Bloomberg reports that China has kicked off a long-anticipated overhaul of its massive state-owned agriculture companies to help secure food supply for the world’s most populous nation.
Food giant Cofco Corp. and national stockpiler China Grain Reserves Group, also known as Sinograin, will set up two joint ventures. The first is a grain storage business to be controlled by Sinograin, and the second for oilseed crushing and processing will be managed by Cofco.
The move will play to the strengths of the respective firms and contribute to China’s broader goal of improving food security, according to a government statement late Thursday.
The revamp has been considered since at least 2019 and is part of President Xi Jinping’s drive to streamline industrial capacity among state-owned companies.
It will take Cofco closer to its ambition of rivaling the storied ‘ABCD’ group of international commodity traders who dominate flows of agricultural products – Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc. and Louis Dreyfus Co.