A Chinese government commission announced the merger of COFCO, the nation’s largest food trader, with Chinatex Corp., one of the country’s main textile and grain-trading groups, said China Daily. The new company will be “a bigger rival to compete with the so-called ABCD companies.” The “ABCDs” are the long-time international farm export and processing companies — ADM, Bunge, Cargill and Louis Dreyfus.
Under the merger, Chinatex will become a subsidiary of COFCO (China National Cereals, Oils and Foodstuffs Corp.). China Daily said the merger indicated “the central government would push further ahead with its efforts to restructure state-owned enterprises this year.”
Yu Xubo, head of COFCO, said the merger would bring more stability to the Chinese grain market and security to the grain supply. COFCO operates 336 branch companies and plants in more than 140 countries and regions; Chinatex manages more than 30 trade companies and 40 plants in China and abroad. “COFCO will continue to deploy resources in global markets, especially in the fields of agricultural products, sugar, animal feed, fruit, meat and its logistics businesses via the benefit brought by the SOE [state-owned enterprises] reforms, merger and acquisition,” said Yu.