TOKYO: Japanese trading house Marubeni Corp. said Wednesday that it will sell US unit Gavilon’s grain business to Dutch grain company Viterra Ltd.

Marubeni expects to receive a total of 300 billion to 400 billion yen, including loans, through the deal. The profit is expected to reach tens of billions of yen.

Marubeni decided on the sale because of the grain business’ low profitability and volatility.

Of Gavilon’s operations, Marubeni will keep eight grain elevators in the northern United States and an export base on the US West Coast, which play the key role in its grain exports to Asia, as well as the fertilizer business with growth potential.

Marubeni plans to complete the sale by March 2023.

Marubeni spent 2.7 billion dollars to buy Gavilon in 2013, hoping to become a global grain major. But it has booked a total of 120 billion yen in impairment losses related to Gavilon so far, mainly due to a sluggish grain market.

JIJI Press