Marubeni’s purchase of U.S.-based Gavilon last year made it the largest grain supplier to China, however COFCO’s move to acquire two overseas grains operations in a week’s time may limit Marubeni’s expansion into China’s growing market. Marubeni spent $3.6 billion to buy Gavilon in order to merge the U.S-based company’s vast storage network with its own exporting capabilities in Asia. The combined operation now sells 15-16 million tons of soybeans to China. The deal was faced with unexpected regulatory and market issues causing the deal to take longer to complete than anticipated. On February 28th COFCO agreed to buy a majority stake in Nidera and is currently in talks to buy the agribusiness arm of Noble Group. If the deals are completed, they will give state-owned COFCO greater leverage in pricing, market intelligence, supply and logistics. The deal with Noble will also place COFCO in direct competition with Marubeni in South America where Nobel has soybean crushing facilities and will gain CFCO more leverage in corn as well. In 2013 Marubeni bought one quarter of Brazil’s soybeans and is looking to sell Brazilian corn to China. Once COFCO has established a stable and extensive sales network it is believed the company will look to acquire production assets in the near future.
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