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Trade deal to bring Colombian coffee to Asian markets

Trade deal to bring Colombian coffee to Asian markets

Posted by Adrian Pelaez on February 18, 2014

A new trade venture signed Monday hopes to see Colombian coffee take on a greater share of burgeoning east Asia markets.

The agreement, negotiated between Colombia’s Nutresa Group and the Japanese Mitsubishi Corporation, will result in the creation of the Oriental Coffee Alliance (OCA), with a 50% stake going to each of the companies, according to national media outlets.

The alliance was signed in Tokyo, Japan, by Nutresa Group President Carlos Piedrahíta, Colafé President Jorge Arango and representatives from the Mitsubishi Corportation, and the OCA’s new headquarters are expected to be established in Kuala Lumpur, Malaysia.

Nutresa’s Colcafe subsidiary will reportedly run the Colombian half of the company and appoint the Commercial Director, while the Mitsubishi Corporation’s representatives will name the CEO.

Piedrahíta told El Colombiano newspaper, “this link with the Mitsubishi Corportation, as a Japanese multinational and one of the biggest and most renowned conglomerates in the world, with huge commerical influence in Asia, enable the Nutresa Group to pursue objectives initiated by the acquisition of Dan Kaffe (Malaysia) and to increase our role in the global coffee industry, to diversify production and the origins of our coffee and tap into the rapidly growing Asian coffee market.”

With its activities focused in east Asia, the OCA will look to take advantage of the surging demand for coffee in countries like Japan and South Korea.

In a 2013 interview with Colombia Reports, Head of Operations for the International Coffee Organization Mauricio Galindo estimated that the emerging Asian market would comprise 50% of global coffee consumption by 2020.

This expansion is part of a broader effort on the part of the Colombian business community and government to booster relations with Asia. One of the key goals of the Pacific Alliance trade pact, pushed initially by Colombian President Juan Manuel Santos, is to increase the presence of Latin America’s Pacific coast.

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