World Grain - December 2008 - 10

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AWB in merger discussions with ABB Grain
MELBOURNE, AUSTRALIA - AWB Ltd. on Nov. 28 announced that
it is in discussions regarding a possible merger with ABB Grain Ltd. The
former wheat export single desk holder said the discussions are ongoing.
The transaction will only progress if appropriate terms can be agreed and
due diligence is completed to each party's satisfaction.
AWB said that if agreed upon, any merger would proceed by way of
a scheme of arrangement and would be subject to shareholder, court
and regulatory approvals and other conditions agreed by the parties.
AWB announced on Nov. 19 that it posted a net profit increase for the
year ended Sept. 30 of 137% to A$64.3 million from A$37.2 million
the previous year. AWB's revenue increased 47% to A$6.8 billion.
"This is a strong result, particularly in light of commodity price
volatility, variable weather conditions and regulatory change," said
Peter Polson, chairman of AWB Limited. "The full-year result was
pleasing in a challenging environment and structural reform of the
company over the past 12 months ensures the company is well positioned for future growth. We have reformed the structure of the AWB

Group with a new commercial governance structure, new board and
improved risk framework."
AWB Managing Director Gordon Davis said all three core divisions of the Group increased profits, with Landmark Rural Services
achieving a record result with a clearer strategy and the business focused on investing in growth.
"The Australian Commodities division performed strongly, and
there was a mixed result in the International Commodities business,"
he said.
Davis said AWB is pleased with its performance under the new
wheat marketing arrangements, as their wheat pools were well supported by Australian farmers. He noted the company also has made
significant inroads into executing its marketing strategy to get the
best possible returns for pool participants.
"Our overall strategy remains to increase shareholder returns by
continuing to rebuild and grow the business domestically and internationally," he said.

Russian grain harvest largest in 15 years
MOSCOW, RUSSIA - Russia's Agricultural Minister Aleksey
Gordeev reported Oct. 8 that Russia has harvested slightly more than
100 million tonnes of grain, the highest total in 15 years, he said. An
average yield of 2.2 tonnes per hectare was also reported, which is a
record grain yield in Russia.
The U.S. Department of Agriculture's (USDA) Foreign Agricultural Service (FAS) raised Russia's total grain production forecast by
3.5 million tonnes to 100.4 million tonnes based on harvest progress.
Wheat production forecast was at 61.5 million tonnes, and barley
production was forecast at 21.6 million tonnes. The country's corn
production forecast remained at 5.6 million tonnes.

The FAS decreased Russia's grain exports forecast by 1.5 million
tonnes to 16 million tonnes because of strengthened competition in
the world grain markets and because of financial problems among
Russian grain traders. Wheat exports were forecast at 13.8 million
tonnes and barley exports were 2.1 million tonnes.
The global financial crisis has affected Russia's domestic credit
market and raised the U.S.-dollar-to-Ruble exchange rate. The FAS
said the effect of these changes on exports and consumption of Russia's grain in MY 2008 is not yet obvious. However, the FAS is beginning to see a shortage of working capital in all segments of grain
industry, including transportation, storing, handling and processing.

Prodkorporazia expands chain of grain terminals
ASTANA, KAZAKHSTAN - The Food Contract Corporation
(Prodkorporazia, Kazakhstan's operator of grain procurements to the
state reserve) plans construction of grain terminals in Ukraine and on
Kazakhstan's border with China.
"Grain terminals will be constructed on the border with China with
capacity of 500,000 tonnes annually and in a Black Sea port in Ukraine
with capacity of one million tonnes annually in order to bolster devel-

opment of grain export infrastructure," Alikhan Smaiplov, chief executive officer of KazAgro national holding, told attendees at an international agrarian investment forum in Astana, Kazakhstan on Oct. 23.
He said the feasibility study will be ready next year. Smaiplov
indicated that KazAgro's subsidiary company, Food Product Corporation, is in charge of implementing these projects on behalf of
Kazakhstan.

Titan to build grain processing complexes
OMSK, RUSSIA - Titan-Kuban, a subsidiary of Omsk, Russia
oil and gas corporation Titan, plans to build two large agricultural
complexes for grain processing in the Krasnodar region of Russia
by spring 2011.
The company estimated the project will cost €450 million ($700 million). The complexes will include crop land, grain elevators, mills, combined feed plants, poultry farms, two pig complexes for 108,000 head
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each, a refrigerated slaughter-house and a meat-processing plant.
The company said grain processing capacity will reach 1 million
tonnes per year. Corn oil, high-maltose and confectionary syrup,
combined feed, oil for food, carbon dioxide and bio-butylene will be
produced from grain at the enterprises. Titan said up to 60% of the
bio-butylene produced will be consumed by the group's companies
and the remainder will be exported.
December 2008 / World Grain / www.World-Grain.com

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World Grain - December 2008

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