OREANDA-NEWS. Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President: Kuniharu Nakamura)  signed a contract to acquire 40% of the shares of Xiwang International Trade Co., Ltd. (Head Office: Shandong; Representative: Wang Di), which imports and sells feed grains (such as barley and sorghum), in China.

In line with the westernization of diets and increasing incomes, demand for meat, especially pork and chicken, has been expanding in China, leading to recent dramatic increases in the amount of feed grains imported to the country. To meet this rapidly growing demand, Sumitomo Corporation will draw upon its long accumulated know-how to import feed grains to China and utilize the sales network established for feed ingredients including corn byproducts manufactured by Xiwang Food, Xiwang Sugar and other affiliates of Xiwang Group (parent company of Xiwang International Trade).

Xiwang Group and Sumitomo Corporation concluded a strategic comprehensive agreement* on September 24, 2015, and the investment in Xiwang International Trade by Sumitomo Corporation is the first project to be implemented under this agreement. In the future, Sumitomo Corporation will work to implement business projects also in fields other than feed grains in cooperation with Xiwang Foodstuffs and Xiwang Sugar, such as developing the vegetable oil business in response to increased trends for health promotion in China. Xiwang Foodstuffs is the largest manufacturer and seller of corn oil in China. Sumitomo Corporation will conduct examinations to launch a new business by organically fusing the Xiwang Group’s strong brand power and nation-wide sales network with Sumitomo Corporation’s overseas procurement foundation and business management know-how.

In addition, Sumitomo Corporation plans to invest in a business to manufacture, import/export and sell animal drugs (mainly animal vaccines) and feed additives in Shandong, for which the company is building up relationships with pig and poultry farmers in China. By deploying the expertise and findings gained through this process, Sumitomo Corporation will exert its integrated corporate strength to foster cooperation and partnership among multiple organizations related to the Chinese feed and livestock industries, which will in turn provide the company with the momentum to promote the growth strategies upheld in its medium-term management plan, BBBO2017.