Harim Group has acquired 58 percent of Pan Ocean Co. Ltd., South Korea’s largest bulk shipping company, for KRW1 trillion (US$8.94 million). Shareholders and creditors approved the deal this week.
In May, the South Korean livestock and animal feed group said it plans to grow sales at Pan Ocean seven times to more than KRW10 trillion (US$8.94 billion) annually within six years.
Harim has said it plans to add a grains trading business to Pan Ocean and plans to grow it into a major dealer, increasing efficiencies in shipping.
"Those who had previously owned Pan Ocean did only shipping, but we will add grain trading," Harim Chairman Kim Hong-kuk has said. "We have done lots of business in livestock sectors requiring grains as raw materials. We know how to do it and we also have a demand base," he said.
Kim said the addition of Pan Ocean and a grains trading business would increase efficiency because fewer ships would be making empty return trips. The purchase also will help Harim reduce costs in its poultry, pork and feed business.
"Prices of grain and corn are determined by international markets, so there is not much room for cost efficiency," said a Harim spokeswoman. "However, efficient and reliable transportation for grain and corn, much of which are imported from the U.S. and Brazil, will help us save costs, (increasing) overall operational efficiency."