Alliance Grain Traders to buy Northern Yorke Processors

by World Grain Staff
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REGINA, SASKATCHEWAN, CANADA — Alliance Grain Traders Inc. announced on Sept. 7 that it has entered into a letter of intent to acquire all of the assets of Northern Yorke Processors (NYP), located at Kadina, South Australia.

The assets to be acquired include real property, vertical and horizontal storage for pulses and grains, processing plant assets and related handling equipment. Kadina is located approximately 160 km from Adelaide, Australia.

The agreement is in addition to the recent announcement for the acquisition of Balco Grain Services that was announced Aug. 30. The new company will be owned and operated by AGTI’s wholly owned subsidiary, Australia Milling Group Pty Ltd.

"NYP is a key part of our platform expansion in South Australia with its location on the Yorke Peninsula. Along with the Balco site at Bowmans, we now have origination and processing hubs in South Australia’s main production areas and key logistical container advantages to execute our business plan. NYP is ready for operation and will give us processing capacity this year to capitalize on what appears to be a promising 2010 crop while we build out the Bowmans site with new storage and processing assets," said Murad Al-Katib, president and chief executive officer of AGTI.

The NYP transaction will be funded as a part of the C$10 million program previously announced in conjunction with the Balco Grain acquisition. Completion of the NYP transaction is subject to a number of conditions, including certain due diligence to be conducted by AGTI, negotiation of definitive agreements, board approval of AGTI and other customary closing conditions.

The transaction is currently scheduled to close on or about Sept. 30.

AGTI also announced that it has begun construction on two new projects in Turkey with the addition of a new short-cut pasta line at its Arbella processing facility in Mersin, Turkey and the construction of a state-of-the-art rice processing mill near Edirne, Turkey located 220 km from Istanbul in the heart of the Turkish rice production area.

The pasta processing line will add an additional 36,000 tonnes of pasta capacity while the rice mill is planned at 65,000 tonnes annually. Both the pasta line expansion and the new rice mill project are slated for completion in the first quarter of 2011, with a total investment of C$15 million.

"Our Arbella pasta business is on target as we are nearing capacity on the long-cut pasta line we installed in 2009. This new short-cut pasta line will allow us to meet the growing export demand for Arbella in the penne, rigatoni and Arbella Family children’s pasta segments. We are now exporting to over 50 countries and see continued repeat business driving this growth. In the rice segment, we felt the need to have our own facility to truly meet the quality and reliability expectations of our customers. We are millers of commodities into staple foods. Medium grain rice milling is complementary to our pulses milling and durum wheat milling businesses. It shares common technology, know-how and markets. The new mill will be an excellent addition to our growing list of international factories," said Huseyin Arslan, executive chairman of the board of directors of AGTI.

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