Narula Group, RiceBran announce partnership for rice bran, other products

US-BASED RiceBran Technologies (RIBT) has recently entered into a partnership with the Narula Group of Companies in Thailand covering an exclusive strategic supply agreement for organic rice bran and an LLC Agreement for the formation of a jointly owned sales and marketing entity.

The agreement will enable RIBT, a global leader in the production and marketing of value added products derived from rice bran, to gain exclusive worldwide supply and distribution rights for organic jasmine rice bran and organic rice bran from other rice varieties produced by the Narula Group. The Bangkok-based Narula Group, which is controlled by social impact entrepreneur Arvind Narula, is one of the world's largest growers of organic rice.

Under the agreement, the exclusive territory does not include certain Southeast Asian markets, Germany and the United Kingdom, which will continue to be serviced by Narula Group.  

Rice bran (Photo: Pikkystock I Dreamstime.com)

RIBT will purchase organic rice bran from the Narula Group at an agreed price. It will provide the Narula Group with a portion of the achieved margin earned on the sale of products derived from that organic rice bran.

The Narula Group has agreed to accept the first $2.66 million of its Achieved Margin Share through the issuance of 950,000 shares of RIBT's common stock at a fixed purchase price of $2.80 per share ("Margin-for-Shares Mechanism"). This represents a premium of 52% to the closing price on the date immediately prior to signing. Earned shares will be released from escrow on a quarterly basis as the Narula Group earns RIBT common stock through the Margin-for-Shares Mechanism until the Achieved Margin Share is sufficient to purchase all 950,000 shares.  

Joint venture for non-rice brand products

A joint-venture company is being set up to market the Narula Group's non-rice bran products such as organic chia, kale, and coconut water and coconut products in North America. The JV is 55% owned by RIBT and 45% by the Narula Group.

Both companies hope to bring additional organic products to North America in the near future. Results for their new JV will be consolidated into RIBT's financial statements, with profits to be shared on a proportional ownership basis.