Posco Daewoo eyes several candidates for acquisition in overseas grain market

Lim Chang-won Reporter Posted : 2019-03-08 11:30 Updated : 2019-03-08 11:30
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[Courtesy of POSCO Daewoo]

SEOUL -- In an effort to become a leading player in the global grain market, Posco Daewoo, a trading company affiliated with South Koren steel giant Posco, is eyeing more food-related foreign companies or facilities following the acquisition of a grain terminal in Ukraine.

"We will expand our overseas food business this year," Posco Daewoo CEO Kim Young-sang told Aju Business Daily, adding Posco would play a leading role in South Korea's food security.

Posco Daewoo has become the first domestic company to have the operating rights of a grain export terminal abroad by acquiring a 75 percent stake in a grain terminal run by Orexim Group, a leading transshipment and exporting company in Ukraine.

In Mykolaiv, also known as Nikolaev, which is an important transportation hub of Ukraine, Orexim is modernizing and expanding the terminal to increase its storage capacity. Posco Daewoo was allowed to control the process of purchasing, inspecting, storing and shipping corn, wheat and soybeans produced in Ukraine.

"If our business in Ukraine is successful, we will enter other countries," Kim said. Without disclosing locations, he said his company is eyeing "a few candidates."

Posco Daewoo has expanded its presence in the global grain market, especially in Southeast Asia. The company has tapped into the palm oil market, and construction of its rice processing complex in Myanmar will be completed in April. The complex in the Twante logistics base has an annual capacity of 100,000 tons.

In August last year, Posco Daewoo agreed with Vietnam's leading agricultural product company Tan Long Group to expand feed grain production, cooperate in exports of rice, pork and other processed meat products, and invest jointly in a rice processing complex.

As South Korea's top agro-resources trading company, Posco Daewoo has vowed to establish a food value chain covering farming, processing, trading and logistics, amid growing concerns about climate change and food security. 
 
Other trading firms have followed suit. LG International, the trading wing of South Korean conglomerate LG Group, acquired two Indonesian palm oil farms covering 25,000 hectares.