World Grain - December 2010 - 10

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Gavilon announces expansion plans in China
OMAHA, NEBRASKA, U.S. - Gavilon, LLC announced on Nov.
22 plans to expand its business in China to support the company's
grain-trade initiatives in the Asia-Pacific region.
In addition to fertilizer sales and supply activities, Gavilon Hong
Kong Limited will provide destination marketing, logistics and
trade finance services for soybeans, corn, barley, wheat and feed
ingredients, to support its North American and Australian grain
origination volume.
"As global demand for agricultural commodities continues to

grow, a strong presence in China will become increasingly important
in the grain and oilseed markets," said David Levine, vice-president
of Gavilon's international division. "We are looking forward to expanding our agricultural network in China and further developing
relationships with customers in the Asia-Pacific region."
Gavilon's Hong Kong office will be managed by Richard Cheung,
who will serve as general manager of the company's grain business
in China. Cheung has more than 15 years of experience supporting
agricultural customers' needs in the Chinese market.

Saudi Arabia to privatize its flour mills
RIYADH, SAUDI ARABIA - Saudi Arabia's state-run Grain
Silos and Flour Mills Organization (GSFMO) said in November
it would privatize its flour mills by creating four companies, but
will continue to import wheat and sell it to the mills.
The top oil exporter has 11 flour mills it hopes to sell to private
investor groups but it did not give a timeframe for the privatization in an e-mailed statement.
Each of the new companies will cover an area that has access
to a sea port, while the GSFMO will continue importing wheat
and selling it to the mills, said Walid al-Khuraiji, director gen-

eral of Saudi Arabia's grain authority.
In an effort to save water resources, the desert kingdom abandoned a 30-year wheat cultivation plan and has reduced the
amount of wheat it purchased from local farmers by 12.5% a year
since 2008.
The move has turned GSFMO into one of the biggest new buyers in the international grain market.
Saudi Arabia is in the process of raising its production capacity
for fodder, and the GSFMO expects to produce 438,000 tonnes of
manufactured fodder next year, al-Khuraiji said.

Russian United Grain Co. puts investment projects on hold
MOSCOW, RUSSIA - Russian United Grain Company, created by
the government in March 2009, has been forced to put its investment
projects on the back burner after the government slashed its investment pledge and told the company to find private investments and
long-term credits, company spokesman Dmitry Teibash told Dow
Jones Newswires in November.
"We only received a very small amount from the government this
year," Teibash said. "Private investors are not forthcoming as they
see that there is no funding from the state."
The government had originally pledged to invest around $2 billion
in the company in 2010-11, and the company's own investment project was around double that amount, making total investment around
$6 billion. But Teibash said this year the company only received

about $30 million from the government, with no further investment
commitments made by the government so far.
Teibash said United Grain Co. was originally intended to be the
country's main grain exporter, controlling grain storage facilities,
export grain terminals and railway transportation, but because of the
lack of government support the company has had to suspend all its
plans for the time being. The company is also the government's agent
in grain intervention purchases.
Teibash said the company's only significant role at the moment
is transporting grain to regions that suffered from drought this year.
"But the redistribution of grain on the domestic market is also obstructed by our lack of funds," he said. "We hope the government
will give us more financial support next year."

For more information, see Page 78.

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World Grain - December 2010

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