Winnipeg, MB, September 16, 2020 – Ag Growth International Inc. ("AGI" or the "Company") previously announced that a commercial grain storage bin manufactured by the Company and located at a customer's export terminal in North Vancouver, BC, had collapsed.
The grain storage bin that collapsed is part of a new bin line that was developed and manufactured by the Company over the past two years in response to market demand. It is a larger version of AGI’s standard hopper line. This new bin line is unique and distinct from the rest of AGI’s product lines, including its other grain storage bin products, and is not in place or being sold to any other customers.
In May of 2019 a similar product in a substantially different application and installed at a different site for a different customer suffered a failure, the cause of which is unknown at this time. Based on that event and out of an abundance of caution, the Company undertook an extensive engineering re-evaluation of the product prior to inclusion in two additional applications.
15 of these bins (including the collapsed bin) are located at the facility where the incident occurred and an additional 20 have been manufactured and supplied to another customer but have not yet been commissioned. The total sales value of these 35 bins is approximately CAD $19.1 million.
The customer at the facility where the incident occurred has asserted AGI's responsibility for the collapse, however, the cause of and any responsibility for the incident have not yet been determined. AGI’s immediate focus is on working with its customers to ensure the safety of all personnel and security of their facilities. The recovery, investigation and remediation may take a number of months to complete.
“We have reacted immediately, moving to work with our customers to discover the cause of this incident,” said Tim Close, President and CEO of AGI. “Our primary concern is safety of personnel at the sites. Once recovery of the site has been completed the investigation will provide the facts for us to determine the required remediation and the impact on AGI. We are confident that we can contain the impact on AGI’s business while collaborating with our customers to effect any required remediation, and continuing the growth and success across AGI.
We can also confirm continued robust performance of our business particularly in North American Farm, in Brazil, EMEA, India, AGI Food, and AGI SureTrack and, excluding any impacts from this incident, we are setting up for a solid completion of 2020 with Adjusted EBITDA in the second half of 2020 trending higher than expected as at our second quarter statements.”
AGI Company Profile
AGI is a leading provider of solutions for the global food infrastructure, including seed, fertilizer, grain, feed, and food processing systems. AGI has manufacturing facilities in Canada, the United States, the United Kingdom, Brazil, India, France and Italy and distributes its product globally.
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President & CEO, AGI
This news release contains forward-looking statements and information (collectively, "forward-looking information") within the meaning of applicable securities laws that reflect the Company's expectations regarding its future growth, results of operations, performance, business prospects, and opportunities. All information and statements contained herein that are not clearly historical in nature constitute forward-looking information, and the words “anticipate”, “believe”, “continue”, “could”, “estimate”, "expect”, “intend”, “plans”, "postulates", "predict", “should”, “will” or similar expressions suggesting future conditions or events or the negative of these terms are generally intended to identify forward-looking information. Forward-looking information involves known or unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Undue reliance should not be placed on forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which it is based will occur. In particular, the forward-looking information in this press release includes our estimate of the length of time the recovery, investigation and remediation may take; our belief that the investigation will provide us with certain information; the belief that we will be successful in securing and recovering the incident site and collaborating with our customers to effect any required remediation; the belief that we can contain the impact on AGI’s business and continue growth and success across AGI; anticipated continued robust performance in our business; and estimates of our second half fiscal performance, including with respect to adjusted EBITDA. Such forward-looking information reflects AGI's current beliefs and is based on information currently available to us.
Forward-looking information involves significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking information, including changes in international, national and local macroeconomic and business conditions, as well as sociopolitical conditions in certain local or regional markets, weather patterns, crop planting, crop yields, crop conditions, the timing of harvest and conditions during harvest, the ability of management to execute AGI’s business plan, seasonality, industry cyclicality, volatility of production costs, agricultural commodity prices, the cost and availability of capital, currency exchange and interest rates, the availability of credit for customers, competition, AGI’s failure to achieve the expected benefits of recent acquisitions including to realize anticipated synergies and margin improvements; changes in trade relations between the countries in which AGI does business and elsewhere including between Canada and the United States and between the United States and China; our ability to maintain strong relationships with our customers; and the potential for the Company to incur costs and liabilities related to the supply of defective or faulty equipment to its customers. These risks and uncertainties are described under “Risks and Uncertainties” in AGI's MD&A and in our most recently filed Annual Information Form, all of which are available under AGI's profile on SEDAR [www.sedar.com]. These factors should be considered carefully, and readers should not place undue reliance on AGI’s forward-looking information. AGI cannot assure readers that actual results will be consistent with this forward-looking information. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information included in this press release is made as of the date of this press release and AGI undertakes no obligation to publicly update such forward-looking information or the results of the investigation or other matters related to the incident to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.