Opportunities in Agri-Business: Moving up the Value Chain Alliance Grain Traders - Murad Al-Katib, President and CEO

February 2014

Forward Looking Statements Certain statements in this presentation are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by AGT at the time of preparation, may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of AGT (including its operating subsidiaries) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of harvests, fluctuations in the price of lentils and other crops, failure of plant, equipment or processes to operate as anticipated, accidents or labour disputes, risks relating to the integration of acquisitions or to international operations, as well as those factors referred to in the section entitled “Risk Factors” in the Annual Information Form of AGT dated February 21, 2013 which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although AGT has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. AGT expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.

* Non-IFRS Financial Measures

AGT provides some non-IFRS measures as supplementary information that Management believes may be useful to investors to explain AGT's financial results. These non-IFRS measures include EBITDA* (earnings before finance expense, income taxes, depreciation and amortization, and any effects of non-recurring costs and non-cash foreign exchange adjustment), Adjusted Net Earnings* (earnings before any effects of non-recurring costs and non-cash foreign exchange adjustments), Net Debt* (bank indebtedness, short term financing and long term debt less cash) and Net Working Capital* (current assets less current liabilities). Management believes that these are important measures in evaluating performance and in determining whether to invest in AGT. However, EBITDA*, Adjusted Net Earnings*, Net Debt* and Net Working Capital* are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. In addition, AGT may calculate these measures differently than other companies; therefore, such measures may not be comparable. Investors are cautioned that EBITDA*, Adjusted Net Earnings*, Net Debt* and Net Working Capital* should not be construed as an alternative to net earnings (loss) or cash flows as determined in accordance with IFRS as an indicator of AGT's performance or liquidity. For a reconciliation of net earnings (loss) determined in accordance with IFRS to EBITDA* and Adjusted Net Earnings*, see the table on page 36 in the management's discussion and analysis for the three and nine months ended September 30, 2013 available under AGT's profile on www.sedar.com and on the AGT web site at www.alliancegrain.com.

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Company Overview Company Profile Global Company and Brands

Global leader in pulse, staple food and food ingredient processing and distribution, with merchandising offices and value-added processing facilities in Canada, the U.S. Turkey, Australia, India, China and South Africa; European sales offices, Russian origination office and a global customer base

• TSX Listing : AGT • Approximately

20 million fully diluted Shares Outstanding

• Market Cap approximately $300 million

• Current Dividend $0.60/share/year

• Headquarters Regina, SK, Canada

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Alliance Grain Traders Inc. Highlights

AGT Global Operations

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Russia (5%)

(1%)

(15%) (1%)

(15%)

(38%)

Number in parentheses represent crop sourcing by origin

AGT sells to all countries shaded in red

(25%)

• 29 facilities in 6 key agricultural production origins on 5 continents with over 1.7 million mt of annual production

• European Sales offices

• Russian and India origination office

AGT Global Facilities and Offices

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Key Products Category Product Pillar Highlight

Lentils Red, green, yellow

Split, Football and whole

• #1 exporter in lentils globally, estimated 30% market share Largest red lentil splitter in the world and largest colour sorter of green lentils globally

Chickpeas Kabuli, B90, desi, split desi • #1 exporter in Kabuli type chickpeas globally with a multi-

origin chickpea program for the canning, packing and hummus processing sector

Beans Navy, romano, pinto, faba, dark light red kidney, black

• Growing platform for multi-origin bean shipped globally with processing and origination in 10 countries

Peas Yellow and Green Split and Whole

• World’s largest peas splitter • Focus on value-added peas rather than bulk shipment

Milled Durum Wheat

Pasta, semolina, bulgur • Turkey: #3 domestic brand and #1 export brand for pasta • 12% pasta market share in Turkey and 80 counties of

export

Rice Medium and long grain • New rice processing mill in Turkey

Food and Feed Ingredients

flour, protein, starch, fibre, • New food ingredient facility located in Minot, North

Dakota: largest US pulse ingredient factory

Other Products Popcorn, sunflower seeds, flax seeds, specialty crops

• Largest multi-origin popcorn importer and exporter in Turkey and South Africa

Source: Management estimates

AGT Diverse Product Offering

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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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The Family Farm is Growing • Western Canadian farm has changed over

the years • Average farm size is in Canada growing as

farms consolidate to large operation or corporate farms: o 2006: 1,450 acres (3.3% of farms over 3,250 acres) o 2011: 1,668 acres (4% of farms over 3,250 acres)

• Median age of farm operators in Canada increasing: o 2006: 52.6 years old o 2011: 54.2 years old

• Agriculture, forestry, fishing and hunting makes up 11.4% of Saskatchewan’s Real Gross Domestic Product (GDP)

• According to Statistics Canada's revised estimates, Saskatchewan posted a GDP at market prices of $57.5 billion (in 2007 chained dollars) in 2011

Source: Saskatchewan Agriculture and Food; StatsCan 2011 Census on Agriculture; Saskatchewan Government data

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Agriculture – Not just food anymore

• Agriculture not just hitting the “breadbasket” anymore

• 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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Agricultural Industry Growth Growth Opportunity

• Traditional price conscious markets are becoming increasingly ‘commoditized’

• 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, Feed and Fuel • Pulses ingredients like flour, protein, starch and fibre

as well as ingredient as well as premium pulses with market demand in consumption markets

• Durum wheat for production of pasta

How to realize the potential:

• North America and non-traditional uses for grains and pulses like ingredients and industrial uses

• Move up the value-chain with packaged retail • Increase Western Canadian milling capacity for pulses

and durum • The U.S. market is close in proximity and large in size • Research partnerships with industry • Focus on transportation and market development

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• Pulse crops include lentils, peas, chickpeas and beans, which produce edible seeds, called pulses

• Represent a non-GMO, gluten-free, low allergen, major source of protein and fibre, which developing nations particularly rely on (i.e. vegetable sources for their protein and energy requirements)

• Increasing consumption (both directly and as an input in other food products) in developed countries where pulses are increasingly viewed as healthy

Overview of Pulses

Composition of Pulses

Moisture 7-14%

Starch 38-55%

Protein 20-35%

Crude Fibre

3-14%

Sugars 3-8%

Ash 2-4%

Fat 2-4%

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Canada Pulse Production and Exports

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Production (tonnes) Export Quantity (tonnes)Source: FAO

Traditional Markets

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South Asia

Middle East and North Africa

Latin America

Growth Driver:

Population and Global Demand for Food

• 2050 - Global population expected to rise 30% • Global food output will have to grow by

70% to feed the world • Pulses are a sustainable source of protein, a key

nutrient for large numbers of the world’s populations Source: UN FAO

New Markets

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North America

Europe

China

Growth Driver:

Health, Nutrition and Sustainability

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

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

Overall Population

Growth

Emergence of the Middle

Class

Health and Wellness

Trend

• Global population to rise from 7 billion to 9 billion (30%) by 2050 (U.N.)

• Population growth expected to be concentrated in developing nations where diets tend to consist of a greater proportion of pulses

• 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, specifically of a non-GMO variety

• Overall food output to increase by over 70% due to urbanization and income growth (FAO)

• Protein is a key nutrient and pulses are a sustainable source of protein

– Lower energy use, reduced greenhouse gas emissions, improved soil health through rotational cropping, increased water use efficiency

Factors Driving Demand

Alternative Fuels

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

• Global price for protein is rising as corn is increasingly used in the production of ethanol

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Food Industry Statistics

Source: FDA; USDA; A.C. Nielsen; StatsCan; Ag Canada; CFIA; Figures based on industry reports and estimates

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Category Estimated Market Value

Annual Spending on Food (U.S.) $1.6 Trillion (E)

Functional Foods and Nutraceuticals $50 Billion (E)

Sports Nutrition and Weight Loss $15 Billion (E)

Soy Products $5.5 Billion (E)

Vegetarian Markets $2 Billion (E)

Top 5 Food Companies in the U.S.

Source: 2013 Food Processing Magazine Survey and Rankings

(USD $billions) 2012 Food Sales 2012 Total Sales

Pepsico Inc. $37.6(E) $65.5 (E)

Tyson Foods $31.6 (E) $33.3 (E)

Nestle (U.S. and Canada) $27.2 (E) $101.0 (E)

JBS USA $20.9 (E) $36.9 (E)

Anheuser-Busch InBev $16.0 (E) $39.8 (E)

$133 Billion Combined Top 5 Food Companies Food Only Sales

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$864.5 Billion Combined 2012 Sales – Top 5

Source: Supermarket News 2012 Rankings

2012 Sales (USD $billions)

Wal-Mart (U.S.) - U.S. Ranking #1 $469.2 (E)

Tesco (U.K.) $102.7 (E)

Carrefour (France) $98.7 (E)

Costco (U.S.) - U.S. Ranking #2 $97.1 (E)

Kroger (U.S.) - U.S. Ranking #3 $96.8 (E)

Metro Group (Germany) $92.8 (E)

Schwarz Group (Germany) $88.2 (E)

(9) Target (U.S.) - U.S. Ranking #4 $73.3 (E)

(20) Safeway (U.S./Canada) - U.S. Ranking #5 $44.2 (E)

(24) Loblaw Cos. (Canada) – Canada Ranking #1 $32.0 (E)

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Top 5 Global Food Retailers

$96.7 Billion Combined 2011 Sales – Top 5

Source: Industry Canada OCA Summer 2013 Report

2011 Sales (CDN $billions)

Loblaws (Weston Group) $31.7 (E)

Wal-Mart Canada $23.6 (E)

Sobeys (Empire Company) $16.1 (E)

Costco Canada $13.9 (E)

Metro Inc. $11.4 (E)

Shoppers Drug Mart (Acquired by Loblaws) $10.5 (E)

Safeway Canada (Acquired by Sobeys) $6.7 (E)

Rexall (Katz Group) $5.5 (E)

Overwaite (Pattison Group) $3.4 (E)

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Top Canadian Food Retailers

Source: Estimates based on reporting for Mass Retail Grocery only sales by A.C. Nielsen Data .2011 data trailing 52 weeks from October 2011

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Top Canadian Retail Pulses Brands

National – Retail Sales (MRG Only) – 52 weeks ($ ‘000)

Dry Pulses Wet Pulses Total

TOTAL CATEGORY $ 35,415 $ 76, 219 $116,634

Private Label $ 12,887 $ 27,161 $ 40,048

NuPak $ 4,208 Not Available Not Available

CLIC $ 2,462 $ 2,154 $ 4,616

Cedar (Phoenicia) $ 1,518 $ 7,029 $ 8,547

Ferma $ 803 $ 763 $ 1,566

Unico Not Available $ 20,063 $ 20,063

FOOD MANUFACTURERS

FOOD SERVICE

CONSUMERS

Nutrition

Health

Change in Consumers

Sustainability

Factors Influencing Pulse Demand

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Pulses – Enhance Everyday Foods Traditional Formulation: 100% Durum Semolina Pasta

Reformulated: Pulse Inclusion 25% Lentil, 75% Durum

25% lower carbon footprint

100% increase in fibre 25% increase in protein

Adapted from: Gan et al. 2011. Unpublished results, Agriculture and Agri-Food Canada;

U.S. Department of Agriculture, Agricultural Research Service. 2010. USDA National Nutrient Database for Standard Reference.

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Pulses and Sustainable Agriculture Pulses Produce Their Own Fertilizer

by Fixing Nitrogen Pulses Use Less Non-Renewable Energy

Relative to Other Crops Increased Water Use Efficiency

Source: Arjen Y. Hoekstra and Ashok Chapagain, Globalization of Water, U. of Twente, Waterfootprint.org National Geographic, April 2010

43 gallons of water to produce one pound of pulses

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

1,857 Gallons/ lbs

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Gallons/ lbs

Pulses

70% of the non-renewable energy used in cropping systems in western Canada is attributable to fertilizers (Zentner et al. 2004)

756 Gallons/

lbs

469 Gallons/

lbs

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Carbon Footprint

Source: http://phys.org/news/2012-05-wwf-over-consumption-threatens-planet.html

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Increased Focus on Sustainability Retailers Food Companies

• Pepsico o UK – 50% reduction of carbon emissions/water use in 5

years

• Unilever o Source 100% of agricultural products sustainable by 2020

• Heinz o 20% reduction in carbon emissions by 2015

• Wal-Mart - #1 in World and U.S. o Locally sourced products

o Support 3rd world farmers

o Track pesticides, fertilizer and water use

• Carrefour - France, #2 in world o Carbon legislation

o Social welfare

• Tesco - UK, #3 in world o Carbon labeled products

• Loblaws - Canada, #24 in world o Initiatives to reduce carbon footprint and source

locally and sustainably

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Food With a Message

“Climate Neutral from Cow to Cone”

• Raises awareness of climate change

• Promotes Climate Change College that Ben & Jerry helped establish

Sun Chips “Small Steps Sweepstakes”

• Sun Chips plant in Modesto, CA, uses a field of solar concentrators for heat

• Frito Lay purchases renewable energy credits to offset 100% of electricity used in its U.S. facilities

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Investment in Ingredient Platform Minot ND Production Facility

• Production facility commissioned in June 2013 for production of pulses flours, proteins, starches and fibre

• Second production line expansion announced adding 35,000 mt of capacity

• With expansion capacity of 70,000 mt/year. Potential for addition of third production line

• Expansions being considered in 2014-2015 for Canada and Turkey

• Expanding retail business for canned, packaged and ingredient products

Saskatoon SK R&D Centre

• Fully equipped 2,000 sq.ft Analytical,

Application & Product Development

Laboratory focused on:

o Customer Service and Training

o Collaborative Research

o Commercialization & Innovation

o Product Development

o Quality Evaluation Programs

o Strategic Pipeline Research

o Technology Development

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Ingredient Product Offering

• High Viscosity Pulse Flours

o Yellow Pea Flour V-6000TM

o Yellow Lentil Flour V-6000TM

o Faba Bean Flour V-6000TM

• Pulse Proteins

o Pea Protein 75 (75% Protein)

o Pea Protein 55 (55% Protein)

o Lentil Protein 55 (55% Protein)

o Faba Bean 60 (60% Protein)

• Pulse Brans

o Pea Bran 85 (85% Fibre)

o Pea Bran 55 (55% Fibre)

o Lentil Bran 85 (85% Fibre)

o Lentil Bran 55 (55% Fibre)

• Pulse Flours & Semolinas o Yellow And Green Pea o Red, Yellow And Green Lentil o Chickpea o Faba Bean, Navy Bean, Pinto Bean

• Bakery

• Beverages

• Dairy solutions

• Dips and sauces

• Egg replacement

• Energy bars and supplements

• Flour milling

• Gluten free concept

• Milk replacement

• Pasta & Asian noodles

• Processed meat and meat analogs

• Snacks and breakfast cereals

• Soy replacement

• Tea, coffee and cocoa

• Animal feed solutions

• Industrial & technical

Applications PulsePlusTM Products

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Foods Petfood/Animal Feed Aquaculture

• Approximately $19.85 Billion spent on pet food in the U.S. in 2011

• Global Feed Markets in 2011 estimated at $257B

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Accounts for approximately 47% of the world’s fish food production for human consumption

Source: American Pet Products Association Report; Transparency Market Research; UN SOFIA report

INGREDIENTS: Bean Flour (Lentil, Garbanzo & Adzuki Beans), Potato and/or Pea Starch, Potato Fiber, Vegetable Oil (High Oleic Sunflower Oil and/or High Oleic Safflower Oil, and/or Non Gmo Expeller Pressed Canola Oil), Seasoning (Sea Salt, Cane Sugar, Black Pepper, Tapioca Maltodextrin, Onion Powder, Garlic Powder, Autolyzed Yeast Extract, Malic Acid, White Pepper, Expeller Pressed Canola Oil), Potassium Chloride

Gluten free Good source of fibre

(3 g fibre per serving) Low fat

Increased Ingredient Use for Pulses

More Production or Higher Value? • AGT is proponent of origin-based processing

keeping the value in secondary processing at the source vs. destination-based processing

• Need to guarantee quality and delivery so the end product is the same every time

• Create value for producers through marketing options and potentials for premiums as has been done on pulses

• Transportation advances are creating freight options that were not available before

• Transformational projects like the Global Transportation hub in Regina with tenants include CP Rail, CLS/Loblaws, Yanke

• Free-Trade Agreement with Europe and others will be a big opportunity for Canadian businesses

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Tariffs / Free Trade Agreements

• Canada-E.U. Trade Partnership underway

• Colombia - FTA concluded

• Morocco – FTA underway

• India – FTA underway

• Turkey – Discussions ongoing

• Japan/TTP/CETA, etc.

• Pulse industry is currently renewing bilateral FTA priorities in collaboration with other Canadian agriculture groups

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Non-Tariff Trade Barriers

• Tariffs, duties and quotas used to be the trade barrier of choice – Importing countries’ options have been limited by WTO negotiation

rounds

• Export challenges increasingly include: – SPS/food safety barriers

– Emerging markets with unpredictable regulatory and policy approaches

– Increased maximum residue limit (MRL) monitoring and enforcement

– For “minor” crops, importing companies often do not have MRLs in place – higher trade risk

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Multimodal Business

• Canadian peas, lentils, beans and chickpeas move across Canada and 182 countries worldwide in:

• Hopper cars • Intermodal vans

• Box cars • Marine containers

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Challenges

• Complex supply chain = many players optimizing their own performance without prioritizing the supply chain’s performance

• Examples of problems: – Over-ordering by shippers

– Challenges with container availability and vessel capacity

– Lack of predictability in rail car supply and transit times

– Extension of shipping windows sold

– Use of Grain and Feed Trade Association (GAFTA) contract extensions

– Inclusion of GAFTA contract penalties in cost calculations

– Poor reputability for consistency and reliability

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Practical Solutions • Proactive work to develop commercial solutions amongst supply

chain stakeholders

• Cooperation with government to ensure the regulatory environment encourages commercial solutions – e.g. Service Level Agreements (SLAs)

• Pulse industry is working with partners from all sectors to ensure legislation is in place that provides shippers with a right to a service level agreement with the railways and a process to establish one should negotiations break down.

• Balanced accountability leads to Predictability

“Predictability is central to the overall costs that companies incur in logistics and thus to their competitiveness in global supply chains.”

– World Bank, “Connecting to Compete”

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Saskatchewan Landscape

• Resource sector boom is real: many factors beyond our control ie: global demand for commodities, pace of growth in emerging markets, credit, liquidity and macroeconomic factors

• Economic growth in Saskatchewan is truly multi-dimensional: agriculture, mining, oil and gas, manufacturing, technology, services, education.

• We all feel pretty good right now • Population up, economy doing relatively well

• Perception of the Province is high outside our borders

• Export dominated economy

• Seem to be doing it “right”!

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Key Opportunities • AGT is an example of how a Saskatchewan company can become

globally successful reaching world markets from Saskatchewan

• Opportunity exists to leverage our raw material commodity base to create refinery/value added industries to capture the wealth creation here

• Key elements to this strategy: – Quality inputs: we have it!

– Technology: available and R&D are key elements: SRC, PRC, U of S, U of R, CDC

– Innovation

– Talent: workforce available and productive

– Infrastructure: PPP, Gov’t alone

– “Enabling Environment” from a policy perspective: labour legislation, tax policy, investment attraction, immigration policy and settlement, infrastructure, education and skills

– Cost competitive jurisdiction

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Challenges – What to Do Next? • Are we as successful as we think? “Pat on the back” or is “a good defense

a strong offence”?

• Elements of concern for me as a CEO:

– Cost competiveness: global environment is real: CDIA, neighboring jurisdictions

– Lets look at my case of Regina versus Minot:

• Land costs at GTH estimated at $12 million vs Minot AG Park: $0

• State subsidized equipment and business loans: 1% interest for 5 years: $14 million

• State corporate income tax and payroll tax exception for 5 years

• Construction of buildings: constructed at $60 sq.ft in Minot versus $120 sq.ft in Regina

• BNSF Rail Terminal and a workforce to be drawn from high unemployment areas of the U.S.

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Key Drivers of Success • Market access and diversification of exports: strong advocate of

the Government of Canada’s Pro-Trade Plan

• Gateway Initiatives: Asia and Emerging markets will be the key drivers: BRIC; next ones CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa).

• Transportation is key: i.e. GTH, rail infrastructure, roads

• Innovation agenda and productivity gaps: we are losing ground

• SME’s are the driver of our economy and Saskatchewan is export successful and diversified

• Access to talent: migration, immigration: what matters? Jobs, Education, Housing, Healthcare, Infrastructure, Leisure

• Access to capital ie. venture capital?

• Perception of business climate

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Seize the Opportunity – Build it! • Skills shortage is real: engage the existing pool more effectively but

recognize that we talk of skills shortage.

• We have a critical LABOUR SHORTAGE: Business windows KEY: SINP was good but???

• We shall all be judged on how this Province looks 10 years and 20 years from now, not 10 to 20 weeks from now

• Meaningful change in the way we think of Government’s role: private sector is the driver of many elements: PPP

• Balance of Urban and Rural interests: cities and adjacent areas need a coordinated approach to sustainable growth: lets not make the same mistakes that Alberta made and is making

• “Up the Chain” insulates you from the short term macro effects and makes you a seller of “products” not commodities

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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 and fuel as well as packaged and retail products and ingredients

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

• Changes in Canada on grain marketing and grain companies have potential to strengthen agri-business sector overall and give producers options for marketing grains in Northern Plains states and Western Canada

• On-going research into not only varieties but new uses for pulses and grains in new forms for ingredient use is needed

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www.alliancegrain.com www.saskcan.com (306) 525-4490