,800 people in 20 countries, and deals grain trade around the world, including the Netherlands, where the company is based, Germany, England, Russia, Argentina, and South and South-East Asia. 

A tainted record in food safety and increase in incomes of the population are driving demand for high-quality food in China. The most populous country has seen the gap between imports and exports of grain widening in recent years, while consumers' tastes are changing with the imports of foreign food products.