MembersProspectus

Camgrain is a

farmer-owned

central storage

co-operative,

established in 1983

Arable farmers in the UK face a unique opportunity as major food and drink manufacturers and retailers switch to grain with a

known provenance and quality specification. UK suppliers able to meet these criteria will gain secure premiums and assured

market outlets. However, most individual farmers do not have the scale to meet these demands reliably or cost effectively. In

short, many stores not able to supply these emerging markets are foregoing value added opportunities. Camgrain members

enjoy access to value added premium markets and receive the benefit of cost effective fast and efficient harvest service.

2

My visit to the Linton APC site confirmed to me that Camgrain could walk the walk as well

as talk the talk. They were progressive and forward thinking, ready to take on expansion.

You know once you make the phone call for collection that you can rest easy, which is just

what you need at that time of year. Nick Rowsell Hampshire

“

”

Why are More and More Farmers Turning to Camgrain?

The Challenge On farm The Camgrain Solution

30% of grain storage is outdated and unable to cope with modern combines. Often segregation to achieve full market potential is poor.

Colossal intake and drying capacity secures quality and movement from farm within 24 hours. Load by load analysis and segregation maximises potential market value.

Consumer led demand for game changing rationalisation at all stages in the supply chain.

Significant economies of scale and efficient use of logistics captures value in the supply chain.

Consumers are demanding ever tighter quality specifications to drive ultra efficient processing techniques. Ex-farm grain cannot achieve the necessary tight specifications, forcing growers to sell quality crops at discounted values.

Camgrain has infrastructure capable of meeting food ingredient standards. Efficient round the clock logistics, combined with positive release, guarantees on-time & in-specification every time.

Unpredictable UK weather at harvest causes delays, stress and loss of quality on farm.

Powerful drying facilities, charged ‘at cost’, ensures growers capture the quality no matter the conditions.

Increasing need for farm businesses to take on more land or work together to improve unit cost. The use of dispersed farm stores causes logistical and practical inefficiencies at harvest.

Efficient collection at harvest reduces management and labour required. Releasing capital, labour and buildings for alternative uses.

Uncertainty of quality loaded ex-farm. Camgrain ensures every load is delivered on spec.

Fewer but larger consumers with a strong focus on their brand. Ex-farm grain cannot provide robust brand protection and individual farms cannot provide security of supply at scale.

Unique food industry standard processing of wheat, certified by the British Retail Consortium.

Volatile world markets and increasing cost of inputs make managing farm cash flow and revenue hard.

Flexible finance through crop pools support Members working capital requirements.

On Farm construction lacks scale with all the associated inefficiencies.

Grant aid captured by Camgrain allows construction with economies of scale.

Whilst the cost of storage rights is aligned to construction costs, Camgrain can offer significant flexibility in phasing the

purchase of rights over a number of years. Options are always best discussed with one of the team. Current cost of storage

rights at Camgrain is £110 per tonne.

This compares extremely favourably to recent quotations received by growers for reinvestments on farm, particularly given

the unprecedented scale and quality of the Camgrain infrastructure, including the unique clean wheat processing facilities.

Purchase Of Storage Rights & Operating Charges2

Share Capital1

Members purchase 1 share valued at £10 in Camgrain Stores Ltd and 1 share valued at £10 in Camgrain Ltd

3

HandlingCharges

Handling and Haulage

Drying Chargesat cost

StorageRights

Cost recovery model as no outside shareholders to satisfy

Storage Charge as little as

QualificationLoan

£40 £85

£1.50/t£11.45

The purchase of storage rights is structured on a basis of

loans – a part being funded on joining by the member

as the Qualification Loan and part being funded by

Camgrain’s bank. Members pay a Qualification Loan of

£40/t on joining with the balance of £70/t being borrowed

by Camgrain from the bank.

Repayment of both loans by the member is then

structured through an annual service charge and is

therefore a revenue expense, with full tax relief avaliable

that could bring the purchase price down to as little as

£85/t. Fixed at the commencement of the agreement,

with the example below based on £20.00/t at an interest

rate of 5.5%.

Basic On-Farm 1500t flat store £170 per tonne

Additional annual interest burden at 5.5% £3.00 per tonne

Store and continuous flow dryer £220 per tonne

Additional annual interest burden at 5.5% £5.50 per tonne

Costs of Joining Camgrain £110 - £85 per tonne

Finance Model:

As the store is owned by the members, handling charges are at cost and set annually by the Board, with no additional charges

for standard cleaning/grading. Handling charges for the 2015 harvest were £11.45/t (includes haulage to store), split into an

initial payment of £5.60/t in August on committed tonnes and the balance of £5.85/t paid in November on delivered tonnage.

This cost covers overheads for the year, transport to store (within a 30 mile radius of any store) weighbridge, laboratory

analysis, drying from 16% for cereals & 10% for oilseeds, insurance, quality assurance, pest-control, on-going maintenance

of the facilities and outloading. Members may also over-deliver against their committed tonnage for an additional charge.

Annual Operating Charge3

Cereals and Pulses Oilseeds

4

Storage Purchase - Cashflow - 7 years Annual storage charge is £20/t for 5 years, £16.12/t in the 6th year (£110/t total plus interest on outstanding balance). With

full tax relief this could come down to as little as £85/t. The initial commitment of £40/t qualification loan is repaid after final

storage charge paid (interest free).

Storage Rights are an Allowable Revenue Expense Item

Once storage charges are finalised members continue to

use their delivery rights indefinitely, paying only the annual

handling charges based on delivered tonnage.

Upon retirement, members are able to sell or assign their

rights. The model displayed to the right shows a typical

cash flow that can be fine-tuned to suit specific needs

following detailed discussion with a member of the team,

together with advice from your own financial advisor.

Loan

£40.00

£ -

£ -

£ -

£ -

£ -

£ -

(£40.00)

Revenue

£20.00

£20.00

£20.00

£20.00

£20.00

£16.12

£ -

£116.12

01-Sep-14

01-Sep-15

01-Sep-16

01-Sep-17

01-Sep-18

01-Sep-19

1

2

3

4

5

6

£0.65

£2.79

£1.84

£0.84

£ -

£ -

£ -

£6.12

£40.00

£20.00

£20.00

£20.00

£20.00

£20.00

£16.12

(£40.00)

£116.12

£70.00

£50.65

£33.44

£15.28

£ -

£ -

£ -

£ -

Year QLCash Flow

StorageCharge

Interest@ 5.5%

BalanceOutstanding

£110Date

Weight deduction: 1% for each 1% screenings, 1.25% for each 1% moisture to 14% moisture.

Dry grain credit: 1% for each 1% below 14% moisture. (Excludes denatured seed, pulse & oats)

Additional drying: 16.01 - 17.00 £1.50 per tonne

17.01 - 18.00 £3.00

18.01 - 19.00 £4.50

19.01 - 20.00 £6.00

20.00 - 21.00 £7.50

Above 21.00% *

*Accepted at the discretion of the Store Manager

(Charges rising at £1.50 per 1% moisture)

Weight deduction: 1% for each 1% screenings, 1.25% for each 1% moisture to 8% moisture.

Dry grain credit: 1% for each 1% below 8% moisture. (Excludes denatured seed.)

Additional drying: 10.01 - 11.00 £1.50 per tonne

11.01 - 12.00 £3.00

12.01 - 13.00 £4.50

13.01 - 14.00 £6.00

14.01 - 15.00 £7.50

Above 16.00% *

*Accepted at the discretion of the Store Manager

(Charges rising at £1.50 per 1% moisture)

Camgrain is an integral element in our expanding farming enterprise. Local storage and drying

in multiple farm locations is both expensive and less environmentally friendly than using a

centralised grain store. It also enables the required high food storage standards to be achieved,

which is very difficult at a farm location for a viable cost. Andrew TetlowEssex

“

”

Operating Structure & Headline Benefits

Strategic locations, massive scale, operational efficiencies and tax advantages generate significant benefit for members

that are not available on farm, as summarised below. Camgrain’s guaranteed vendor assured grain offers huge benefits to both

member and customer alike.

Second Stage Processing The completion of Camgrain’s unique food ingredients wheat

plant, and its accreditation by the British Retail Consortium (BRC)

as grade A, has totally shifted the goal posts in grain handling

and created a direct link with the high value market for breakfast

cereals. The significant premiums gained in this market now feed

directly back into pool prices, further enhancing member returns.

4

Saving per tonne

£5.00 - £10.00

£2.30 - £3.30

£2.40 - £3.40

£2.28 - £3.28

£0.40 - £1.30

£12.38 - £21.28

Value Category

Tax allowance

Electricity and fuel on drying

Haulage efficiencies on outloading

Blending material

Nil rejections

Total

5

The grain leaves the farm at harvest and you can forget about it. Storing it yourself means it

has to be dried, constantly monitored and you are rarely able to make the grade for milling

on a continual basis. Camgrain’s service is second to none and provides me with year on

year stability. From the first year, everything has run so smoothly, it is a job to believe. Harvest

would be far less stressful if all of my production went to Camgrain. Chris EglingtonCentral Norfolk

“

”

Marketing5

6

The Future

Camgrain has built a unique network of four Advanced Processing Centres (APCs) stretching across east and central England.

These strategically placed centres are located in premium production areas with excellent access to trunk roads ensuring

rapid transit of grain inwards and food ingredients outwards. Superb logistical management, strict quality control and genuine

vendor assurance has eliminated rejected loads and wasted journeys – as a result the premiums gained for our members are

not eroded by claims or extra haulage.

In parallel, Camgrain has built up close partnerships with many of the UK’s major household brands in food, drink and multiple

retailing. As a result, Camgrain has become the supplier of choice to these global businesses because, even in the most

dire harvest conditions like 2012, it delivers against contract. In short, these leading companies recognise that their brand is

strongly safeguarded by Camgrain’s systems and expertise. It is a win-win situation.

Over the next ten years Camgrain will continue to build on this success – each APC has unrivalled expertise and knowledge

in key premium crops and has been designed around massive capacity to ensure that quality can first be captured and then

enhanced through its state of the art value optimisation technology.

The infrastructure at Cambridge and Northants APCs has the capability of supporting a massive increase in on-site handling

of food ingredient wheat – up to another 500,000 tonnes. An additional capacity ideally placed to service the world class

cluster of food manufacturers in the East Midlands, with its demand for over 1.5 million tonnes per year.

At the same time Camgrain is investing in its people across the business, from operations to board level, in order to ensure

that the business continues to be led and operated to the best standards possible, with both members and customers

continuing to receive unrivalled service levels.

In a period of just thirty years, excellent leadership, staff expertise, member loyalty and significant investment have placed

Camgrain at the forefront of the logistical management and supply of UK combinable crops to the food and drinks sector.

This position, plus the reputation gained, will serve as the spring board for the next thirty years as Camgrain continues to

develop its market leading role as the UK’s premier logistics service company for combinable crops.

6

Harvest 2014 was my first year working with Camgrain and I wanted to say an enormous ‘well

done’ to all the fantastic people. The operation is impressively smooth with everything being

done to help the haulier. The people I came into contact with were simply outstanding in their

cheerfulness, efficiency under pressure, politeness, work ethic and friendliness.Sarah Synge

Warwickshire

“

”

Camgrain’s success has been built upon developing strong alliances with all its stake holders - members, marketing agents,

partners in the food chain and customers. Camgrain’s unrivalled excellence in the management, quality control and logistics

of combinable crops means that its members maximise their crop value because agents can market with absolute confidence

into premium markets. Partners carrying out further processing know that the ingredient supplied to them will allow for

maximum technical efficiency and yield, whilst customers, even in the most exacting sectors such as breakfast cereals, know

that they can buy with confidence.

The scale at which Camgrain now operates gives all of its stakeholders confidence that maximum value will be added

throughout the chain. It is a relationship from farmer member to consumer, built throughout upon mutual trust and assurance

and in which each participant in the chain draws benefit.

7

“

“

Camgrain is investing in its people across the business, from operations to board level, in order to ensure that the business continues to be led and operated to the best standards possible.

Camgrain Stores Ltd, Cambridge APC, London Road, Balsham, Cambridge, CB21 4HH

Tel: 01638 572800

Email: info@camgrain.co.uk

Web: www.camgrain.co.uk

T @Camgrain

Linton APC“30 Years of malting barley expertise”

Cambridge APC“Specialist food grade wheat”

Stratford APC“Fully accredited organic crop processor”

Northants APC“ Strategic milling wheat distribution hub”

The Camgrain Network • 430,000 t of storage located in East Anglia and

the South Midlands

• Peak daily intake capacity – 30,000 t, utilising 250 lorries per day

• Cambridge APC – a unique processing centre with BRC grade A certification for food grade grain cleaning and storage.

• Linton APC – designed to maximise segregation and micro management of malting barley and niche crops.

• Northants APC – strategically placed at the centre of the East Midlands food cluster with huge infrastructure to future proof and facilitate expansion

• Stratford APC – bringing Camgrain expertise and proven technology to the organic sector and guaranteeing our members a value added route to market

Version: 12 Dated: Oct 2015

Newmarket

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NOTTINGHAM

NOTTINGHAMSHIREAMSH

STAFFORDSHIRE

LEICESTERSHIRETERSHIRE

LINCOLNSHIRE

CAMBRIDGESHIREBRIDGESHIRE

NORFOLK

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BUCKINGHAMSHIREMSHIRE

OXFORDSHIRE

GLOUCESTERSHIRESHI

WORCESTERSHIREO CE

SHROPSHIRE

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