Alliance Grain Traders Announces Expansion into South Australia with Agreement for the Acquisition of Assets of Balco Grain Services

REGINA, AUG 30, 2010 - Alliance Grain Traders Inc. (TSX: AGT) (“AGTI”) is pleased to announce that it has entered into a letter of intent to acquire all of the assets of Balco Grain and certain real property from Balco Holdings (collectively, “Balco”), located at Bowmans, South Australia. The assets to be acquired include real property, vertical and horizontal storage for pulses and grains and related handling equipment. Bowmans is located approximately 95 km from Adelaide. The cash acquisition price and planned capital expansions and improvements in South Australia are valued at approximately $10 million CDN. The new company will be owned and operated by AGTI’s wholly owned subsidiary, Australia Milling Group PTY.

 

The Balco facility to be acquired by AGTI is adjacent to the Bowmans Inland Container Terminal, South Australia’s first inland container terminal operated by Patrick Portlink SA (“PPSA”). The PPSA operated facility arranges container supply and transportation using its own rail equipment to and from Bowmans. PPSA also handles all related compliance matters. The integrated container handling depot is served by road and rail, featuring direct rail service connecting the ports of Adelaide and Melbourne on a regular schedule of five days per week. Container trade through the terminal, situated on the Adelaide to Darwin rail line, has grown from 220 containers in July 2003 to approximately 2000 containers a month in 2009.

 

“This acquisition is an excellent platform for our expansion in South Australia. South Australia and the Yorke Peninsula region are generally very reliable production areas for pulses. Historically, the crops are more consistent and yields generally hold up well in cases of drought. The distance between our plant in Victoria and Balco will give AGTI good diversification of our drawing areas and production bases in Australia. This is another strategic ‘tuck-in’ acquisition that will allow us to be operational for what currently appears to be a promising new crop in Australia harvesting late in 2010,” said Murad Al-Katib, President and CEO of AGTI.

 

“This further investment in Australia bolsters our lentil, chickpea and faba bean platforms, allowing us to establish a significant foothold in South Australia. The Port of Adelaide and the location of the Balco site at a major inland container terminal at Bowmans, provide a significant logistical advantage for us. We believe it will allow us to effectively execute our plan of building a sustainable value-added pulses business in Australia,” added Huseyin Arslan, Executive Chairman of the Board of Directors of AGTI.

 

Completion of the 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 September 30, 2010.


Alliance Grain Traders Inc. Profile

Alliance Grain Traders Inc. (AGTI) is a pulse processor and exporter engaged in the business of value- added processing (cleaning, splitting, sorting and bagging) of pulses and specialty crops, for export and domestic markets. Through its processing facilities located in some of the best pulse growing regions in Canada, the U.S., Turkey and Australia, AGTI handles a full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed. Through its subsidiaries in Turkey, the Arbel Group, AGTI also produces Arbella Pasta, rice, and milled wheat products, such as bulgur and semolina.

 

Cautionary Statements

Certain statements in this press release are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by AGTI at the time of preparation, may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of AGTI (including its operating subsidiaries) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of harvests, fluctuations in the price of lentils and other crops, failure of plant, equipment or processes to operate as anticipated, accidents or labour disputes, risks relating to the integration of acquisitions or to international operations as well as those factors referred to in the section entitled “Risk Factors” in the Annual Information Form of AGTI dated March 30, 2010 which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although AGTI has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. AGTI expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.

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