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Japan’s Mitsui to invest in African food commodities trader

Mitsui & Co, the Japanese trading house, is to invest about $265m in an African agricultural commodity merchant that is one of the world’s largest traders of cashew nuts, pulses and sesame seeds.

ETG, the specialist African trading house, came under the spotlight when US private equity group Carlyle invested in the company in 2012. The US group exited its investment in 2015 when it sold back its minority stake to the African company’s management in 2015.

Mitsui will acquire secondary shares from the ETG founders and African investment group Pembani Remgro Infrastructure Fund. The transaction will offer an exit for Standard Chartered, which invested alongside Carlyle in 2012. Mitsui is set to end up with about 30 per cent of ETG subject to regulatory approval.

Japanese trading houses, looking to diversify their portfolios away from energy and mining, are looking to increase their investments in food and agricultural sectors. Africa is also regarded as a new frontier where they are looking to increase their exposure. “There is major potential for growth in the African market,” Mitsui said.

Another Japanese trading house, Mitsubishi, bought a 20 per cent stake in Singapore’s Olam in 2015 for $1.1bn.