Japan's Marubeni ties up with ITC

Food business alliance to also formalise existing linkages relating to soya trade.

Marubeni Corp, Japan's third-largest trading company with revenues of $27 billion, inked a food business alliance with the international business division (IBD) of tobacco and cigarette industry leader ITC Ltd.

According to a report filed by Bloomberg earlier in the day, Marubeni said in an emailed statement it expected the tie-up to strengthen its foothold in India.

S Sivakumar, chief executive of the IBD, said the two would explore joint marketing of agri-products from India in Asian markets, to build on the existing relationship between ITC and Marubeni.

In addition, Japan had opened up its market for imported mangoes in 2006 and ITC was keen to get into it as a major player.

The reserve flow of goods would include imported vegetable oil and pulses, he indicated.

The CEO indicated that Marubeni's considerable expertise in warehousing and logistics would be absorbed to upgrade the ITC e-choupal trading and supply chain system.

ITC-IBD was India's second-largest exporter of agri-products with exports of over Rs 700 crore. Its export focus areas included feed ingredients like soyameal, basmati and non-basmati rice, wheat, pulses, coffee, black pepper, sesame seeds, groundnuts, castor oil, marine products like shrimps and prawns and processed fruit products based on mango, papaya and guava.

Sources indicated that the alliance would formalise the existing linkages between ITC and the Japanese major relating to trade in soyabean.

The IBD arm of ITC was already the first-choice supply chain partner of several leading international customers like Cargill, Marubeni and Toepfer and this relationship would be strengthened through this alliance, the sources added. It sourced agriculture commodities and food products from India.

The Marubeni alliance was expected to work closely with the feed ingredients group of of ITC-IBD, which mainly procures, processes and exports de-oiled cakes and extractions for the feed industry.

Soyabean meal constituted the largest component of its product range. IBD has 11 units for soyabean processing in the soya heartland of Madhya Pradesh, with a processing capacity of 4,000 tonnes per day.

The IBD of ITC had extensive backward linkages with farmers through its cost-effective procurement system that web-enabled farmers using its unique "e-choupal" busines model.