China to overhaul agriculture giants
CHINA is planning to overhaul its mammoth state agriculture companies, transferring the trading assets of stockpiler Sinograin to food giant Cofco Corp., according to people with knowledge of the plan.
The restructuring would be implemented in several stages and would also include Cofco taking over oilseed crushing capacity from Sinograin, said the sources, who asked not to be identified. The details of the plan are subject to change, they said. The Chinese government aims to complete the restructuring by the end of next year,.
The revamp of the biggest state companies in China, the world’s top consumer and importer of farm products, will be felt throughout global agricultural markets. It would take Cofco closer to its goal of rivalling the storied “ABCD” group of international commodity powerhouses that dominate flows of agricultural products, while extending its ability to secure food supplies for the world’s most populous country.
While Cofco’s duty is to keep China’s population fed, Sinograin’s role is more blurred. It imports soya beans and soyoil for state reserves but it also has commercial oilseeds crushing and refining capacity that makes it the fifth biggest player in China, according to its website.
Transferring Sinograin’s crushing capacity would make Cofco China’s biggest crusher of soya beans, according to data from China National Grain and Oils Information Centre.
The State-owned Assets Supervision and Administration Commission, an arm of the Chinese government overseeing the biggest government enterprises, didn’t respond to a fax seeking comment. Representatives at Cofco and Sinograin also didn’t reply to a fax and email inquiry.
The overhaul would also dovetail with President Xi Jinping’s drive to reform China’s sprawling and inefficient state-owned enterprises, which account for almost half of the nation’s industrial assets. Steel, power and chemicals companies are among those already targeted in the restructuring programme, with a long-mooted mega merger of China National Chemical Corp and Sinochem Group now said to be close. – Bloomberg