FRANCE – France’s agricultural cooperatives dealing in grain have formed a new export alliance in a bid to improve their competitiveness in the overseas grain market, reports Reuters.
The joint venture comprising of three of France’s largest agricultural commodities companies will focus on wheat and barley exports outside the European Union.
Referred to as the Grains Overseas unit, the alliance was established by cooperative groups InVivo, Axereal and NatUp who are looking to gain a competitive advantage in overseas market that is dominated by Black Sea producers like Russia and Ukraine.
The new alliance targets to export 4 million tonnes of soft wheat and feed barley per year outside the EU through joint grain procurement and the sharing of storage silos at ports and on river routes.
The joint venture in which InVivo will own 60% and Axereal and NatUp 20% each, is set to be effective from July.
It aims to handle 2.4 million tonnes in its first marketing season before reaching the 4 million level within two or three years.
According to Reuters, grain procurement would be done through InVivo’s InGrains platform, developed two years ago to attract more competitive grain offers.
The alliance hopes to handle beyond 4 million tonnes and bring in other partners in future depending on its initial success.
“We want to achieve the volumes with good profitability,” said InVivo Chief Executive Thierry Blandinieres.
“We’re giving ourselves two years to succeed and to demonstrate the resilience of this model.”
InVivo is a grouping of some 200 farmer-owned cooperatives while, Axereal, based in central France, is one of the country’s largest cooperatives and a member of the InVivo network.
NatUp is based in northern France and owns a grain silo at Rouen, France’s biggest grain port.
The development comes at the back of Russia’s efforts to penetrate the Algerian wheat market, the largest overseas grain outlet for France.
As part of the agreement, each partner would continue exporting independently other products like maize, oilseeds, malting barley and durum wheat.
Also, InVivo’s trading office in Singapore, which notably supplies Asian and Middle Eastern markets, would remain separate but would support Grains Overseas’ marketing.