Cofco Corp., China’s largest food company, joined forces with the country’s $650 billion sovereign wealth fund to create a global grain trading house.
Cofco and China Investment Corp. set up a joint venture named Cofco International as a “platform for international agriculture investment,” the food company said Thursday in a statement. Cofco owns 80.1 percent and CIC the rest, it said, without giving financial details.
The partnership will help Cofco to integrate the trading businesses it acquired last year, when it snapped up 51 percent stakes in Noble Group Ltd.’s grain arm and the Netherlands’ Nidera BV. The acquisitions, giving Cofco large operations in Latin America and eastern Europe, will allow the state-owned company to compete with the biggest grain suppliers.
Cofco announced this week it had poached Matthew Jansen, a senior executive from U.S. competitor Archer-Daniels-Midland Co., to lead its push into global grain trading. The company will go up against ADM, Bunge Ltd., Cargill Inc. and Louis Dreyfus Commodities BV to supply world markets while securing products for China as rising incomes drive up food demand.