BEIJING, CHINA — During his visit to Brazil, Vice-Premier of the State Council Wang Yang took a special trip to the Port of Santos on June 27 to inspect COFCO Group’s investment projects and hear a report delivered by COFCO Group chairman Ning Gaoning on the company’s “going global” drive and business model.

Wang fully acknowledges COFCO’s “going global” drive and hopes that COFCO shall do a good job in consolidating and establishing its overseas supply chain. He also expects to lend more support to COFCO for its future growth.
At a forum on Chinese-owned enterprises with operations in Brazil held in Sao Paulo, June 27, Wang was debriefed by Ning Gaoning on COFCO Group’s development in Brazil. In his concluding remark, Wang commented that the investment cooperation between China and Brazil has been on the “fast track.”

Since the economies of China and Brazil are highly complementary, the two countries enjoy broad prospect in their cooperation on production capacity, infrastructure construction, agriculture and energy. The related government departments should actively support the development of Chinese enterprises in Brazil, expedite the implementation of policies to assist enterprises in obtaining financing and try to improve services for enterprises, he said. On the other hand, the enterprises should have long-term strategies to open up new prospects, keep forging ahead to build awareness of creating premium products and dutifully perform their social responsibilities so as to achieve win-win results for both China and Brazil.

After the forum, Wang and his delegation drove to Santos, the largest port in South America, to inspect T12A and Cerealsul wharves that COFCO has invested in.

At Santos, Wang toured an exhibition of COFCO’s model of developing a fully integrated value chain, its global presence and its investment projects in Brazil while being briefed by Ning Gaoning on COFCO’s business model of “buying globally and selling globally” and its progress in going global.

According to Ning Gaoning, everything from upstream planting all the way down to processing in the core value chain of global grain and oils industry ultimately hinges on large-scale wharves, which serve as logistic hubs to form a sound business model. As one of the most important distribution centers in the global grain trade, Brazil’s Santos Port sees considerable flux of agricultural products between eastern and western hemispheres. COFCO’s T12A and Cerealsul wharves serve as a major link in this global agricultural product value chain.

Wang expressed his great support for COFCO Group’s “going global” drive, its utilization of two markets and two kinds of resources, as well as its establishment of a global grain network. He traveled all the way to Santos Port to take a look at the actual condition of COFCO’s overseas development and check whether COFCO can see a better growth prospect in the future.

He fully acknowledged the latest development of COFCO, noting that “COFCO’s presence in the international market and in Brazil has taken quite a shape. Although the wharves and warehouses at Santos Port only account for a small portion of COFCO’s overseas assets, it is good enough for COFCO to have a niche at Santos, where international grain traders gather.”

Wang not only highlighted the difficulty of going global to acquire overseas enterprises but also pointed out that it is even more difficult to effectively manage and integrate the acquired assets so as to form synergy. He said he hopes that COFCO will play a greater role in ensuring China’s food security by building its overseas supply chain as well as its competitiveness through sound management based on the present foundation. He also assured COFCO of his continuous support for its future development.

Wang and his delegation took a boat tour to get a full view of Santos and to make an on-the-spot investigation of T12A and Cerealsul wharves. While aboard the boat, Wang talked with COFCO Group President Yu Xubo, COFCO International senior vice-president Yang Hong, Brazil- and Argentina-based management teams of Nidera and Noble Agri, in which COFCO has controlling stakes and some employees.

Matt Jansen, who has become the newly-appointed chief executive officer of COFCO Noble Agri, was introduced by Ning Gaoning to Wang, who on behalf of the Chinese government welcomed him to COFCO’s management team.

With a total of almost $5 billion invested in Brazil, COFCO mainly engages in soybean and corn business and owns two soybean oil pressing mills, four sugar mills, one transit station, two wharves and 12 silos. In Brazil, COFCO’s operating volume in grains and oilseeds exceeds 8 million tonnes with its total grain source standing at 7.4 million tonnes, warehousing capacity at 1.81 million tonnes and port transit capacity at 5.73 million tonnes. Its soybean and corn seeds business takes the lead in South America, accounting for 14% of Brazil’s market share.

T12A and Cerealsul wharves, which are located at Brazil’s Santos Port, serve as a major logistic port for COFCO’s agri-product business in Brazil. With an annual transit capacity of over 3 million tonnes, T12A is mainly used to export agri-products such as soybean, sugar and feedstuff.

Through T12A, COFCO exports agri-products to major sales regions including China, Europe and the Middle East. As a wharf designed to import wheat, Cerealsul has an annual transit capacity of 500,000 tonnes. It not only realizes unmanned handling of goods from arrival, storage to loading through fully-automatic programmed management but also provides its clients with business intelligence services.