IPO-headed Cofco leads China’s ‘friendly’ charge against west
Ning Gaoning, the chairman of Cofco, the Mengniu Dairy owner which last year paid US$3bn for a 51% stake in an agriculture joint-venture with Noble Group of Hong Kong, said he planned to transform his company into a publicly listed global major within the next three to five years.
If that happened, Cofco will join a select stable of companies that dominate the global agricultural trend—namely the so-called “ABCD" quartet of companies of Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus.
Global over local
"This should be not a Chinese, but a global company… The IPO will help us to achieve this standard,” said Ning at a conference in London.
Continued moves by Cofco and other predatory Chinese food companies to acquire international interests serve as final confirmation that the last vestiges of the country’s self-sufficiency policy, which was abandoned last year, have gone.
One of the most sacred tenets of China’s agricultural policy, grain self sufficiency has increasingly changed to grain imports as its population outpaces the ability to grow its own food.
In what is a “transformation period in China”, Ning said China’s agricultural imports would rise from around 120m tonnes to 200m tonnes in a decade as its people consumed more meat and milk.
Joining the club
“[We’re] not going to be a company that only supplies China,” he said, adding that Cofco was planning to ship agricultural products to several countries.
Cofco’s ambitious plans will put it on a collision course with the dominant foreign agricultural commodity corporations that dominate global supply, like Archer Daniels Midland and Cargill.
“People ask me: are you going to be a buyer or a competitor in the future? I think we will co-operate, but sometimes we will compete. We will compete in a very, very friendly way,” said Ning.
Among Cofco’s ambitions is expansion in North America, Ning told Financial Times in a recent interview. “We need something there to be a so-called global value chain company,” he said.
Meanwhile, China's soybean imports are expected to grow faster than other products at around 5 percent a year or more, Ning said. China currently consumes around a quarter of global soybean output.