June 26, 2008
NutraCea Signs Landmark Definitive Agreement With Bright Food Investment Co., A Subsidiary of Bright Foods Group, to Build World’s Largest Rice Bran Oil Refinery
PHOENIX, June 26 /PRNewswire-FirstCall/ -- NutraCea (BULLETIN BOARD: NTRZ) , a world leader in stabilized rice bran (SRB), nutrient research and technology, today announced that it has signed a definitive agreement with the Bright Food Investment Group a subsidiary of Bright Food Group ("Bright"), China's largest food conglomerate to build the world's largest rice bran oil refinery. The new rice bran oil refinery will process an estimated 500,000 metric tons of raw rice bran annually to produce rice bran oil, new patent-pending defatted rice bran and stabilized rice bran, all of which will be used in a wide range of food applications.
Brad Edson, President and Chief Executive Officer of NutraCea said, "We have forged a very important relationship with Bright, which further strengthens our company's global prospects. The size and scale of this agreement presents a major opportunity for NutraCea to enter China's vast market and introduce rice bran oil, our new patent pending defatted rice bran and stabilized rice bran to one of the world's most vibrant economies.
Bright's President, Cao Shumin commented, "We are pleased to announce the selection of NutraCea as a partner in this important business venture. We believe our mutual business goals are in complete alignment with Bright's vision to provide healthier and higher quality food to the public. We look forward to implementing this and future projects with NutraCea."
According to the terms of the agreement, NutraCea will provide 80 percent of the capital and retain 72 percent of the ownership and profits of the venture. Bright Group and a strategic advisor to the venture will contribute 20 percent of the capital and receive 28 percent of the profits.
The facility, upon completion in 2010, will be the world's largest rice bran oil and rice bran derivative manufacturing plant with capacity to produce in excess of $200 million in annual gross revenues based on today's market prices. The basis for this venture is the implementation of NutraCea's proprietary stabilization technology, which will reduce production costs of the rice bran oil while increasing the yield and enhancing the nutritional profile of the end products. In addition, NutraCea and Bright Food Group anticipate the future construction of additional facilities of similar size. The agreement between NutraCea and Bright requires normal and customary government approval by the People's Republic of China and is not anticipated to cause any delays.
"Bright Food Group prides itself on bringing healthful and nutritional products to market that can improve quality of life. Rice bran oil is one of the healthiest edible oils in the world. Our partnership with NutraCea aims to become a leader in the manufacturing and distribution of rice bran oil and other rice bran based products. We are pleased to be able to bring together this important co-operative venture between the two companies. China's economy is experiencing dramatic growth, as is the Bright Group. Bright is China's largest food conglomerate and distributes products to more than 50,000 retail outlets," said Cao Shumin.
Edson stated, "We are currently assessing several potential funding options available to NutraCea and will choose the one that makes the most sense and will be in the best interest of the company and its shareholders within the next 90 days."
Edson noted that Leo Gringas, NutraCea's Chief Operating Officer, would be spearheading the company's effort in China. "Leo has more than twenty years of experience in rice bran oil technology and his substantial expertise will enable us to capitalize on burgeoning consumer interest worldwide in healthy edible oils."
Leo Gingras said, "NutraCea's proprietary technology is the cornerstone to this important business venture and has the capacity to significantly reduce the operating costs, and improve the nutritional profile of the rice bran oil. Furthermore, the defatted bran, which we recently filed patents for and our patented stabilized rice bran are highly marketable in China and significantly increase the value of our intellectual property portfolio. I'm eager to deploy our technology and implement it on this scale."
About Bright Food Group Ltd.
The Bright Food Group is China's largest food industry group company. In 2007, Bright's revenue amounted to 66 billion RMB. Bright's main service includes agricultural, food and beverage manufacturing, channel distribution, logistics, and retail point of sales. With over 4,000 directly owned retail outlets and serving over 50,000 other retailers, Bright is the largest distributor in China. Bright is one of the market leaders of dairy products, rice wine, and sugar. Under its flagship, it has four listed companies, all publicly traded on the Shanghai Stock Exchange. They are Bright Dairy & Food Co. (SHA: 600597), Shanghai First Provisions Store Co. (SHA: 600616), Shanghai Haibo Co. (SHA: 600708), and Shanghai Maling Aquarius Co. (SHA: 600073).
NutraCea (BULLETIN BOARD: NTRZ) is a world leader in the stabilization of rice bran. The Company applies its proprietary and patented technologies during the rice-milling process to stabilize the rice bran, which it then uses to manufacture ingredients and products that it distributes to a growing roster of customers around the world. NutraCea's products include nutritious, high-quality ingredients for human and animal food companies; nutraceuticals that promote health; rice bran oil, and nutrient-dense rice bran products for humanitarian feeding efforts. The Company also has a growing market position in the stabilization and distribution of wheat bran, and it is increasingly engaged in the production of healthy edible oils and derivative products. NutraCea is headquartered in Phoenix, Arizona, U.S.A., and it has more than 300 employees. For more information on NutraCea, please visit the Company's website at http://www.nutracea.com/.
This release contains forward-looking statements, including, but not limited to, statements regarding the successful establishment of the rice oil refinery in China, the anticipated production capacity of the rice oil refinery, the anticipated production costs, capacity and yield from the rice oil refinery, the future construction of additional facilities, NutraCea's success at implementing this and any other global transactions, the ability of NutraCea to preserve or increase the value of its intellectual property portfolio, and the impact of these transactions on future revenues, all of which statements are subject to many market, governmental regulation, and other risks. These statements are made based upon current expectations and actual results may differ from those projected, due to various 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 reports.
Media Contact: Margie Adelman Senior V.P. NutraCea 602-522-3000 916-220-3500 cell [email protected] Investor Relations Contact: Marilynn Meek Financial Relations Board 212-827-3773 [email protected]
CONTACT: Margie Adelman, Senior V.P. of NutraCea, +1-602-522-3000, cell,+1-916-220-3500, [email protected]; or Investor Relations, Marilynn Meekof Financial Relations Board, +1-212-827-3773, [email protected], for NutraCea
Web site: http://www.nutracea.com/