COFCO plans to expand global logistics system

BEIJING - China National Cereals, Oil and Foodstuffs Corp (COFCO), the largest State-owned agricultural conglomerate, has made steady progress in its overseas investment, said Chairman of the Board Frank Ning.

COFCO plans to build up its global logistics and processing systems next year, handling products such as corn, soybeans, rapeseed oil, sugar and wheat, Ning said.

"Some deals are now being negotiated. We will invest wherever it is necessary," Ning said, suggesting the total amount could be huge. "We have laid the groundwork for expansion," he said, without giving further details.

In November, COFCO announced plans to invest overseas through mergers and acquisitions over the next five years. The company will focus on a number of foreign markets including the United States, Australia and Southeast Asia, said Jiang Hua, a board member.

Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd, a major agricultural consultancy, said now was a good time for foreign acquisitions.

As developed countries are struggling with a sluggish economic recovery, Chinese companies could make acquisitions more cheaply, Ma said.

"Overseas expansion will make COFCO more competitive in the global food industry," he added.

With COFCO's overseas network, China's processing companies could import agricultural products at lower prices, Ma added.