NutraCea is a world leader in stabilized rice bran or SRB, technology and nutrient research, announced on Friday, Feb. 22 that it has completed the purchased the 70,000 ton annual capacity facility located in Pelotas, Brazil for approximately $14 million and with the opportunity to sell rice bran oil in addition to other patented stabilized rice bran and stage two secondary products into the Brazilian and global marketplace.
On February 4th, NutraCea announced its intent to purchase the facility, subject to closing conditions, which have now been fulfilled. While spending $14,080,000 for outstanding equity interests in Irgovel, they, in addition provided capital as needed to fund approximately $5.3 million in installment payments own by Irgovel to the Brazilian government for deferred tax obligations over a period of 10 years.
NutraCea future projects include upgrades; installment of proprietary equipment into the 40 year old Irgovel plant is operating at about one-third of its full capacity. They expect to complete this project by the end of 2008, spending approximately $4 to $6 million to refurbish.
Chief Operating Officer of NutraCea, Leo Gingras said, “When running at full capacity, we believe that the plant can generate approximately $30 million in annual sales from 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.”
President and Chief Executive Officer of NutraCea, Brad Edson 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.”
Edson adds, “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.”
Dr. Adolfo Fetter Junior, Mayor of Pelotas, Brazil said, “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.”
Irgovel with a population of approximately 350,000 is located in the third largest city in the southern state of Rio Grande do Sul. NutraCea will be one of the largest employers in the area and may be a major contributor to the local economy.
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