Mitsubishi Corporation

Press Room

June 24, 2014

Mitsubishi Corporation Strengthens Grain Procurement for Asian Market in Australia
Invests in Olam Grains Australia Pty Ltd; company to become consolidated subsidiary of Mitsubishi Corporation

Mitsubishi Corporation (MC) announces plans to acquire 80% of shares in Olam Grains Australia Pty Ltd (OGA), a wholly-owned subsidiary of Olam International Limited (OLAM). Through this acquisition, OGA becomes a consolidated subsidiary of MC, thereby enabling the company to expand its grain procurement business in Australia. OLAM will remain an investor in OGA with a 20% stake.
 
Based in Singapore, OLAM is a leading agri-business operating across the value chain in 65 countries, including African, Middle Eastern and Asian markets. OGA is OLAM’s grain supply chain company focused on the Australian market, and handles a total grain volume of over 1 million metric tons a year. OGA also has a 32.5% share in Newcastle Agri Terminal (NAT), Eastern Australia’s grain handling port.
 
The acquisition of OGA also signals MC’s first involvement in the terminal business in Australia. MC has been involved in the grain procurement business in Australia for decades through subsidiary feed company Riverina, but the acquisition of interests in an export terminal bolsters its capacity to forge a stronger and more stable procurement system in Australia’s competitive grain market.
 
Australia is one of the world’s largest wheat-producing countries and the largest exporter of wheat to the South East Asian market. The demand for flour-based products such as noodles, bread and other baked products, and in turn the demand for wheat, in South East Asia has been rising over the past several years due to the increase in population and economic growth, as well as the Westernization of eating habits. These trends are expected to continue, and given its geographic advantage, the demand for Australian wheat as a commodity targeting Asian markets holds much potential for stable growth.
 
Emerging markets have burgeoning middle classes, resulting in increased demand for daily living essentials such as food products. MC has therefore been establishing solid partnerships with Japanese and global enterprises in countries such as Indonesia to strengthen supply-chains for living essentials businesses in an effort to meet that demand. This new investment will contribute to securing a stable supply of food products with a view to adequately meeting the needs of consumers in those rapidly growing markets.
 
Recent developments in MC’s grains business (2013-2014)
Newcastle Agri Terminal
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Olam International Limited
1. Head office:                   Singapore
2. Year established:           1989
3. Business Activities:       
Agri-business operation across the value chain in 65 countries,supplying various products across 16 platforms to over 13,600 customers worldwide; mainly handles agri products trading and processing businesses with upstream investments in selected locations
4. No. of employees:         22,638
 
Olam Grain Australia Pty Ltd.
1. Head office:                   Melbourne, Victoria, Australia
2. Year established:           Feb 2014
3. Business Activities:        Storage, logistics, trading and marketing of grain Newcastle Agri Terminal management (share ratio 32.5%)
4. No. of employees:         12
 
Mitsubishi Corporation
1. Head office:                   3-1, Marunouchi 2 Chome, Chiyoda-ku, Tokyo, 100-8086 Japan
2. Business:                      
MC has six business groups which develop operation in the Diverse field of Industrial finance, Logistics & Development; Energy; Metals; Machinery; Chemicals; and Living Essentials. In addition to these business groups, MC has recently established its business service group and Global Environment & Infrastructure business.
3. Representative:             Ken Kobayashi, President and CEO
4. Year established:           1954
5. No. of employees:         68,383 (consolidated, as of March 31, 2014)
 

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