Sojitz Corporation established Sojitz Buenas Tierras del Sur S.A. (“BT”) as a wholly-owned subsidiary in Argentina to conduct agricultural production of soybeans and other products, and will begin producing and selling soybeans and grain products this year in cooperation with Buenos Aires based Cazenave y Asociados S.A., a leading Argentinean agricultural business operating company. This is the first time that a Japanese major trading firm has directly established an overseas subsidiary to engage in the agricultural business.

[Soybean Farm]		[Corn Farm]

Sojitz invested approximately 500 million yen in fiscal 2010 and will use approximately 11,000 hectares (equal to about twice the area of central Tokyo) in Argentina’s rich Pampas agricultural region to produce a total of about 30,000 tons of soybeans and grains. In fiscal 2011 and later, Sojitz will expand production in Argentina while developing agricultural business in other South American countries including Brazil, which has considerable production and supply capacity, with the expected production of producing approximately 1,000,000 tons of grains in South American by 2017. These grains will be sold primarily by the Sojitz Group to Asian countries which have significant growth in demand for grains.

Global demand for soybeans was approximately 230 million tons in 2009, and with increases in demand for foodstuffs in conjunction with a rising global population and the economic development of emerging countries, demand has increased by about 35 % over the past 10 years. In the future security of food will be of the utmost importance.

Overseas agricultural businesses are subject to weather risks as well as country risks and other difficulties, but Sojitz will reduce those risks by obtaining foreign investment insurance coverage for overseas agricultural projects from Nippon Export and Import Insurance (NEXI). This is the first time that NEXI will insure an overseas agricultural project. Sojitz will also obtain multi-risk weather insurance from leading Argentinean insurers to hedge against weather risks. Thus, Sojitz is creating a business model that responds to a variety of different risks.

Sojitz will accumulate the expertise concerning agricultural businesses by participating directly in the business. In the future, Sojitz will develop the agricultural business in Asia and Africa and expand functions to large-scale upstream agricultural production in South America while reinforcing mid-stream distribution functions including trade and strengthening downstream food processing and distribution in Asia. Sojitz will build a global value chain that covers numerous products and countries and develop stable agricultural procurement and supply structures mainly in Asia.

The Planned Agricultural Production Region of Argentina

Overview of the New Company

Name	Sojitz Buenas Tierras del Sur S.A.
Established	2010
Head offices	Buenos Aires, Argentina
Representative	To be seconded from the Sojitz head office
Equity participation	Sojitz 95%, Sojitz Argentinean subsidiary 5%
Business activities	Development of agricultural business, primarily in the Pampas region of Argentina. Production, sale, and export of oil-producing crops, mainly soybeans, and coarse grains on approximately 11,000 ha (in fiscal 2010).

Overview of Cazenave

Name	Cazenave y Asociados S.A.
Established	1969
Head offices	Buenos Aires, Argentina
Land area operated	Approximately 200,000 ha
Overview of business	A leading agricultural business operating company in Argentina; its outsourced agricultural operations have a well-established reputation.