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Investment in ETC Group Limited

Nov. 20, 2017


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Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo; President and CEO: Tatsuo Yasunaga) has made the decision to acquire a part of shares in ETC Group Limited ("ETG") and has subsequently entered into a number of agreements, including a share transfer agreement with a total acquisition price of approximately 30 billion yen. ETG will become an equity-method affiliated company, and Mitsui shall be involved in important managerial decision-making processes. With its headquarters in Dubai, ETG has business bases in 330 locations across 36 countries, concentrated mainly in East Africa and countries bordering the Indian Ocean, and a wide-range of business operations which include agricultural products (from origination & processing through to storage & import/export), sales of agricultural supplies (fertilizers, agrochemicals, seeds, etc.), as well as the manufacture and sale of foodstuffs.

One of ETG's credos is "If farmers grow, we grow too" and, with the goal of enabling farms to grow and become independent, the company has expanded its food- and agriculture-related business over the past 50 years. From a logistics point of view, in addition to having origination capability, warehouse facilities and vehicle fleets, ETG has the sales channels necessary to supply daily necessities and foodstuffs to each farming village. Its strength lies in this intricate and comprehensive network, as well as in the relationship of trust it has built with as many as up to two million farms throughout its history. ETG is the leading company in East Africa in handling fertilizers as well as pulses (i.e. beans excluding soybeans and peanuts), a major source of protein in Southwest Asia (India, etc.) and a one of world-leaders of sesame trading.

With the population of Africa expected to reach 1.5 billion by 2025, together with an anticipated rise in urban living to almost 50%, continued growth is forecast in order to meet the demands of food and agricultural production, as well as other business sectors, which are required to support the quality of life.

There is major potential for growth in the African market, in particular, in terms of improving harvest yields, the sophistication and efficiency of low-yield farms, and infrastructure development through private sector-led power supply distribution, and the proliferation of renewable energy.

Mitsui has specified "Nutrition and Agriculture" as one new growth area in which it possesses considerable strength as identified in its new Medium-Term Management Plan, and has been making contributions towards increasing global food yields via its business activities in agricultural supplies (e.g. agrochemicals and fertilizers), crop trading, feed additives and livestock. Developing marine and land-based distribution logistics facilities across the world is also essential for a stable food supply. Mitsui has built a relationship of trust with ETG through many years of crop trading, and together they have met the needs of customers. With this investment, Mitsui will be assigned a number of ETG director posts and establish a new internal organization dedicated to the promotion of ETG related businesses, as well as the further expansion of the nutrition and agriculture business in Africa and Indian Ocean Rim nations.

Mitsui will draw on the experience cultivated from its business activities in the Nutrition and Agriculture sector to provide farming advice, as well as utilize its crop trading network for the procurement of agricultural supplies, amongst others, in order to help ETG expand its existing business. With regard to the launch of new initiatives, Mitsui aims to utilize ETG's business base and diversify ETG's business scope through joint engagement in infrastructure projects and other new business opportunities across Africa. Through such collaboration, Mitsui will endeavor to support ETG to increase its corporate value whilst strengthening Mitsui's earnings base in Africa and throughout those nations bordering the Indian Ocean.

ETG Company Profile

Name of Company ETC Group Limited
Head Office Dubai, United Arab Emirates
Founded 1967
Business Activities Agricultural products (origination, processing, inventory, import/export), fertilizer and other agricultural supplies, food manufacturing and sales
Revenue Approximately US$3,658 million (Fiscal Year ended March 2017, consolidated basis)
Total Asset Approximately US$2,508 million (Fiscal Year ended March 2017, consolidated basis)
Employees Approximately 6,600 (Fiscal Year ended March 2017, consolidated basis)
Affiliates Main Operational Bases: Dubai & Johannesburg;
Group Companies: Approx. 170 companies in 36 countries Logistics Facilities: In approx. 330 locations
Website

http://www.etgworld.com/

ETG's subsidiary locations (Blue: 10 or more locations, yellow: less than 10 locations)

ETG's subsidiary locations (Blue: 10 or more locations, yellow: less than 10 locations)

ETG's truck

ETG's truck

ETG's product: sesame

ETG's product: sesame

ETG's product: fertilizers

ETG's product: fertilizers

Notice:
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Corporate Communications Division
Kai Saito / Ayako Tatsumi
Telephone: +81-3-3285-7564 / +81-3-3285-7562
Facsimile: +81-3-3285-9819