TOKYO -- Japanese trading house Mitsui & Co. will pour some 30 billion yen ($267 million) into farm-product trader ETC Group of Dubai under a deal announced Monday, aiming to expand non-resource-related business in Africa.
The company, known as ETG, will buy back shares held by an investment fund, then sell a stake of around 30% to Mitsui by the end of next March. Mitsui will turn ETG into an equity-method affiliate and send directors.
Founded in 1967, ETG is involved in the trade of sesame seeds and other agricultural products, fertilizer and seed sales, and food processing. It operates in 36 countries, mainly in East Africa, with relationships with 2 million family farms. Sales came to $3.6 billion over the 12 months ended March.
The Japanese company hopes that the deal will open up new markets in Africa for its fertilizers and seeds, as well as for a service to develop fertilizer tailored to the local soil, a business it already operates in Chile. The duo will also build irrigation systems and other infrastructure as well as dispense advice on crop choices and improving the land. They will work together on internet-based agricultural management and promoting microgeneration of power.
Mitsui positions nutrition and agriculture as one of four growth pillars under its medium-term business plan and is looking to make further inroads into the growing African market.