Leading Australian agribusiness GrainCorp has teamed up with Zen-Noh Grain Corporation – a subsidiary of Japanese agricultural cooperative Zen-Noh – to expand its grain origination footprint in Canada.
The Calgary-based joint venture will operate grain receival sites across Alberta and Saskatchewan that will be part of a fully integrated supply chain for the origination, marketing, storage, handling, distribution and exporting of Canadian grain and oilseed.
GrainCorp will contribute CAD$30 million for the construction and commissioning of the sites over the next two years, while the joint venture will source additional CAD$60 million from financial institutions. According to GrainCorp, the construction and other activities of the joint venture are subject to the satisfactory completion of due diligence of the potential sites, as well as obtaining other customary regulatory and planning approvals.
GrainCorp Managing Director & Chief Executive Officer Mark Palmquist said the expansion was in accordance with the growth strategy outlined at GrainCorp’s Investor Day in May.
“This is an exciting opportunity to partner with one of the world’s most respected agricultural organisations and deepen our relationships with our international customers by growing our grain origination capability. The joint venture will leverage GrainCorp’s existing Canadian footprint, including our Calgary Marketing office and Canadian Malting Company operations; plus Zen-Noh Group’s significant experience and customer relationships in exporting agricultural commodities from North America to Japan and other Asian destinations,” Mr Palmquist said.
“A key part of GrainCorp’s value proposition for international customers is to have a multiorigin offering, so that we are in a position to offer a solution for a broader range of requirements. This gives us greater relevance and a broader platform to engage with the customer, creating more opportunities to offer our services. Of course, the new business also benefits grain and oilseed growers in the Canadian Prairies, by providing an independent and alternative pathway to market.”
Mr John Williams, President & CEO of Zen-Noh Grain Corporation said the company was happy to be working alongside GrainCorp.
“We are pleased to be involved in this project with GrainCorp. This is a good opportunity to grow our business in Canada with a trusted partner. It allows us to strengthen further our ability to supply our customers in Japan and Asia and we look forward to a bright future for the joint venture,” he said.