Milling & Baking News - March 10, 2009 - 11

Venezuela government takes steps
to expropriate Cargill rice mill
CARACAS, VENEZUELA - Reacting to steps aimed at expropriating
a rice mill owned by the company,
Cargill Inc. was working with government officials in Venezuela last
week to avert the takeover.
Mark Klein, a spokesperson for
Cargill, said representatives of the
government were in Cargill's rice
mill on March 5 as part of a process
of taking control of the mill.
The pending takeover is in response to allegations Cargill has circumvented price controls imposed
by the government on white rice.
Venezuela's
president
Hugo
Chavez said the plant, located in
Turen-Piritu Portuguesa state, violated local laws by distributing rice
without printing the regulated price
on its packages. He directed Agriculture Minister Elias Jaua to "begin
the expropriation process."
"Prepare the decree and we'll expropriate Cargill," Mr. Chavez said.
The action comes several months
after Mr. Chavez publically threatened to nationalize food companies. Inflation in Venezuela, at 31%,

is the highest in Latin America.
Tensions over Cargill's rice pricing rose following threats by
Mr. Chavez to
nationalize Venezuela's largest
food producer,
Empresas Polar.
Polar has been
accused of circumventing the
rice price controls by intro- Chavez
ducing
valueadded product such as flavored rices,
e.g., with chicken flavor added.
Mr. Klein said Cargill has never produced white rice at its mill. Instead,
the company consistently has produced parboiled rice there, he said.
"Cargill is committed to the
production of food in Venezuela that complies with all laws
and regulations," he said. "The
rice mill was designed exclusively to manufacture parboiled rice,
which the company has done at
this site for the last 7 years and

elsewhere in the country for 13
years. Cargill expects the opportunity to clarify the situation with the
government and is respectful of the
Venezuelan government decision."
Venezuela is one of 14 countries
in Latin America in which Cargill
has a presence. Its 2,000 employees
in Venezuela account for well under
10% of the company workforce in
Latin America (exceeding 30,000).
Cargill has 160,000 employees
worldwide.
Mr. Klein said Cargill has a relatively modest position in the Venezuelan rice market, with a market
share well beneath 5%. On the other
hand, the company operates several
other businesses there. Cargill runs
2 offices in Caracas as well as 13
manufacturing facilities and 7 commercial branches in Venezuela.
In addition to rice, its branded
products in Venezuela include edible
oil, pasta, flour, cookies, fruit juice,
pet foods and animal nutrition.
Cargill's first acquisition in Venezuela was the 1986 purchase of
Agroindustrial MiMesa (a pasta and
flour business) in Maracaibo. Since
then, the company has made several
additional acquisitions while also expanding through organic growth. MBN

Fleischmann's, I.C.S. to align under
new corporate banner
CHESTERFIELD, MO. - Fleischmann's Yeast and Innovative Cereal Systems (I.C.S.), which are both
part of AB Mauri Food Inc., announced they will align under the
new corporate banner of AB Mauri

Fleischmann's effective Sept. 1.
According to the company, the alignment of strategies under one banner is
a natural evolution for the business.
"In recognition of the unique business model that Innovative Cereal

MGPI lenders extend credit deadline
ATCHISON, KAS. - MGP Ingredi- ultimate goal of repaying the lenders.
MGPI said it now expects a princients Inc. in a March 3 filing with the
Securities and Exchange Commission pal stockholder to make a $2 million
said its lenders have extended the secured loan to the company, contingent on several conditions,
deadline for taking action
including the consent of
on the company's default on
lenders under the credit faits credit facility to March 13
cility and the agreement of
from Feb. 26.
lenders under the facility to
In the filing, MGPI said its
lenders reduced the amount CREATING BETTER SOLUTIONS...NATURALLY extend the credit facility's
forbearance period to at
they would lend the company under the credit agreement to least Sept. 3.
Also as part of the S.E.C. filing, MGPI
$40 million from $44.7 million and required MGPI to submit to the lenders said its executive officers and certain
an operating plan by March 6 outlin- other executives have agreed to defer
ing how the company intends to im- a portion of their base salaries, up to
prove its financial position with the 50%, until June 30. MBN

bakingbusiness.com / world-grain.com

Systems delivers, we will continue
to commercially support the existing
model with I.C.S. as a sub-brand of
AB Mauri Bakery Ingredients," said
Andrew Armstrong, president of AB
Mauri Fleischmann's. "Our goal is to
continue to build on the product and
service offerings that focus on innovative bakery process optimization and
ingredient value solutions."
AB Mauri acquired I.C.S. in 2005.
The company then operated as a standalone business until it formally reported into AB Mauri Food Inc., effective
September 2007.
The new combined company, AB
Mauri Fleischmann's, provides yeast
and baking ingredient technology.
The company has five manufacturing
plants in North America and sells yeast
under the Fleischmann's Yeast brand
name and bakery ingredient solutions,
including enzyme solutions, powdered
dough improver systems, tablet dough
improver systems, leaveners, mold inhibitors, syrups and malts, vinegars
and acidulants, under the AB Mauri
brand name. AB Mauri operates from
more than 43 locations in 28 countries
with its global headquarters in the
United Kingdom. MBN
Milling & Baking News

March 10, 2009 / 11

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Milling & Baking News - March 10, 2009

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