Joint Ventures with International Partners November 7, 2005

Joint Ventures with International Partners

November 7, 2005

CHS Inc.Who Are We?

• Farmer Owned Cooperative

• $12 Billion in Sales

• 5,700 Employees

• Domestic and International Business

History of Joint VentureVentura Foods

• Holsum Foods (CHS)- Oil Based Foods- Acquisitions- 100% Owned

• Wilsey Foods (Mitsui)- Oil Based Foods- Acquisitions- Large Customer of (CHS)

DuplicationSynergy Potential

1st Joint Venture Tasks

• CEO to CEO

• Reason for Joint Venture – Vision- National (Size and Scale)

• Agree on Basic Issues- Governance- Ownership

Formation of Joint Venture

• Open Communications

• Mutual Benefit

• Trust Between Partners

Hurdles to Overcome Beyond Business

• Culture

• US Farmer Owned CooperativeGlobal Japanese Corporation

• 50/50 Partnership

• Board Trip to Tokyo, Japan

Completed Deal August 1996

• $350 Million Sales

• $8.5 Million Profits

TODAY

• $1.2 Billion Sales

• $60-70 Million Profits

• Excellent Results

• Relationship Strong

• Platform for CHS Food Business

United HarvestCHS / Mitsui

Grain Export Joint Venture

• Vancouver / Kalama- PNW- Rail - Shuttles

Mitsui Brought

• Terminal

• Global Customers

CHS Brought

• Terminal

• Grain Origination

• Terminal Transportation Expertise

Objections

• Terminal Efficiencies

• Origination / Export Partnership

• Financial Reasons

International Partners

• Similar to Domestic

• Common Objectives

• Open Communication

• Trust Between Partners

• Respect of Cultures