January 18, 2012


Marubeni, New Hope to launch joint ventures


A joint venture in the Middle East, Africa and other emerging markets is being launched by Japan's Marubeni Corp. and China's New Hope Group.


Those regions are increasing imports of grains, which are used mostly for animal feed. Marubeni hopes to tap demand in the growing markets by working with China's top producer.


As a first step, they plan to start joint production of animal feed in Egypt and South Africa starting in fiscal 2013.


The trading house will also build and purchase port facilities to accept grains, with plans to have businesses up and running in seven nations in the Middle East and Africa by fiscal 2015.


Its investments will likely total JPY30 billion (US$391 million) over the next three years.


In China, Marubeni and New Hope are part of a three-way joint venture that also includes an oil and fats unit of Sino Grain Reserves Corp. The three firms are poised to start producing formula feed there together as early as this year, with an eye toward building more than 10 feed factories. New Hope's feed output came to about 13 million tonnes in 2010.


African imports of grain exceeded 54 million tonnes in 2008, according to Japan's Agriculture Ministry - the highest in the world. The figure is projected to top 80 million tonnes in 2020. The Middle East's grain imports are forecast to reach 57 million tonnes that year.


With the expanded partnership, Marubeni hopes to increase the volume of grains it handles from a projected 22 million tonnes this fiscal year to 30 million tonnes in fiscal 2015, putting the Japanese trading house among the global leaders.