ITOCHU Takes Stake in Agricultural Produce Trading Company in Northeastern China
November 6, 2009
ITOCHU (China) Holding Co., Ltd. (hereinafter, "ITOCHU (China) Holding") has agreed to take an equity stake of 10% in Beidahuang Xinya Economic and Trade Co., Ltd. (hereinafter, "Beidahuang Xinya Economic and Trade"), a company that trades in agricultural produce in Heilongjiang Province.
ITOCHU Corporation (hereinafter "ITOCHU") has long sold agricultural produce (primarily soybeans, corns and rice) from northeastern China to the Japanese and Chinese markets. In recent years, ITOCHU has been developing new businesses jointly with the General Administration of Agriculture Land Development of Heilongjiang Province.
In China, demand for high value-added foods is rising in step with higher income levels, and the significance of polices for production areas is growing, partly because of a surge in interest in food safety and security triggered by recent food poisoning problems.
Based on capital participation in Beidahuang Xinya Economic and Trade, ITOCHU will introduce its expertise in areas such as new cultivation techniques, food safety, and security measures to farms under the General Administration of Agriculture Land Development through the Beidahuang Group in Heilongjiang Province, a major center for the supply of agricultural products in China. In doing so, ITOCHU seeks to construct a system enabling the reliable supply of safe and secure foods in the Chinese market.
ITOCHU is developing a Strategic Integrated System (SIS), which aims to construct a global value chain. It positions the business announced today as part of its initiatives to establish an upstream system for the supply of food resources.
ITOCHU believes that this business will make a significant contribution to the construction of a global value chain, enabling the reliable supply of farm produce such as soybeans and rice and providing safety and assurance to customers in China, the world’s most populous market.
Overview of Beidahuang Xinya Economic and Trade
Name | Beidahuang Xinya Economic and Trade Co., Ltd. |
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Business | Trading in agricultural products, trading in fertilizers and agricultural materials and machines, and storage and processing of agricultural products |
Established | September 4, 2008 |
Capital | 50,000,000 yuan (approximately 7 million dollars) |
Ownership structure (current) | Beidahuang Agriculture Co., Ltd. 100% |
Head office | Harbin-city, Heilongjiang Province, China |
Suppliers | 16 farms under Beidahuang Agriculture and neighboring farms and manufacturing companies |
Purchasers | Manufacturing and retail companies in China and elsewhere |
Profile of Beidahuang Agriculture
Business | Management of 16 of 115 farms in the General Administration of Agriculture Land Development = the Heilongjiang Group and the management of related agricultural companies |
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Established | November 1998 |
Capital | 1,470 million yuan |
Ownership structure | 70%: Heilongjiang Beidahuang Agricultural Holding Corporation (state shares) 30%: General circulating shares 4.8 billion shares |
Head office | Harbin-city, Heilongjiang Province, China |
Affiliates | Manufacture of fertilizers and malt, rice-related businesses, paper manufacture |