State agro-trade firm inks deal on global grain firm

SEOUL, April 25 (Yonhap) -- South Korea's state-run agricultural trading company signed Monday an investment deal with three local firms to launch an international grain procurer to be charged with securing a steady supply of staple farm produce.
The Korea Agro-Fisheries Trade Corp. and the central government have been pushing for a new company since 2010 to better insulate the country from sudden fluctuations in grain prices that can adversely affect domestic production and inflation.
The public corporation said it will shoulder 55 percent of the initial investment worth US$25 million with Samsung C&T Corp., Hanjin Transportation Co. and STX to foot 15 percent each.
"The grain procurement company will officially be launched on Friday in Chicago with wheat, corn and beans to be bought from U.S. producers and brought into the country," it said.
For 2011, the envisioned company will try to import around 10,000 tons of beans and corn, with the numbers to go up to 2.15 million tons by 2015, the state-run firm said. The company also seeks to expand into untapped grain-producing regions such as Brazil and eastern Russia.
The agro-fisheries corporation will take charge of overall management of the procurement company, with Samsung to focus on marketing and sales. STX will handle maritime transportation with Hanjin to deal with overland movement of grain.
Company executives, meanwhile, stressed that the new company does not plan to compete with such major grain handlers as Cargill and ADM, but is seeking cooperative tie-ups that can benefit all sides.
These large multinationals effectively control the bulk of South Korea's grain imports.
South Korea needs an average of 20 million tons of grain, such as rice, wheat, corn and beans per year. It produces around 4-5 million tons of rice, which is sufficient to meet local demand, but must import most other products.
yonngong@yna.co.kr