Global Investment Driving Growth in the Pulse IndustryAustralia Milling Group/AGT Foods Australia – Peter Wilson, CEO

July 2015

Company Overview Company ProfileGlobal Company & Brands

• Global leader in pulse, staplefood and food ingredientprocessing and distribution

• Merchandising offices and value-added processing facilities inAustralia, Canada, the US,Turkey, India, China & SouthAfrica

• European sales offices

• Russian origination office

• Global customer base

• HQ: Regina, SK, Canada

• TSX Listed: AGT

• Shares Outstanding:23.2 million (fully-diluted)

• Market Capitalization:~ $730 million

• Annual Dividend:$0.60/share

AGT Foods Highlights

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AGT Foods History

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AGT Foods Global Operations• Canadian head office and 39 facilities in 6 key agricultural

production origins on 5 continents with approximately around1.6 million mt of annual production with Sales, merchandising,origination and administration offices located around the globe.

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AGT Global Origination Strength

ChinaSept/Oct

IndiaOct (Kharif)

Australia/South Africa

Nov/Dec

TurkeyMay/June

IndiaJune (Rabi)

U.S. & Russia

July/Aug

CanadaAug/Sept

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Rural Renaissance “a future in which agriculture

provides societal solutions to energy supplies, health promotion and climate change.”

“whatever producers and processors do, they must be done in innovative ways that resonate with their customers.”

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Agriculture – Not just food anymore

• Agriculture not just hitting the “breadbasket” anymore

• Protein is a key driver of agricultural markets

• Food safety – non negotiable

• Impact reaching far outside Agri-Food:o Health sector

o Energy sector

o Environment sector

o Immigration sector

o Economy overall

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Pulse Industry GrowthGrowth Opportunity

• Traditional price conscious markets are increasingly ‘commoditized’ but “more reliable”

• The agricultural and agri-food industry needs…• To leverage nutrition, health, energy, food

security/safety and the environment profile to achieve sector growth

• Find new approaches to build on existing strengths in non-traditional markets and products

• To tap into the growth potential for feed in domestic and international markets

• Food, Fibre and Feed • Pulses ingredients like flour, protein, starch and fibre as

well as premium pulses with market demand in consumption markets

How to realize the potential:

• Non-traditional uses for grains and pulses such as ingredients and industrial uses

• Move up the value-chain with branded packaged wholesale and retail

• Increase value-added milling capacity for pulses• The Asian and MENA markets are in close proximity and

large in size• Research partnerships with industry• Focus on food safety, logistics and market development

and access

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Factors Driving Global Demand

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Benefits of Pulses

• Pulses are a sustainable source of protein• GMO-free, gluten-free, low allergen, major source of protein and fibre, which developing

nations particularly rely on vegetable sources for their protein and energy requirements• Lower energy use, reduced greenhouse gas emissions, improved soil health through rotational

cropping, increased water use efficiency

Emergence of the Middle Class

• Overall food output to increase due to population growth, urbanization and income growth

• Middle class may increase from 1.8 billion to 3.2 billion by 2020 and to 4.9 billion by 2030 -with 85% of this growth coming from Asia.

• Global spending by the middle class may grow from $21 trillion today to $56 trillion by 2030

Health and Wellness Trend

• Consumer movement towards healthy lifestyles in non-traditional markets

• Pulses offer many benefits for nutrition, health and chronic disease prevention

• As a result, there has been increased interest from food companies in using pulses in product formulations, for cost, characteristic, allergen, GMO-free and other reasons

Alternative Fuels & Sustainability

• Pulses production globally is at all time highs from multiple origins

• Pulses are a rotational crop for cereals and canola which are used in ethanol and biodiesel production

• Pulses lower the carbon footprint and support the sustainability efforts of processors, food companies and meet the demand of consumers for sustainably produced products

Source: UN FAO; OECD

Source: UN FAO

Markets for Pulses & Staple FoodsGrowth Driver: Population & Global Demand for Food

• 2050 - Global population expected to rise 30%

• Global food output will have to grow by 70% to feed the world with growing middle class

• Pulses are a sustainable source of protein, a key nutrient for large numbers of the world’s populations

Growth Driver: Health, Nutrition and Sustainability

• High Protein and Fibre, Nutrient Dense, Low Fat, Gluten Free, non-GMO, Low Allergenicity -> snackfoods

• Lower Energy Use, Reduce Greenhouse Gas Emissions, Improve Soil Health through Rotational Cropping, Increase Water Use Efficiency

South Asia

Middle East and

North Africa

Latin & Central America

Europe

North America

China

New Markets for PulsesTraditional Markets for Pulses

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Plant Fixing Nitrogen Lower Energy Requirement Increased Water Use Efficiency

Pulses & Sustainable Agriculture

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Source: Hoekstra and Chapagain, Globalization of

Water, U. of Twente, Waterfootprint.org National

Geographic, April 2010

• 43 gallons of water required to produce one pound of pulses

• 1,857 gallons of water required to produce one pound of beef

1,857Gallons/ lbs

43Gallons/

lbs

Pulses

756Gallons/

lbs

469Gallons/

lbs

• Pulses Use Less Non-Renewable Energy Relative to Other Crops

• 70% of the non-renewable energy used in cropping systems in western Canada is attributable to fertilizers

Source: (Zentner et al. 2004)

• Pulses produce their own fertilizer by fixing nitrogen

Global Pulse Production Rising

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Relative Australian Pulse Area, Production and Value

ABS/ABARE/Pulse Australia Limited

$0.30

$0.57

$0.39

$0.61

$0.40

$0.82

$0.62 $0.69

$0.84 $0.81

$1.11

$1.00

$1.07

$1.55

$-

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Area Production Value (Billion A$) Expon. (Value (Billion A$))

($700)

($600)

($500)

($400)

($300)

($200)

($100)

$0

$100

$200

$300

$400

$500

Desi/Yellow Pea Yellow Pea/CBOT Wheat Desi/Lentil

Linear (Desi/Yellow Pea) Log. (Yellow Pea/CBOT Wheat) Log. (Desi/Lentil)

Spread Prices basis

CFR Mumbai

Indian Pulse Production, Consumption and Gap

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11f

2011-12f

2012-13f

2013-14f

2014-15f

MT

Production Consumption Gap

• Four thematic areas;

– Managing Director of the Grains & Legumes Nutrition Council and Non-Executive Director of Pulse Australia, Ms Georgie Aley chairs the International ‘Creating Awareness’ theme as well as being the chair of the Australian Steering Committee.

– Pulse Australia CEO, Tim Edgecombe is a member of both the global ‘Market Access and Stability’ and ‘Productivity and Environmental Sustainability’ theme committees

– Michelle Broom, Nutrition Program Manager at the Grains & Legumes Nutrition Council, is a member of the global ‘Food and Nutrition Security and Innovation’ theme.

– The Australian national IYP committee will continue to hold industry workshops and engage with stakeholders throughout 2015 to capitalise on the opportunities available to the Australian pulse and food industry through the IYOP16.

2016

International Year Of Pulses

– What’s in it for the Australian Pulse Industry?

• Greater promotion and awareness of pulses for human consumption.

• Greater investment interest in further value addition for domestic and export demand.

• Better asset utilisation – margin improvement

• More options for farmers as liquidity improves

– What’s in it for the Australian Grains Industry?

• More sustainable industry – lighter carbon footprint.

• Future model for grains industry integration and supply chain efficiency.

• Opportunity for grain and pulse food product collaboration.

International Year of Pulses

Challenges for Australian Ag Sector

• Australian crops are almost fully dependent on export markets

• Market access is an ongoing priority for the pulse industry– Bilateral free trade agreements

• China

– Sanitary/phytosanitary issues, other non-tariff barriers

• Tariff and Non-Tarrif trade barriers• Differentiate and capture market

and sales opportunities over competing origins, processors, traders.

• Primary vs. Secondary processing – Balance between the two. Need to up value some products and efficiently ship others

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Ocean and Intermodal Containers• Transportation advances are creating

freight options that were not available before

• Transformational projects like the Toowoomba Range Crossing and the Inland Rail Project will change the way product flows in eastern Australia.

• Full containers in = empty containers available for outbound shipments –adjusting to the downturn in car part imports

• Free-Trade Agreements with key partners will be a big opportunity for Australian businesses

• Australia Milling Group is one of the largest agri-products container shippers in Australia

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Conclusions• Agriculture in in the midst of a renaissance

impacting many sectors of the economy• Opportunities as agri-production moves up the

value-chain focused on food, fibre, feed andfuel as well as packaged and retail productsand ingredients

• Global race for protein is on and Australia hasthe opportunity to become the “protein-basketof the world”

• Global agri-products markets are strong withneed for secure and stable food supplies

• Initial investment, follows an idea, sustainedinvestment in this sector follows supply anddemand confidence.

• International Year of Pulses set to drive supply,demand and investment -> margin

• Australia needs to harness the legacy benefitsof the Mining Boom as it migrates to thesustainable benefits of the Dining Boom

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