The Hindu Business Line : ITC-Marubeni pact seen as new trend in commodities trading

Growth driver
To strengthen India's credentials as an emerging agri-commodities sourcing hub for global companies
To substantially strengthen ITC's agribusiness supply chain, especially in the context of the ramped up e-choupal programme
Likely to give a major fillip to the company's agri business exports to Japan and other Asian countries

Kolkata , Dec. 26

At a time when corporate India is witnessing global acquisitions by Indian companies, ITC's marketing alliance with $28-billion `Sogososha' (Japanese for a giant global trading firm) Marubeni Corporation of Japan, sealed by way of a MoU signed recently, is seen as yet another new trend in international commodities trading by India Inc.

Talking to Business Line from his office in Hyderabad on Tuesday, Mr S. Sivakumar, Divisional CEO, Agri Business, ITC, tended to agree with this view, which would only strengthen India's credentials as an emerging agri-commodities sourcing hub for global companies.

Mr Sivakumar said the comprehensive joint marketing arrangement with Marubeni had identified some ten areas of cooperation for leveraging the in-house competencies and synergies of both the companies. Some of these areas are export of products like soyabean meal, maize, grain etc, import of vegetable oils and pulses and bulk handling and logistics. The plan is to gradually move to processed foods.

Feasibility study

Hinting that there is scope for making the agreement more broad-based, he said both companies expected to benefit once the agreement becomes fully operational in all respects. This will happen when a feasibility study is completed.

Marubeni, a Fortune 500 MNC ranked 24th in the Forbes List, deals in a number of items besides foods, like chemicals, textiles, ferrous & non-ferrous items, iron ore, machinery etc.

Mr Sivakumar felt the combined synergies would also substantially strengthen ITC's agribusiness supply chain, especially in the context of the ramped up e-choupal programme. At a later stage, the two companies may be working on introduction of food-processing equipment and also jointly build grain storage facilities.

Not willing to put any numbers at the moment, as the tie-up would still have to be carried forward by way of a detailed study involving all the identified areas of cooperation, he said in the short term, it was expected to give a major fillip to ITC's agri business exports to Japan and other Asian countries.

Marubeni, he felt, would also be seeking a major presence in India, perhaps envisaging substantial investments at some later stage.

ITC's agri-marketing expertise, sharpened through the e-choupal programme, now facilitates the origin of food items like wheat, soyameal, maize, etc. to be traced back to individual farmers, and this, Mr Sivakumar felt, would help effectively address the Sanitary and Phyto Sanitary) measures which address the food safety concerns of global end customers.