The COFCO Group

COFCO was China's sole legitimate window for agricultural foreign trade before 1987. The reform of China's foreign trade system beginning in 1987 cost COFCO its monopoly position. Subsequently, the SOE giant capitalized on its foreign trade expertise to strategically move upstream in the food industrial chain. Additionally, COFCO made investments in unrelated areas. These unrelated diversification activities were stopped by the new Chairman Ning Gaoning, appointed in 2004. He cared greatly about the innate logic for future mergers and acquisitions. The company, under his leadership, focused on its weaknesses and strengths, to identify a focused overall strategy. He brought the "whole industry chain" concept to COFCO with three clear goals in mind: 1) to shape "farmland to table" food processing to assure customers of safe, high-quality food, 2) to unite COFCO's segmented business units, and enable them to gain competitive edge over local companies 3) to increase the company's strength to compete with global food companies. The case depicts COFCO's historical transformations, identifies its mergers and acquisitions since 2005 and shows its financing history. Information is provided about several domestic and overseas competitors to illustrate COFCO's role in a larger China environment. It is not only a market player but also a main force in China's pillar industry and the only domestic food company that can rival global food companies in China's domestic market.