OREANDA-NEWS. December 18, 2012. Mitsui Sugar Co., Ltd. ("Mitsui Sugar," headquarters: Chuo-ku, Tokyo, President and CEO: Masaaki Iida) and Mitsui & Co., Ltd. ("Mitsui & Co.," headquarters: Chiyoda-ku, Tokyo, President and CEO: Masami Iijima) have agreed to underwrite a third party share issue to be implemented in Thailand by Khonburi Sugar Public Company Limited ("Khonburi") and to acquire share subscription rights. Khonburi is involved in sugar production and electric power generation in Thailand. The companies have signed an agreement to this effect ("the Agreement"). Under the Agreement, Mitsui & Co. will invest 770 million baht (approximately Ґ1,990 million) and Mitsui Sugar will invest 380 million baht (approximately Ґ1,000 million) to acquire shareholdings of 11.1% and 5.6% respectively in Khonburi.

Khonburi has manufacturing facilities in Nakhon Ratchasima Province in northeastern Thailand. Each year it produces 250,000 to 300,000 tons of sugar from 2.5 to 3.0 million tons of sugarcane. In addition to supplying high-quality sugar products to major food and beverage manufacturers and other users in Thailand, it also exports its products, especially to neighboring countries. Khonburi is also contributing to regional power self-sufficiency. It uses sugarcane residue (bagasse) as fuel to generate electric power to meet the needs of its own plant and sells surplus electricity to electric power authorities.

In addition to the Agreement , Mitsui Sugar, Mitsui & Co. and Khonburi have also signed a strategic alliance agreement. Mitsui Sugar and Mitsui & Co. have been involved in the Thai sugar manufacturing business for around 50 years as major shareholders in The Kumphawapi Sugar Co., Ltd. and Kaset Phol Sugar Ltd., which are both leading Thai sugar manufacturers. Experience and expertise accumulated through this activity will be used to contribute to the growth of Khonburi, which will produce high-quality refined sugar using technology provided by Mitsui Sugar. Mitsui & Co. will use its networks to provide marketing support. The aim is to expand the scale of the company's operations and build a powerful sugar manufacturing group.

World sugar demand is expected to expand in step with the growth of emerging economies and population expansion. However, only a few countries, such as Brazil, Thailand and Australia, have surpluses that can be exported. As the world's second biggest sugar exporting country, Thailand enjoys a geographical advantage because of its location in Asia, which is a major consumption market. It is expected to grow into one of the most important centers for the global sugar trade. Mitsui Sugar and Mitsui & Co. will use their investment in and strategic alliance with Khonburi to achieve further expansion of their sugar business overseas.