NutraCea Completes Purchase of Irgovel, Largest Rice Bran Oil Processing
Facility in South America
PHOENIX, Feb. 22 /PRNewswire-FirstCall/ -- NutraCea
(OTC Bulletin Board: NTRZ), a world leader in stabilized rice bran (SRB),
nutrient research and technology, announced today that it is has completed the
purchase of Irgovel, the largest rice bran oil processing facility in South
America, for a purchase price of approximately $14 million. The 70,000 ton
annual capacity facility located in Pelotas, Brazil provides NutraCea with the
opportunity to sell rice bran oil in addition to its entire portfolio of
patented and proprietary stabilized rice bran and stage two derivative
products into the Brazilian and global marketplace.
NutraCea announced its intent to purchase the facility on February 4th
subject to certain closing conditions, which have now been satisfied. The
Company paid $14,080,000 for all of the outstanding equity interests in
Irgovel. In addition, the Company may provide capital to Irgovel as necessary
to fund approximately $5.3 million in installment payments owed by Irgovel to
the Brazilian government for deferred tax obligations. These deferred tax
amounts are payable over a period of 10 years.
The 40 year old rice bran oil facility is the largest in South America.
Currently, the plant is operating at about one-third of its capacity.
NutraCea anticipates investing approximately $4 to $6 million to refurbish,
upgrade and install their proprietary equipment into the facility and expects
to complete this project by the end of this year.
"When running at full capacity, we believe that the plant can generate
approximately $30 million in annual sales from the rice bran oil. As
previously announced, NutraCea will install its proprietary technology during
2008 to improve the dynamics of the traditional rice bran oil extraction
business for the production of higher value-added derivative products. We
anticipate these new derivative products could result in meaningful additional
revenue, beyond what is stated above, beginning in 2009," said Leo Gingras,
Chief Operating Officer of NutraCea.
NutraCea has entered into marketing arrangements, which it believes will
allow the Company to sell the plant's current production capacity as well as
all future expanded production.
Brad Edson, President and Chief Executive Officer of NutraCea said, "We
are extremely pleased to have completed this transaction, which is a
significant next step in our strategic growth plan to establish facilities in
leading rice bran producing regions of the world in order to further grow our
market presence and increase shareholder value."
"We have spent a great deal of time in discussions with members of the
Brazilian government on many levels over the past two years and are most
appreciative of the positive reception that we have received and the co-
operation we have obtained," added Edson.
"Pelotas is a recognized agro-industrial city in our country. I'm
confident NutraCea will help us increase this sector. Therefore, we are very
pleased that NutraCea has found us and come to be a part of our economy,"
stated Dr. Adolfo Fetter Junior, Mayor of Pelotas, Brazil.
Irgovel is located in the third largest city in the southern state of Rio
Grande do Sul with a population of approximately 350,000. NutraCea will be one
of the largest employers in the area and, as a major potential contributor to
the local economy, has been enthusiastically welcomed by local, state and
federal governments.
About NutraCea
NutraCea is a leader in stabilized rice bran nutrient research and dietary
supplement development. Through its wholly owned subsidiary RiceX, the company
manufactures as well as distributes products and food ingredients made from
Rice Bran through its proprietary technology and processes. The Company has
developed intellectual properties and created a range of proprietary product
formulations, delivery systems and whole-food nutrition products. NutraCea's
proprietary technology enables the creation of food and nutrition products
from rice bran, normally a wasted by-product of standard rice processing. In
addition to its whole-foods products, NutraCea develops families of health-
promoting "nutraceuticals," including natural arthritic relief and
cholesterol-lowering products. More information can be found in the company's
filings with the SEC and you can visit the NutraCea web site
http://www.NutraCea.com
Forward Looking Statements
This release contains forward-looking statements, including, but not
limited to, statements regarding the successful operation and improvement of
the rice oil facility in Brazil and the market demand for the material to be
produced at the facility, all of which statements are subject to market risks,
and the possibility that NutraCea will not be able to complete the plant
modifications on a timely basis, to operate the plant efficiently, or to
obtain sufficient customer demand to utilize expected production from the
plant. These statements are made based upon current expectations and actual
results may differ from those projected due to a number of risks and
uncertainties. The Company does not undertake to update forward-looking
statements in this news release to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
information. Assumptions and other information that could cause results to
differ from those set forth in the forward-looking information can be found in
the Company's filings with the Securities and Exchange Commission, including
the company's most recent periodic report.
Company Contact:
Margie Adelman
Senior V.P. NutraCea
602-522-7551
madelman@nutracea.com
Investor Relations Contact:
Marilynn Meek
Financial Relations Board
212-827-3773
mmeek@frbir.com
SOURCE NutraCea
Margie Adelman, Senior V.P. of NutraCea, +1-602-522-7551,
madelman@nutracea.com; or Investor Relations, Marilynn Meek of Financial
Relations Board, +1-212-827-3773, mmeek@frbir.com, for NutraCea
