NutraCea Begins First Phase of International Expansion into South East Asia Through Joint Venture With Indonesian Industrialist

26/06/07 NutraCea, a world leader in stabilized rice bran (SRB) nutrient research and technology announced it has entered the commercial food ingredient market as well as expanding its humanitarian aid programs in Southeast Asia by forming a joint venture with an Indonesian industrialist affiliated with PT Panganmas Inti Persada, one of the largest wheat milling operations in Southeast Asia.

Under the terms of the agreement, NutraCea and its new partner will each contribute $5 million to a limited liability Company (Joint Entity) and will share equally in the revenues and profits from sales produced by the Joint Entity. In addition, NutraCea will receive a $5 million licensing fee on five year terms, with interest, for use of its proprietary stabilization technology as well as the potential for an additional $5 million on the achievement of certain liquidity events by the Joint Entity. This venture opens the door for NutraCea to manufacture, market, import and distribute its exclusive products in Indonesia, Thailand, Vietnam, Malaysia, Singapore, Australia and New Zealand.

As part of the commercialization process and strategic business plan, P.T. Panganmas Inti Persada intends to blend SRB into wheat flour and incorporate the combined product into various cookies, cereals, breads, pastries, noodles, cakes and other wheat-based foods to improve the fiber and nutritional profile of its product lines, while remaining cost competitive with standard flour products.

Mr. Agus Irawan, Founder of P.T. Panganmas Inti Persada, stated, "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."

The first series of SRB facilities will be located in Indonesia and Thailand, with construction scheduled to begin within 6 months. The plants are projected to be operational within 18 months. During the build out phase, NutraCea will export its line of SRB products, including its proprietary RiSolubles, from the United States to Southeast Asia.

The countries identified in this venture have an annual rice bran production exceeding nine million tons, more than ten times that of the U.S. and EU production combined, representing a major opportunity for NutraCea. "As we advance our mutual business interest in this region, the construction of future plants will be funded from capital sourced directly through the joint venture or project specific financing." said Leo Gingras, Chief Operating Officer of NutraCea.

"We are delighted to work with our new partners in growing our global business interests in Southeast Asia and we believe that our joint expertise in the food industry will give us a solid foundation to be able to provide substantial amounts of SRB and its derivative products to this region of the world," said Brad Edson, President and CEO of NutraCea.

"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. We view the Indonesian agreement as an important first step in the beginning of a broader international initiative to expand NutraCea's SRB technology throughout Asia," added Edson.

"As we advance NutraCea's goal to commercialize its stabilization technology we also remain focused on the vision that our products can make a significant impact on global hunger. This joint venture with our Indonesian partners will assist us in securing initial and potentially on going commitments from various Non-Governmental Organizations, Private Voluntary Organizations and Governments to purchase portions of the production for distribution to large numbers of malnourished children," stated Margie Adelman, Senior Vice President NutraCea. "NutraCea's RiSolubles have multiple applications and have been shown to improve the health of malnourished children in feeding programs," added Adelman.