April 13, 2010

Sumitomo to acquire Viterra JV for US$54 million

Japan's Sumitomo Corp plans to wholly acquire its joint venture in Australia with the Canadian grain giant Viterra Inc for JPY5 billion (US$54 million).

Sumitomo plans to buy the half of Australian Bulk Alliance (ABA) held by its partner and turn it into a wholly owned unit later this month.

ABA operates a grain terminal at the Port of Melbourne in addition to eight storage sites in the states of Victoria and New South Wales and has an annual export capacity of about two million tonnes.

Sumitomo, which currently handles about 300,000 tonnes of grain exports from Australia every year, has been stepping up export operations in the region, positioning ABA as the core unit of its logistics operations.

The company mainly ships Australian grain to Japan, but intends to increase exports to markets where demand is expected to grow, including China and Southeast Asia.