NutraCea to expand in Asia
June 25, 2007
by FoodBusinessNews.net Staff
PHOENIX — NutraCea has entered the commercial food ingredient market and is expanding humanitarian aid programs in Southeast Asia by forming a joint venture with an Indonesian industrialist affiliated with PT Panganmas Inti Persada.
Both NutraCea and the partner will contribute $5 million to a limited liability company and will equally share revenues and profits from sales. NutraCea also will receive a $5 million licensing fee on five-year terms to use its proprietary stabilization technology in addition to the possibility of an additional $5 million on the achievement of some liquidity events by the joint entity.
"We believe Southeast Asia represents a tremendous opportunity to grow our business, where our raw material — rice bran, a nutrient-rich by product of the rice milling industry — is abundant, and we look forward to working with our partner to build our venture into a formidable provider of SRB products in the region," said Brad Edson, president and chief executive officer of NutraCea. "We view the Indonesia agreement as an important first step in the beginning of a broader initiative to expand NutraCea’s SRB technology throughout Asia."
The venture makes possible the opportunity for NutraCea to manufacture, market, import and distribute products in Indonesia, Thailand, Vietnam, Malaysia, Singapore, Australia and New Zealand.
P.T. Panganmas Inti Persada plans to blend SRB into wheat flour and include the combined product into cookies, cereals, bread, pastries, noodles, cakes and other wheat-based foods, which will improve the fiber and nutritional content of its products.
"We are extremely pleased to combine our resources in a manner that creates opportunities to greatly expand the business prospects of both companies and also provide solutions to the ever present and growing problem of malnutrition in Indonesia and surrounding developing countries," said Agus Irawan, founder of P.T. Panganmas Inti Persada.
The first SRB facilities will be in Indonesia and Thailand, and construction is expected to begin within six months. NutraCea plans on exporting its line of SRB products from the United States to Southeast Asia during the build out phase.
The countries identified in this venture produce annually more than ten times of ran bran than the U.S. and E.U. produce combined.