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The deal

Mitsui Co., the Japanese food-to-chemicals conglomerate, has snapped up a stake in Italy-based rice and pulses supplier Euricom.

In April last year, the two businesses announced a “strategic partnership” through which they set out to work in areas including sourcing and new product development.

With interests in industries from food and chemicals to steel, electronics and healthcare, Tokyo-based Mitsui is one of the largest sogo shosha, or general trading companies, in Japan. Its food interests range from agricultural inputs to investments in food processing in Asia, the Americas, Africa – and Europe.

Euricom, Mitsui’s latest investment in Europe, sells rice into Europe’s retail and foodservice markets. It also supplies B2B customers. In 2022, the company generated a turnover of €800m ($874.9m) and an after-tax profit of “about €40m”. It sources rice from southern Europe, South America, India and south-east Asia.

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Why it matters

It’s only been five weeks since Mitsui’s management unveiled the company’s latest strategy document. The group’s “medium-term management plan 2026” contains three “key strategic initiatives” – one of which is the creation of a “wellness ecosystem”.

Alongside Mitsui’s healthcare business, the document shows food is central to that ecosystem and Mitsui’s interests here range from animal health and ingredients through to food processing and food science.

Announcing the investment in Euricom, it’s clear Mitsui’s management has its eye on growing market segments in food. “Against the backdrop of dietary diversification and a growing focus on health and the environment, the markets for rice products and pulses are growing across the globe,” the company said. “In Europe, surging immigration is also contributing to significant demand growth.”

Mitsui said its investment in Mauritius-based pulses supplier ETG could benefit Euricom.

“By leveraging ETG’s raw material procurement networks in Africa and North America with Euricom’s extensive sales channels and close relationships with major European retailers, Euricom can step up the development of new rice products and strengthen their business operations in areas other than rice products, such as pulses,” Mitsui added.

Euricom talked up the benefits of Mitsui’s backing, especially after having worked with the company for a year.

It’s telling the deal is the first time Euricom’s two founding families – the Nervis and Sempios – have accepted outside investment in the company.

Bruno Sempio, the Euricom chairman who will continue to control the company and lead its management team, said: “Mitsui has proven to be a reliable long-term partner helping family-owned companies, like ours, build a more institutionalised and global platform for growth while respecting the existing day-to-day management and entrepreneurship of the company. This is exactly the type of support that we need in this critical juncture of the group’s development to take Euricom to the next level of growth and global reach.”

Just what Euricom’s ambitions are remains, at present, the subject of a little speculation, given the company did not respond to a request for further comment.

However, based on the group’s statement, it sees Mitsui’s latest investment in food supporting its bid “to meet its growth target of increasing strongly its size earlier than originally planned, as it will also help fund acquisitions within both its existing product range as well as new synergistic categories”.

GlobalData, Just Food’s parent, sees clear revenue synergies for Euricom. “Italian products are relatively well received in Japan [where] Euricom’s products can be exported,” Mitsue Konishi, GlobalData’s lead analyst for food, says. “Additionally, globally, the pulse is a well-regarded protein source due to the rise of the plant-based diet. Euricom’s pulse business can have a global opportunity. Involving a Japanese conglomerate, like Mitsui, will help to expand its market.”

The details

Mitsui is to pay around Y200bn ($1.41bn) for its “partial shareholding” in the company. The size of the stake was not disclosed and both companies declined to comment beyond their published statements.

Euricom said Mitsui would be a “minority shareholder”. The deal gives Euricom an enterprise value of €500m, the company added.

The April 2022 partnership gave Mitsui acquired a minority stake in Euricom’s Polish rice subsidiary Przedsiębiorstwo Rol-Ryż.

Mitsui’s move to invest in Euricom itself will swap its stake in Rol-Ryż for new shares in the Italian group.

More research:

Mitsui & Co. – company profile