Mar. 08, 2010
Sumitomo Corporation enters into Grain accumulation business in Australia
Sumitomo Corporation (Headquarters: Tokyo, Japan, President: Susumu Kato, hereinafter “Sumitomo”) has acquired 50% equity stake in Australian based grain company Emerald Group Australia Pty Ltd (Headquarters: Melbourne, Australia, Chairman: Alan Winney, hereinafter “Emerald”) and would enter into grain accumulation business in Australia.
Emerald is a privately owned independent grain accumulation company, established in 2004, growing fast in the recent deregulation in Australian grain industry. It focuses as an originator of various grains, such as wheat, barley, canola etc., with a strong relationship with the Australian grain growers, and operates between the farm gate and FOB position. Emerald aims to achieve an annual marketing volume of 5 million tones of grain within the next 5 years, equivalent to approx.15% of the annual Australian grain crop.
Australia, one of the major grain producing country that produces more than 30 million tones of grain annually, is also respected as one of the most important grain exporting countries in the world. With its quality and favorable geographic condition locating close to the emerging markets, Australian grain is exported mainly to Asian countries and to Middle East. Its quality is highly accepted by Japanese flour mills for the use for high quality noodle as well.
Sumitomo having invested in a grain storage and export terminal operations in Australia, by entering into the accumulation business through Emerald, it will be the only Japanese firm to form a value-chain from the farm gate to destination.
Demand for grain in Asia is increasing from its population growth and change in the diet, not only for wheat(usage for noodle, bakery, confectionary etc.), but for edible oil demand (Soy, Canola etc.) and for Feed demand(Corn, Barley etc.) as well.
To meet with such demand, Sumitomo have strategically formed a stable supply chain in Australia, and will enlarge its export operation to Asian and to Middle Eastern markets.
In Asia, Sumitomo has entered a strategic partnership with one of the largest flour mill /food group in Asia, Singapore based Prima Limited in 2006. Together, it has invested in flour mill operation in China. Like-wise, Sumitomo will seek to expand its down stream business opportunities in Asian countries as well as strengthening its up stream business value chain.