Olam, Mitsubishi form joint venture in Japan

by World Grain Staff
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SINGAPORE — Mitsubishi Corporation and Olam International Limited announced on April 15 the formation of a joint venture, Mitsubishi Agri Alliance Ltd (MCAA), in Japan. The new joint venture will import and distribute coffee, cocoa, sesame, edible nuts, spices, vegetable ingredients and tomato products in the Japanese market. Mitsubishi will hold 70% of the joint venture and Olam 30%.

The joint venture will draw on the combined strengths of both companies: Olam, for its global supply chain networks (agricultural production, origination, processing and trading) for sustainable agricultural products and food ingredients, and Mitsubishi, for its extensive distribution and sales network in Japan.

Consumers around the world are increasingly placing a premium on sustainable food products, particularly confectioneries and beverages. The establishment of MCAA enables Mitsubishi and Olam to expand their network for responsibly sourced raw materials and improves their system of distributing agricultural and food products in Japan and around the world. Through Olam’s sustainable global supply chains, MCAA can offer a range of innovative and high quality food products that will appeal to today’s Japanese consumers, Olam said.

Both joint venture partners will continue to focus on ensuring that existing customers remain their priority as the new joint venture works to broaden and deepen customer relationships in Japan. MCAA is targeting to commence operations by Oct. 1.

Olam is one of the leading players in the global market for coffee, cocoa, edible nuts and other agricultural and food raw materials, with a network of more than 4 million farmers, most of whom are smallholders. Its origination of sustainable and traceable products is underwritten by ongoing support to these farmers and certification for the products it delivers to the market.

In August 2015, Olam raised approximately S$915 million by issuing 332.73 million new ordinary shares to the Mitsubishi Corp. at S$2.75 per new share.

The transaction set the platform for a long-term strategic partnership between Olam and Mitsubishi Corp. Mitsubishi is Olam’s second largest shareholder with a 20% stake in Olam. Temasek Holdings remains Olam’s majority shareholder with a 51.4% stake.

Mitsubishi Living Essentials Group has developed a strong vertically integrated business model in Japan that engages in segments of the food business ranging from raw materials procurement to distribution and retail. Adding Olam’s wide ranging product portfolio and its sustainability and traceability track record to that platform creates a formidable partnership for procurement and delivery of food products and ingredients to consumers in Japan.

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