Australia’s GrainCorp has planned to invest more than $30 million in a 50-50 joint venture with Japan’s Zen-Noh Grain Corporation to enter into North American market.
GrainCorp already runs two container loading sites in Calgary, Alberta, from where it will start operating after joint investment in the grain supply management field with Japan. The partnership aims at enhancing the company’s access to grain procurement. Through the joint venture, the companies will ensure proper receipt of grains to sites across Alberta and Saskatchewan that will form the vital parts of the grain supply chain.
The investment will help increase GrainCorp’s capacity to export grain to Japan and Asia, along with other global markets including the Middle East. The grain supplier will spend C$30 million (approx. AU$30.3 million), gathered from cash and debt facilities. This amount will be spent on construction and commission of the sites. On the other hand, the partner companies will loan an extra C$60 million (approx. AU$60.7 million) from financial institutions.
The construction of the project will commence in 2016 and continue until the end of 2018.
GrainCorp chief executive Mark Palmquist said that the project will influence the existing Canadian businesses of the company, including Canadian Malting Company and Calgary’s marketing office. He added that the joint venture will help attract the customer base of Japan’s grain supply ace and help export grain products from North America to Japan and other nations.
“This is an exciting opportunity to partner with one of the world’s most respected agricultural organisations and deepen our relationships with our international customers by growing our grain origination capability,” Palmquist said in a statement.
The CEO also said that the company’s access to Western Prairie grain and oilseeds will provide a better export demand and facilities. “It is really about being able to perform at the level necessary to stay relevant to your international customers,” he said. “Having multiple supply chains from different geographical areas is part of that responsibility you have to that international customer.”