NEW YORK Itochu Corp (8001.T), one of Japan's biggest trading companies, said on Monday it has agreed to buy a stake in a new joint venture with privately-owned cocoa trader and processor Transmar Group, marking its first foray into the chocolate market.
Under the terms of the deal, the companies will form a joint venture called Transmar Group Ltd, which will be based in Britain and hold the majority of Transmar's existing cocoa operations in the United States, Europe and South America, a joint statement said.
Itochu said it will take a stake of slightly below 20 percent in the new venture and will act as its distribution agent in select geographies.
Transmar Chief Executive Officer Peter Johnson will run the new venture.
The deal gives Transmar access to Asia, seen as one of the fastest-growing regions for chocolate demand in the long term.
Still, bean grinders have struggled with poor margins over the past year as cocoa prices CCc1 have soared while consumption of cocoa butter and powder, which are key ingredients in chocolate and chocolatey treats, has weakened.
For Itochu, the move is part of the growth strategy for its food division, which buys food stuffs ranging from grains and oilseed to coffee beans and livestock products, on behalf of third parties. The division also handles processing of food.
The deal is expected to close this month.
(Reporting by Josephine Mason and Marcy Nicholson; Editing by Paul Simao)
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