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February 11, 2015

Tegram Grain Terminal Newest Member of the "Northern Arc"

With the arrival of its first truckload of soybeans last week, a new ocean port in northeastern Brazil promises to be an integral part of the "Northern Arc" project in Brazil. This is a series of ports and barging operations on the Amazon River and ocean ports in northeastern Brazil that will export soybeans produced in central Brazil at a lower cost that sending the soybeans to Brazil's distant southern ports.

The new Tegram grain terminal will be located at the city of Sao Luis in the state of Maranhao. The Tegram grain terminal is expected to export 2 million tons of grain including soybeans and corn during 2015 and 5 million tons of grain within two or three years when the first phase is fully operational. The second phase of the project includes another berth for ocean vessels and another 5 million tons of export capacity.

Grain will arrive at the port via the North-South Railroad which already carries iron ore to a next door mineral export facility operated by Vale. The new terminal will consist of four warehouses. One of the four warehouses will be operated by CHS from the U.S. with a second operated by Glencore and the other two operated by a consortium including Amaggi, Louis Dreyfus, and CGG Trading. All four warehouses are expected to be operational by the end of March.

The goal of the Northern Arc project is to reduce the cost of exporting grain while at the same time relieving the chronic congestion at Brazil's main grain ports of Santos in the state of Sao Paulo, Paranagua in the state of Parana, and Rio Grande in the state of Rio Grande do Sul.

CHS is the largest agricultural cooperative in the United States, but its Brazilian operations involve grain origination and export as well as input sales. In 2014, CHS exported more than two million tons of soybeans and corn and that is expected to increase to more than three million tons in 2015. The company will export grain from the new Tegram grain terminal as well as from four other ports including: Rio Grande, Paranagua, Santos, and Vitoria. CHS will originate the grain from their inland facilities at Bom Jesus, Piaui, Ribeirao Cascalheira in eastern Mato Grosso, and Canarana also in eastern Mato Grosso.