July 11, 2019 / 11:23 AM / 9 days ago

UPDATE 1-French grain cooperatives forge export alliance to revive fortunes

* InVivo, Axereal, NatUp to pool soft wheat, feed barley exports

* Grains Overseas aims to export 4 mln T annually in 2-3 years

* Merged trading desk, shared buying seen boosting efficiency

* Competition from Black Sea region has curbed French exports (Adds detail, InVivo CEO quote)

By Valerie Parent and Gus Trompiz

PARIS, July 11 (Reuters) - Three of France’s largest agricultural groups have formed a grain export joint venture in an attempt to improve their competitiveness in overseas markets increasingly dominated by Black Sea producers like Russia and Ukraine.

Cooperative groups InVivo, Axereal and NatUp have established the Grains Overseas unit with the aim of shipping 4 million tonnes of soft wheat and feed barley per year outside the European Union, they said in a statement on Thursday.

The unit, in which InVivo will own 60% and Axereal and NatUp 20% each, will notably involve joint grain procurement and the sharing of storage silos at ports and on river routes, they said.

The joint venture, effective from July, aims to handle 2.4 million tonnes in its first marketing season before reaching the 4 million level within two or three years, InVivo Chief Executive Thierry Blandinieres told Reuters by telephone.

Grain procurement would be done through InVivo’s InGrains platform, developed two years ago to attract more competitive grain offers, he said.

“We want to achieve the volumes with good profitability,” Blandinieres said. “We’re giving ourselves two years to succeed and to demonstrate the resilience of this model.”

Grains Overseas could expand beyond 4 million tonnes and bring in other partners in future depending on its initial success, Blandinieres said.

InVivo, one of France’s largest grain exporters, has sharply reduced volumes in an attempt to curb trading losses, compared with 7-8 million tonnes handled a few years ago.

ALGERIA

InVivo is a grouping of some 200 farmer-owned cooperatives. Axereal, based in central France, is one of the country’s largest cooperatives and a member of the InVivo network.

NatUp is based in northern France and owns a grain silo at Rouen, France’s biggest grain port.

Blandinieres had said in January that France’s grain cooperatives should collaborate more in exports, including by merging trading desks.

Efforts by Russia to gain access to the Algerian wheat market, by far the largest overseas grain outlet for France, have lent urgency to debate in France.

Blandinieres said he hoped France could “win another two or three years” without Russian competition in Algeria in order for French exporters to be ready.

InVivo parted company with its head of trading, Stephane Bernhard, in April, with Blandinieres taking temporary charge.

The next head of trading at InVivo would also become the director of Grains Overseas, with an appointment expected by the end of the year, Blandinieres said.

Grains Overseas would bring together at InVivo’s offices soft wheat and feed barley traders from InVivo and Axereal’s Granit Negoce trading arm. Each partner would continue exporting independently other products like maize, oilseeds, malting barley and durum wheat, he said.

InVivo’s trading office in Singapore, which notably supplies Asian and Middle Eastern markets, would also remain separate although it would support Grains Overseas’ marketing, he added.

Reporting by Valerie Parent and Gus Trompiz Editing by Bate Felix and Emelia Sithole-Matarise

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