Ceres Global Ag Corp. Announces Strategic Sourcing Relationship With Briess Industries Inc.
TORONTO, ON, (March 11, 2013) – Ceres Global Ag Corp. (“Ceres” or the “Corporation”) is pleased to announce a strategic sourcing relationship between its 100% owned subsidiary, Riverland Ag Corp. (“Riverland Ag”), and Briess Industries Inc. (“Briess Industries”).
In September 2010, Riverland Ag acquired a grain handling facility based in Ralston, Wyoming having storage capacity of 2.3 million bushels. This facility principally handles locally sourced barley. Riverland Ag also sources, stores and merchandises barley through a number of its Upper Midwest facilities.
Over the last few years, Riverland Ag has deepened its customer relationship with Briess Industries, North America’s leading producer of specialty malts and value added ingredients for the brewing, distilling, food and pet food industries.
Under the strategic sourcing relationship, Briess Industries will acquire the Ralston elevator facility including the Powell, Wyoming seed plant for US$ 12.4 million. Riverland Ag will manage the facility on behalf of Briess Industries for a minimum of three years. The majority of the facility’s barley shipments will be to Briess Industries, with the balance being sold to the facility’s other existing customers. Riverland Ag will receive a monthly management fee and a contingency payment of between $1.125 million and $1.5 million in 2016 subject to certain contracted barley targets being met. Processing of sales to the facility’s other customers will be to the account of Riverland Ag. Briess will assume the majority of the working capital obligations of the facility going forward, and will continue to be an important customer of Riverland Ag’s U.S. Upper Midwest facilities. Ceres will recognize a gain on the sale of the two facilities in the fourth quarter. Closing of the transaction is expected on or before March 15, 2013
“We are pleased to be taking our longstanding relationship with Briess to the next level – this strategic sourcing relationship maximizes the long-term value to both parties of the Ralston elevator and reflects the strategic value inherent in our Riverland Ag assets”, said Michael Detlefsen, President of Ceres and Executive Chairman of Riverland Ag.
“We are delighted to be working closely with Riverland Ag on our barley sourcing requirements and to be securing a long-term supply of malting barley in one of the top barley growing regions in America,” said Gordon Lane, President of Briess Industries.
Craig Reiners, the President & CEO of Riverland, added, “Our deeper strategic relationship with Briess will further enhance the upstream relationships we have built with the farmers of Wyoming and Montana, and will increase the utilization of several other Riverland assets in the Upper Midwest”.
About Ceres Global Ag Corp. (ceresglobalcorp.com)
Ceres Global Ag Corp. is a Toronto-based corporation with two main operating divisions: its Grain Handling and Storage unit, anchored by its 100% ownership of Riverland Ag Corp.; and its Commodity Logistics unit, containing its 25% interest in Stewart Southern Railway Inc. and its development of the Northgate, SK Commodity Logistics Hub. Ceres also has significant capital available to invest in these and related businesses. Riverland Ag Corp. is an agricultural grain storage and handling and supply chain business operating 12 grain storage facilities in Minnesota, North Dakota, New York, Wisconsin and Ontario having aggregate storage capacity of approximately 51 million bushels. Stewart Southern Railway Inc. is a short line rail company that operates in Southeastern Saskatchewan as our commodities logistics division. The Northgate Commodity Logistics Hub is a $90 million grain, oil and oilfield supplies transloading site being developed in conjunction with Scoular Grain and several energy company partners, connected to the Burlington Northern Santa Fe Railroad and expected to open in the fall of 2013. Ceres common shares trade on the Toronto Stock Exchange under the symbol “CRP”.
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