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Fire damages stored crops at Alliance Grain site

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A fire at an Alliance Grain Traders (AGT-T) facility in Turkey has damaged 7,000 to 10,000 tonnes of pulse and grain crops, but will not have a significant impact on earnings, the Canadian legume processor said today.

Alliance Chief Executive Murad Al-Katib said the company has temporarily closed pulse and grain processing facilities at its Arbel Group site in Mersin, Turkey, until January 3 after the fire on Monday extensively damaged two warehouses and a loading and receiving area.

It expects to resume normal production by the third week of January. Meantime, it will service its shipments with products from other origins if needed.

"Warehouses and inventory are very easy to replace," Al-Katib said in a conference call with analysts. "This (damage) is certainly not of the magnitude it could have been."

Production facilities were not damaged, but site cleanup and rebuilding warehouses will cause delays, Al-Katib said.

The cost of replacing warehouses and inventory is about $10 million to $12 million, with insurance covering the losses, Al-Katib said. He said he doesn't expect the fire to have a material effect on operational results.

Alliance, which began nearly ten years ago in Canada as Saskcan Pulse Trading, has moved aggressively to expand its global reach, acquiring the Turkish facility last year and buying London trading house A. Poortman Ltd. and a south Australian pulse processor this year.

The Arbel facility produces commercially packaged pulse, rice and bean products for both the Turkish market and export. It also produces pasta from durum wheat and exports it under the Arbella Pasta brand.

The fire has not affected pasta production.

Based on initial reports, the fire started when a truck and trailer carrying white beans and operated by a third party caught fire, the company said.

The fire's cause is under investigation, and Alliance said it looks to be accidental. No one was hurt and there is no material impact to the environment, Alliance said.

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