CHS Inc. (NASDAQ: CHSCP), the nation's leading producer-owned cooperative, and Iowa-based Consumers Supply Distributing Co., announced today they will form a livestock and pet food manufacturing and wholesale distribution company.
The new entity will be called Consumers Supply Distributing, LLC, and will be based at Sioux City, Iowa. It will offer the CHS Payback® livestock and Equis® horse feed brands, along with the broad range of livestock and companion animal products currently carried by Consumers Supply Distributing, including its Running Horse® brand equine feed and Ranchers Choice® and Country Vet® brand pet foods and treats.
"This is an outstanding opportunity to combine two strong, high quality feed organizations to meet the livestock and companion animal nutrition needs of our current customers, as well as position this business for growth," said Rod Paulson, general manager, CHS Nutrition.
David Patee, owner and operator of Consumers Supply Distributing, said partnering with CHS "allows us to expand our business with an established feed company with a growing presence throughout the central and northwest United States."
Patee will serve as the new limited liability company's manager.
Paulson said the new entity allows CHS to enter the pet food manufacturing sector and to gain greater distribution efficiencies and economies of scale. CHS Nutrition currently operates 11 feed manufacturing plants – along with a premix plant in Shenandoah, Iowa, and a liquid feed plant Marshall, Minn. -- which serve the ration needs of all livestock species through its Payback and Equis brands. It also provides feed formulation and livestock leasing and risk management services. CHS will retain feed manufacturing and distribution operations independent of the new entity.
Consumers Supply Co., a wholesale distributor of agricultural and animal nutrition products since 1956, serves the livestock industry with feed ingredients, amino acids, pharmaceuticals, premixes and specialty products. It operates out of more than 310,000 square feet of storage space at Sioux City and Cedar Rapids, Iowa. It also operates a fleet of 53 semi tractors and 100 vans that provide weekly delivery service to 1,000 customers, including local cooperatives, feed manufacturers, farm store chains and large integrators.
CHS Nutrition, which will remain separate from the newly formed entity, will pay cash for its 50 percent ownership of the LLC. Consumers Supply Distributing will contribute its assets at its two Iowa locations. The LLC will have a six-person board of directors, with three representatives from each of the owners.
CHS Inc. (www.chsinc.com) is the nation's leading cooperative, owned by farmers, ranchers and co-ops across the United States. A diversified energy, grains and foods business and a Fortune 100 company, CHS is committed to providing the essential resources that enrich lives around the world. CHS supplies energy, crop nutrients, grain, livestock feed, food and food ingredients, along with business solutions including insurance, financial and risk management services. The company operates petroleum refineries/pipelines and manufactures, markets and distributes Cenex® brand refined fuels, lubricants, propane and renewable energy products. CHS preferred stock is listed on the NASDAQ at CHSCP.
This document contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 that are based on management's current expectations and assumptions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. The company undertakes no obligations to publicly revise any forward-looking statements to reflect future events or circumstances. For a discussion of additional factors that may materially affect management's estimates and predictions, please view the CHS Inc. annual report filed on Form 10-K for the year ended Aug. 31, 2011, which can be found on the Securities and Exchange Commission web site (www.sec.gov) or on the CHS web site www.chsinc.com.
CONTACT: Lani Jordan of CHS Inc., +1-651-355-4946, [email protected]