Safe Harbour Statement Certain statements contained herein constitute forward-looking statements that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Fund. Forward-looking statements may contain such words as “anticipate”, “believe”, “continue”, “could”, “expects”, “intend”, “plans”, “will” or similar expressions suggesting future conditions or events. Such forward-looking statements reflect our current beliefs and are based on information currently available to us. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking statements, including changes in national and local business conditions, crop yields, crop conditions, seasonality, industry cyclicality, volatility of production costs, commodity prices, foreign exchange rates, and competition. These risks and uncertainties are described under “Risks and Uncertainties” in our Annual Report and our Annual Information Form. Although the forward-looking statements contained herein are based on what we believe to be reasonable assumptions, we cannot assure readers that actual results will be consistent with these forward-looking statements and we undertake no obligation to update such statements except as expressly required by law.
Agenda 11:00am Presentation- Consolidation & Aeration 11:30am Plant Tour- Aeration 12:00-1:00pm Lunch 1:00-1:30pm Presentation- Twister Greenfield Expansion 1:30-2:00pm Plant Tour- New Bin
Edwards Group Background � Founded in 1964 � Acquired Grain Guard product line in 1991 � Acquired Keho product line in 2002 � The Edwards Group was acquired by Ag Growth in 2005 - Purchase price of $20 million; multiple approx 5x. � Twister product line added in 2007
Aeration
Aeration - Advantages � Demand created by the need to condition grain – ability to reduce moisture levels � Value component for customers – reduce loss through spoilage and retain weight � Ability to harvest sooner reducing risk of frost/weather � More days to harvest
Natural Air Grain Drying If the fan is stopped, the drying front will stall and if left without air for too long this high moisture area of grain can heat, form a mass and deteriorate in quality.
Aeration – Business Drivers � Demand for aeration related to storage practices � Increased demand results from excessive moisture/late harvest � Adoption curve – Growing percentage of farmers have adopted aeration – Most bins now shipped with aeration
Aeration – Grain Guard/Keho � Dominant Canadian market share � Double branding � Diverse customer base: – Viterra – Flamans – Federated Co-op – United Farmers of Alberta – Independent dealers
Grain Guard & Keho Aeration Fans � 3-year warranty � Baldor motors � Single or three-phase available � All fans are tested before being shipped � Price ranges from $1,500 - $3500 (MSRP)
Low Temp Heaters Price aprx $1,000 (MSRP)
Horizontal Aeration Tubes � 18” & 24” Diameters � 2’ & 4’ lengths with connecting collars � 6’ & 8’ lengths with solid end caps � Can be joined together to accommodate larger diameter bins � Price aprx $500 (MSRP)
Installed in Hopper Cone Current Rocket Price ranges from $1,600 - $6,000 (MSRP)
New Retro Rocket for 2011 � New Retro-Rocket can be installed in erected corrugated or smooth-wall bins � Patented design allows for customer installation – 30 minute install � Price ranges from $3,500- $4,500 (MSRP)
Edwards Consolidation � In December 2010, we consolidated the Lethbridge and Nobleford operations into one manufacturing facility � New Nobleford Manufacturing Facility: - 25,000 sq ft facility expansion - 2 large Fan/Heater Assembly Lines - Full Rocket/Tube Production and Assembly Area - 2 x Indoor staging areas with indoor loading capability for flatbed trucks, along with loading docks for vans and containers
Old & New Plant
2011 – New World Class Bin Plant
Twister History � Founded in Calgary, 1976 � Acquired by Ag Growth in 2007 – Purchase price of $8.2 million – Turnaround situation � Moved to Nobleford in 2008 � Lean manufacturing implemented in 2009 � Greenfield bin plant expansion commenced 2010
Twister - 2007 � Small, regional player � Limited product line � Old equipment/limited capacity
Acquisition Rationale � Storage bins very complementary to existing AGI product lines – not a matter of “if” but “when” � Smaller acquisition lowered risk as AGI learned storage bin markets and production � Allowed AGI to test bundling concept in certain situations in Eastern European
Rationale for Bin Line Expansion � Product line expansion needed for new offshore market development � Bundle with commercial products � Domestic competitive pressures � Global sales opportunities � Desire to increase capacity, quality and efficiency
New Factory Overview � 75,000 square foot Greenfield construction � Complete new equipment lines - Bin wall - Roof – fully automated, structural design - Floor planking machine - Roll formed stiffener line - Bradbury USA design, manufacture and install - CNC controlled
New Factory Overview � 30,000,000 lb steel processing capacity (single shift) - Equates to sales of $50 - $70 million depending on price of steel and product mix � Single shift 10 -15 people � Fully enclosed loading for ocean containers
Lean – High Throughput Layout
Old Equipment
Franklin Enterprises � Key role in storage bin expansion - Prototyping parts for new bin design - Production of labour intensive components - Better suited for ebbs/flows of component manufacturing allows AGI to maintain efficiencies at Edwards
Canadian Landscape � Small diameter bins, highly segregated storage � Westeel dominant player with approx 70% market share � Twister market share approx 10% � Trend is towards larger storage bins
International Landscape � Increased global investment in agriculture � Demand from large corporate farms and commercial infrastructure � Sustainable opportunity as world increases focus on food production and security
International Sales Activity 2011
Examples of Worldwide Installations Kazakhstan Australia
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