Japan’s third largest trading company, Itochu Corp. is partnering with Thai agricultural group Charoen Pokphand to increase food supply in Asia. The two companies will participate in cross shareholding where Itochu will buy a US$852 million stake in CP Pokphand and CP will in turn buy a US$1 billion worth of Itochu stock. The agreement will cut the cost of buying raw materials for the two companies, reduce asset operational costs, and boost sales. CP Pokphand is looking to expand into food products such as meat and ready-to-eat meals, and the partnership is planning to look into investing in grain elevators and animal feed. Itochu will be adding to its food empire which accounted for 22% of its net income for the year ending March 31 which includes convenience store operator Family Mart Co., cooking oil producer Fuji Oil Co., wholesaler Nippon Access Inc., and joint investments in Chinese and Thai food processer Ting Hsin. In addition, in 2013 Itochu acquired Dole Foods Co.’s Asian fruit and vegetable business and global canned food unit for US$1.3 billion. CP Pokphand is Thailand’s biggest agricultural group producing piglets, animal feed, broiler chicks, ducklings, shrimp, and fish.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free weekly enhanced eNews service