Miller Magazine Issue:114 June 2019

26 NEWS JUNE 2019 China plans overhaul of state agriculture giants China plans to transfer the trading assets of stockpiler Sinograin to food giant Cofco Corp., according to people with knowledge of the plan, Bloomberg reports. The restructuring would be implemented in several stages and also includes Cof- co taking over oilseed crushing capacity from Sinograin, said the people, who asked not to be identified because they’re not authorized to speak publicly. The revamp of the biggest state companies in China, the top consumer and importer of farm products, will take Cofco closer to its goal of rivaling the storied ‘ABCD’ group of in- ternational commodity powerhouses that dominate flows of agricultural products, while extending its ability to secure food supplies for the world’s most populous country. The overhaul would also dovetail with President Xi Jinping’s drive to reform China’s sprawling and inefficient state-owned enterprises, which account for almost half of the nation’s industrial assets. Steel, power and chemicals companies are among those already targeted in the restructuring program, with a long-mooted megamerger of China National Chem- ical Corp. and Sinochem Group now said to be close. “The reshuffle plan for the two agricultural giants reflects the cen- tral government’s efforts to promote ‘supply-side’ structural reforms,” said Monica Tu, an oilseed analyst from Shanghai JC Intelligence Co. “It’ll become part of the wave created by the reorganization of large state-owned companies.” The details of the plan are subject to change, the people said. The Chi- nese government aims to complete the restructuring by the end of next year, according to two of the people. COFCO TO BECOME CHINA’S BIGGEST CRUSHER OF SOYBEANS While Cofco’s duty is to keep China’s population fed, Sinograin’s role is more blurred. It imports soybeans and soyoil for state reserves, but it also has commercial oilseeds crush- ing and refining capacity that makes it the fifth-biggest play- er in China, according to its website. Transferring Sinograin’s crushing capacity would make Cofco China’s biggest crusher of soybeans, according to data from China National Grain and China is said to be planning a shake-up of its massive state-run food compa- nies in a move that’s set to reverberate around global agricultural markets. The overhaul will give Cofco a decisive lead as the nation’s top crusher.