Bunge sells 35 Mississippi grain elevators to Japan’s Zen-Noh Corp

22 Apr 2020 | Tim Worledge

US agri-giant Bunge has agreed a deal to sell 35 of its US grain origination elevators to Japan’s Zen Noh Grain Corporation (ZGC), the companies confirmed in press statements late Tuesday.

Neither company has disclosed the price paid for the elevators, all of which are located along the Mississippi River, the key artery connecting the US agricultural heartlands to the US Gulf export hub.

Zen-Noh, a subsidiary of the National Federation of Agricultural Cooperative Associations of Japan, heralded the deal as a major investment in securing key supply infrastructure tying Japan’s vital destination market ever closer to the US origination markets.

“This acquisition contributes to ZGC’s ability to adequately source a stable supply of grains, oilseeds, and feed ingredients for Japan and other destinations by strengthening its origination across a broader footprint in the US,” the ZGC press release said.

For Bunge, one of the biggest agricultural companies in the world and part of the ABCD quartet along with ADM, Cargill and Louis Dreyfus, the deal allows it to focus on “higher returning areas of the company” according to CEO Greg Heckman.

“Bunge will continue to be an industry leader in the U.S. grain marketplace through global grain trading and distribution with our export terminals in Destrehan, Louisiana, which we are expanding, and EGT, our joint venture in the Pacific Northwest,” Heckman said in the press release.

At the company’s last quarterly results, in February, Heckman said the 2020 strategy was to be “nimble” and revealed better-than-expected results for its South American grains and oilseeds operations.

Japan is a significant customer for US produce and is the world’s second-biggest importer of US corn along with being a significant importer of US wheat and soybeans.

Both the corn and wheat trade between the two countries hit the headlines in 2019 as the US looked to thrash out a new trade deal with Japan at the height of its trade war with China.

In August 2019, US President Donald Trump put Japan’s prime minister Shinzo Abe on the spot during a White House press conference after he announced that the country would buy 2.5 million mt of excess US corn.

Earlier, Trump had also claimed at a rally in Pennsylvania that Japan didn’t want US wheat and only bought “to make us feel good,” causing a storm among US wheat farmers.