Press Releases

2009

August 7

ITOCHU Launches Milk Powder Business with Australian Dairy Manufacturer, Burra Foods

ITOCHU Corporation and ITOCHU Australia Ltd have decided to invest A$31.5 million in Victoria-based BFA Holdings Pty Ltd, the 100% holding company of Australian dairy manufacturer, Burra Foods Pty Ltd, in return for a 45% stake in the company. ITOCHU will also provide a loan of A$6.75 million towards development of infrastructure at the Korumburra site.
Both companies have agreed to establish a new milk powder facility, and ITOCHU will jointly operate the milk powder business with Burra in Australia.

ITOCHU and the existing owners, the Crothers family, will construct new milk powder facilities for skim milk powder, whole milk powder and other products, in the current factory location in Korumburra in Victoria, with milk powder production capacity estimated at 24,000 tons per year. The factory is scheduled to commence operating in July 2010.

Demand for dairy products in the Chinese and Asian markets is rising, with their growing population and improving income levels, and there is a growing need for new production initiatives, especially in light of the attention given to safety and confidence in food following the food poisoning problems of recent years. Although self-sufficiency in dairy products in Japan is relatively high at around 60%, some imports are required, and there is a strong need for a stable supply of high-quality products. Burra is an Australian manufacturer with understanding and experience of Japanese requirements, as a result of its dealings with Japan in dairy products over about 15 years. ITOCHU believes this company is capable of supplying products suitable to the Chinese, Asian and Japanese markets targeted by ITOCHU.

As ITOCHU pursues a Strategic Integrated System (SIS) strategy to establish a global value chain, this business is positioned as part of the upstream food resources supply system. ITOCHU sees this business as making an excellent contribution to the establishment of a global value chain, as it offers a stable supply of dairy products and food safety, earning the confidence of users in Asian markets such as Japan and China.

July 30

ITOCHU to Participate in Desalination Project in Victoria, Australia

On 30 July 2009, the Aquasure Consortium, of which ITOCHU is a member, was selected by the Victorian Government as a preferred bidder for the Victorian Desalination Project. The Project will be delivered as a Public Private Partnership (PPP) and will be one of the largest desalination plants (150GL/year) in the world.

The core members of Aquasure are SUEZ ENVIRONNEMENT, Thiess, and Macquarie Capital Group. The project cost is expected to be around A$3.5bn, including construction of a reverse-osmosis desalination process plant, seawater intake, water pipeline, and transmission line. AquaSure will construct the plant by the end of 2011, and will then operate it for 27 years, providing a reliable water supply for Melbourne and surrounding regions. It will operate with a renewable energy offset leading to the construction of a new wind farm in Victoria.

ITOCHU Corporation will contribute A$100M in equity and second directors to the AquaSure project companies. Three major Japanese banks, Sumitomo-Mitsui Banking Corporation, Mizuho Corporate Bank, and The Bank of Tokyo-Mitsubishi UFJ, will also participate in an international banking group providing project finance for the project.

The desalination plant is scheduled to transfer water by the end of 2011, and will meet approximately 30% of the water needs of Melbourne. The project will also be the first desalination project delivered by PPP in Australia.

ITOCHU is placing a strategic emphasis on the water sector, and has been very active in the Middle East, including Saudi Arabia. ITOCHU will accelerate and expand its activities in the water sector for countries in the Middle East, Australia, and Asia, where stress on the water supply is soaring.

June 18

ITOCHU Participation in Feasibility Study for Western Australia Uranium Development Project

ITOCHU Corporation, through its Australian affiliate ITOCHU Minerals & Energy of Australia Pty Ltd (IMEA), has announced its participation in a feasibility study for a uranium development project in Western Australia owned by Canadian uranium mining company, Mega Uranium Ltd.

This project, named Lake Maitland, is located in the Eastern Goldfields region of Western Australia, and with inferred uranium resources of approximately 11,900ST (about 9,100t), is now undergoing a feasibility study, with production aimed at starting in 2011.

If IMEA decides to participate in developing this project, after the results of the feasibility study are known, it will acquire rights to 5% of the uranium ore.

In addition, Japan Australia Uranium Resources Development Co Ltd (JAURD), in which ITOCHU also has a share, will have rights to 30% of the project.

Annual world demand for uranium for use in nuclear generation amounts to approximately 65,000 tons. As one of the three biggest uranium traders, ITOCHU sells about 4,000 tons of natural uranium per year (as at 2008). In recent years, major Japanese trading corporations have been aggressively investing in various projects to develop natural resources. ITOCHU has long been focused on uranium, and is committed to an aggressive approach in uranium trading activities, in order to ensure stable energy supplies and also to reinforce the company’s wide range of resource development business.

ITOCHU opened its New Energy Department on April 1, 2009, committed to aggressively pursuing environmentally-friendly new energy business, such as nuclear fuel and bio-ethanol, as well as carbon credits.

February 19

ITOCHU Makes Donation to Victorian Bushfire Appeal 2009

In order to assist the individuals and communities affected by the recent devastating bushfires in Victoria, ITOCHU Australia Ltd today made a joint donation of A$100,000 to The Australian Red Cross 2009 Victorian Bushfire Fund, on behalf of ITOCHU Corporation, ITOCHU Australia Ltd, and other ITOCHU companies in Australia. In addition, staff voluntary donations were also matched by the company.

2008

December 23

Roper Bar NT Iron Ore Project
- ITOCHU Farm-in and Joint Venture with Western Desert Resources -

ITOCHU Minerals & Energy of Australia Pty Ltd (IMEA), a subsidiary of ITOCHU, reached formal agreement with Western Desert Resources (WDR) in December 2008, to enable exploration and development of the highly prospective Roper Bar iron ore project in the Northern Territory.

IMEA's subsidiary, IMEA Exploration and Development of Australia Pty Ltd (IEDA), and WDR have executed detailed farm-in and joint venture arrangements, under which IEDA will initially acquire a 15% interest in the Roper Bar iron ore project at a cost of $2 million. The tenements affected at this stage are exploration licences EL26759 and EL25672. The farm-in agreement also provides for IEDA to expend up to A$15 million over the next six years to earn up to a maximum 51% equity in the project, in addition to the initial acquisition.

The Roper Bar project is 30 kilometres west of the Gulf of Carpentaria and just 240 kilometres east of the Alice Springs to Darwin rail corridor. ITOCHU looks forward to participating with WDR in exploring and developing this exciting iron ore opportunity.

November 25

Western Australia Iron Ore
- Approval Given for Investment in Major Capacity Expansion to Meet Long-Term Increase in Demand for Iron Ore -

ITOCHU Corporation (through its subsidiary ITOCHU Minerals & Energy of Australia Pty Ltd (IMEA)), Mitsui Iron Ore Corporation and BHP Billiton, have jointly announced their decision to invest in the Rapid Growth Project-5 (RGP5), which will provide a major capacity expansion for Western Australian iron ore.

ITOCHU, Mitsui and BHP Billiton are joint operators of three iron ore mines, Mt Newman, Yandi and Goldsworthy, in Western Australia, with BHP Billiton holding an 85% share, ITOCHU 8%, and Mitsui 7%. In 2007 shipments from these mines totalled 111 million tonnes, mostly to Asia.

Demand for iron ore is fuelled mainly from developing countries such as China, and is expected to continue to grow in the medium and long-term future. In order to meet this long-term growth in demand, ITOCHU and Mitsui, through their iron ore subsidiaries in Western Australia, have decided to invest in iron ore capacity expansion.

The joint venture companies have promoted a series of expansion plans (Rapid Growth Projects, or RGPs), based mainly on increased production at Mt Newman. RGP4 is currently underway, and will increase annual production in 2010 to 155 million tonnes. In parallel with RGP4, this new approval announced today will mean that RGP5 will increase production by another 50 million tonnes, to an annual total of 205 million tonnes. RGP5 will enable upgrades including additional shipping berths at the Port Hedland inner harbour (Finucane Island), double tracking of the railway line between the mine and the port, additional crushing, screening and stockpiling facilities at Yandi, and expansion of facilities at Mining Area C (Goldsworthy joint venture). RGP5 is expected to deliver first production in the second half of the 2011 calendar year.

Earlier this year, in February, approval was given for a partial advance investment in an expansion plan to increase annual production to more than 200 million tonnes, and this latest approval is to enable that expansion plan to get underway. The amount of investment, including the advance investment previously approved, is US$5.6 billion (JPY532 billion), of which ITOCHU’s share is US$448 million (JPY42.6 billion).

November 21

ITOCHU & Daiken Purchase NZ MDF Plant

On 21 November, ITOCHU and Daiken announced that they had jointly purchased an MDF (medium density fibreboard) manufacturing plant in New Zealand.

The two companies purchased the Rangiora plant of major timber company Carter Holt Harvey (CHH) on 20 November. With this in mind, a holding company, Daiken NZ, was established on 18 November.

Daiken NZ will be 51% owned by Daiken Kogyo, 29% by ITOCHU Corporation, and 20% by ITOCHU New Zealand, and is expected to start operations in February 2009.

ITOCHU and Daiken have already established an MDF plant in Sarawak, Malaysia, in 1996 (Daiken Sarawak). In 2005 they acquired a Malaysian company, Samrin Fibreboard, and established Daiken Miri. This enabled the supply of MDF to be doubled. Nearly all of Daiken Sarawak’s production, and about half of Daiken Miri’s production, is sent to Japan, and marketed by Daiken and ITOCHU.

By participating in the New Zealand venture, ITOCHU and Daiken combined will hold the biggest share among Japanese MDF producers.

ITOCHU believes that the future of MDF, as an eco-friendly product made from the off-cuts produced from milling timber, lies not just in the fact that it is a building material, but also because it can be used in a number of various other applications. In “ecology-conscious” countries such as the USA and Europe, eco-friendly products such as MDF account for about 70% of all wood-type panelling, but in Japan this figure is still only about 30%. So there is potential for lots of growth in the use of this basic material.

February 4

Funding Approved for Accelerated Growth of Western Australia Iron Ore Project

ITOCHU Minerals & Energy of Australia Pty Ltd (IMEA), along with BHP Billiton and Mitsui Corporation, have announced pre approval pre-funding for the jointly operated Western Australia Iron Ore Project, in order to underpin further accelerated expansion (Rapid Growth Project 5), and to undertake detailed engineering studies.

The three companies jointly operate 3 iron ore mines in Western Australia -- Mount Newman, Yandi, and Goldsworthy (ITOCHU 8%, BHP Billiton 85%, and Mitsui 7%), and in 2007 exported 111 million tonnes of iron ore, mainly to Asia.

Expansion works currently being carried out are centred on Mount Newman and will enable production to reach 155 million tonnes in 2010. As well as this, additional works such as new railway tracks, port facilities, and expansion works at Yandi mine and Mining Area C mine, will enable additional production of 50 million tonnes, and total production is expected to reach 200 million tonnes per year by 2011.

This early funding will allow the procurement of long lead items, duplication of the railway track between Yandi and Port Hedland, and expansion of the inner harbour at Port Hedland. The total funding is expected to amount to US$1.094 billion, of which ITOCHU’s share is approx. US$87.5 million. A decision on further funding for the whole RGP-5 may be reached in the second half of 2008, depending on the results of detailed engineering studies.

World shipments of iron ore, which totalled only about 430 million tonnes in 1997, reached 790 million tonnes ten years later in 2007, due to growing demand arising from China’s rapid growth, and are expected to reach 900 million tonnes in 2010. ITOCHU and its partners are working to supply the iron ore needed to meet this growing world demand, through its involvement in the Western Australia Iron Ore project.