AMSTERDAM, NETHERLANDS — COFCO Corp. and Nidera on March 23 signed an agreement in which COFCO will acquire 51% of Nidera and establish a strategic cooperation.

The signing of the largest ever strategic cooperation by agricultural enterprises from the two countries was conducted during Chinese President Xi Jinping’s first official visit to the Netherlands, becoming the symbol of an in-depth Sino-Dutch achievement in the agricultural industry as well as a new driving force in promoting bilateral trade and economic development between the two countries.

The cooperation is the largest ever international acquisition in the history of the Chinese agricultural industry. COFCO and Nidera will establish channels to share market information and initiate cooperation in areas such as seed business. 

Nidera was founded in Rotterdam, the Netherlands in 1920, and has since developed into a major international agribusiness and trading company with an annual turnover in excess of $17 billion, trade volume over 52 million tonnes, origination purchase volume over 11 million tonnes and agri-technological product sales over 954,000 tonnes. 

Soybean, wheat and corn are the major commodities traded by Nidera. With an advanced germplasm pool, Nidera has developed a close partnership with farmers through providing seed, fertilizer and farm chemicals. By December 2013, Nidera had 62 subsidiaries, and more than 3,700 employees in over 18 major exporting and importing countries.

Nidera said it has made consistent efforts to establish and improve its storage and logistic network in key global grain production areas in North and South America, actively promoting development of its grain and oilseeds, seeds, fertilizers and farm chemicals businesses. Nidera has a comprehensive storage and logistics network in Argentina, Brazil, Uruguay and other South American regions. It has inland storage capacity of 1.27 million tonnes, of which 477,000 tonnes is in Argentina and 587,000 tonnes is in Brazil; annual throughput capacity of 13.53 million tonnes, of which 5.5 million tonnes is in Argentina and 3.03 million tonnes is in Brazil. Its storage and logistics facilities also cover North American and European areas such as the U.S., Britain, Spain, Romania, Russia and Ukraine. 

As China's leading agricultural products and foodstuff company, COFCO, with its 60-year history and a fully-integrated value chain model, has built China's largest food logistics network by its wide coverage and nationwide layout of domestic storage and logistics nodes. It has also established all types of processing facilities in China’s key agricultural areas and sales area, with sales outlets penetrating China's cities and villages.

Currently, the basic pattern of global agricultural trade flow is from the Americas into Asia, and the supply from emerging markets has been growing rapidly. Brazil and Argentina takes more account in exporting markets of agriculture products such as soybean and corn. COFCO enjoys a long history of cooperation with Nidera, importing agriculture products from Argentina since the beginning of the sixties of last century, and have continued to maintain sound business partnership which forms an solid foundation of COFCO's overseas grain trade network. 

The investment into Nidera enables COFCO to extend its value chain overseas, to access the core of the world's grain market value chain, and also opened up the Chinese market opportunities to Nidera from COFCO's domestic network of grain warehousing, logistics, processing and sales.

Nidera Chief Executive Officer Ton van der Laan said he is very confident in this collaboration and that Nidera values the huge market size and growth potential in China and Asia, and COFCO's fully-integrated value chain model is a great attraction. 

Frank Ning, chairman of COFCO has indicated that the investment in Nidera will enhance COFCO’s global presence in grain storage, logistic and processing facilities, facilitate the establishment of a global value chain, the synergy associated with the consolidation of COFCO and Nidera will establish a stable grain corridor linking the global biggest grain origination markets and Asian emerging markets with the largest growing demand of grain. With the establishment of an international operating network, “purchase globally, sell globally” will be achieved which can not only meet China’s demand on moderate grain importation, but also promote a more effective operation of international grain network and global development of global agricultural industry via actively conducting  third-country trade.