West Fargo, ND (February 24, 2022) Cargill Inc. (Cargill) formally announced that it will exercise its option to purchase American Crystal’s 50% interest in ProGold LLC (ProGold). As a party to the 2018 Consent Agreement, Golden Growers Cooperative (Golden Growers) will purchase American Crystal’s remaining 1%. The net result is that Cargill and GGC will each own 50% interest in ProGold, LLC.
“We believe this agreement with Cargill offers a bright future for our members,” stated Mark Harless, Golden Growers Chairman. “Our agreement signals a long-term commitment to the Wahpeton community, employees of the facility, and corn producers. For the past twenty-eight years, American Crystal Sugar Company has been our trusted partner. We are so thankful for those years and look forward to a new chapter for ProGold and Golden Growers.”
“This strategic partnership combines the strengths of both parties, paving the way for long-term reliability and viability of corn-based ingredients to supply our customers,” said Mike Wagner, managing director for Cargill’s starches, sweeteners and texturizers business in North America. “We’re proud of our team members who have been instrumental in the success of this operation and our long-standing partnership with ProGold and the local corn growers for the past 25 years. We look forward to exploring new growth opportunities for the facility, including attracting co-location partners to the site.”
Asked about the sale, American Crystal Sugar Company CEO Tom Astrup said, “American Crystal has enjoyed a long, successful partnership with Golden Growers Cooperative and through ProGold, with Cargill. This transaction allows us to focus our efforts on our core business strategies.”
While terms of those agreements are confidential, the following information about them is being released to Golden Growers members and filed with the Securities and Exchange Commission in accordance with regulations.
ProGold will lease the facility to Cargill through December 31st, 2026. For 2022 and 2023, lease payments will be $15,500,000 with ProGold committing $750,000/year to infrastructure maintenance. For 2024 through 2026, lease payments will increase to $16,000,000 with $500,000/year to infrastructure maintenance. During the lease period, Cargill will deploy capital for several approved projects. They will hold a leasehold interest in these capital projects and receive the benefit of depreciation during the lease period.
Under certain conditions, Golden Growers and Cargill may enter into an integrated JV agreement to operate the facility. If Cargill and Golden Growers achieve an integrated Joint Venture agreement, Golden Growers will reimburse Cargill for 50% of the undepreciated capital expense associated with those approved projects. If conditions do not occur OR if Cargill Inc. and Golden Growers are unable to agree on an integrated JV agreement, Cargill will purchase Golden Growers interest in ProGold for $81,000,000 plus half of any remaining lease payments.
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About ProGold, LLC
ProGold LLC was formed in 1994 as a joint venture between Golden Growers Cooperative, American Crystal Sugar Company, and Minn-Dak Farmers Cooperative to build and operate a corn wet milling facility at Wahpeton, ND. After operating the facility for one year, ProGold leased the facility to Cargill. Cargill has continuously leased the facility since that time. In 2003, Minn-Dak sold its interest in ProGold, LLC to American Crystal Sugar Company resulting in an ownership interest of 51% American Crystal Sugar Company and 49% Golden Growers Cooperative. Once this transaction is finalized, Cargill and Golden Growers will each own 50% of ProGold LLC.
About Golden Growers Cooperative
Golden Growers Cooperative (GGC) was formed in 1994 to create a value-added processing opportunity for corn growers in the Dakotas and Minnesota, and currently has about 1,500 members.
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Cargill combines 156 years of experience with new technologies and insights to serve as a trusted partner for food, agriculture, financial and industrial customers in more than 125 countries. Side-by-side, Cargill is building a stronger, sustainable future for agriculture. For more information, visit Cargill.com and our News Center.
About American Crystal Sugar
At American Crystal Sugar Company, growers who grow and harvest the sugarbeets also own the company and the factories that make their products. Through its sugarbeet processing facilities, American Crystal Sugar Company processes sugarbeets into all-natural sugar, agri-products such as molasses; sugarbeet pulp; and other byproducts of the molasses desugarization process, like betaaine and concentrated separated by byproduct, (CSB).
American Crystal Sugar is proud to be an economic engine of their communities. They employee 1,400 full-time employees and about 900 hourly seasonal wokers and many more contracted third-party workers.