South Korea’s Pan Ocean to take 36% stake in US PNW terminal

13 May 2020 | Tim Worledge

South Korean trade and logistics company Pan Ocean has bought a 36.25% stake in a US Pacific Northwest grain export terminal, local Korean media has reported, in a sign of the company’s growing stake in the US logistics chain.

The Export Grain Terminal (EGT) at Longview in the PNW was built as a joint venture between Bunge, Itochu and STX Pan Ocean, although the facility is currently listed as a Bunge and Itochu joint venture.

Pan Ocean is believed to have bought Itochu’s stake in the business in another reminder of the shake up in the US logistics chain in the wake of the trade war and a harvest blighted by bad weather.

"We can confirm the announced sale that is subject to closing conditions and regulatory approval which is expected to occur in 2020. Bunge remains the majority partner in the EGT joint venture," Bunge's global media relations manager Daiana Endruweit told Agricensus.

The news comes just weeks after Bunge sold 35 of its Mississippi elevators to Japan’s Zen Noh company, as major grain importers look to secure key supply chains.

Data collated in the Agricensus Tender Dashboard shows Pan Ocean has been a growing presence capturing business into South Korea in recent years, supplying 450,000 mt of corn into Korea in 2018, rising to 644,000 mt of corn and feed wheat in 2019.

With just four months of 2020 complete, the company has already handled close to 1 million mt of corn heading into South Korea’s feed sector, securing supply from the US, Brazil, and Argentina.

Itochu, by contrast, last secured a tender into South Korea in August 2019 when it sold 30,500 mt of US and Canadian wheat to SPC.

EGT owns and operates one of the largest grain export facilities on the US west coast, able to handle corn, wheat, soybeans, soymeal, and DDGS exports via rail or barge connections, and states that it is able to unload 120,000 bushels of grain per hour (3,000-3,500 mt).

Alongside that, the company recently purchased an inland elevator in the state of Montana – a key location along the supply routes into the PNW.

South Korea is one of the world’s biggest importers of corn, with the USDA expecting the country to import 11.8 million mt of corn in 2020/21 – up 3.5% on this year’s estimates.

Agricensus contacted Pan Ocean and Itochu for comment but had received no response at the time of publication.

Updated to include confirmation from Bunge.