A Success Story that Spans 50 Years!

Lowell W. Berry, founder of the Best Fertilizers Co. in 1932, had a vision to form California Ammonia Co. (CALAMCO), a joint venture involving The Best Fertilizers Co. and a group of California farmers. CALAMCO was incorporated in 1957 for the principal purpose of manufacturing and selling anhydrous ammonia to its own stockholder-patrons in accordance with their preferred patronage rights. 1958 marked the construction of the ammonia plant at Lathrop.

“As to the future, we pledge you our very best effort to insure an economic and profitable operation of California Ammonia Co. with policy and procedure to insure that every stockholder purchaser benefits proportionately.”–Lowell W. Berry, 1958. CALAMCO contracted with The Best Fertilizers Co., its industrial partner, for the management of its plant, and this type of partnership arrangement proved to be successful to CALAMCO for more than 25 years. In 1971 CALAMCO started the operation and management of an ammonia and nitric acid plant in Hanford, California. The plant was eventually sold in 1986 when it was no longer economical for CALAMCO to operate.

Keeping up with the changes... by 1977, the cost of natural gas and power required to produce ammonia had increased almost five-fold in a five year period. In 1978, financing of an ammonia terminal at the Port of Stockton was approved by CALAMCO's Board of Directors, and construction of the first tank began. The first vessel was received into the Stockton facility in 1979. By the end of 1981, CALAMCO had expanded to two 20,000 ton storage tanks and had established itself as a major terminal operation in the Western United States by importing ammonia from world-wide sources.

During 1982, when CALAMCO learned that its industry partner was planning to sell their fertilizer assets, CALAMCO's Board of Directors and management took several actions to ensure the profitable continuation of the company's activities. For the first time in its history, CALAMCO employed directly all of the operating staff at both the Port of Stockton terminal and the Hanford plant and relocated its administrative offices from Lathrop to Stockton, assuming all the general and administrative responsibilities. All property, plant, equipment, and inventory no longer necessary for CALAMCO's operations were sold to Occidental Chemical Company, and CALAMCO successfully made the transition to a stand alone company.

Another great leader in modern times, Mr. J.R. Simplot looked to California and saw the potential of expanding his operation in California agriculture by purchasing Occidental and a 45% interest in California Ammonia Co. The J.R. Simplot Company continued as the exclusive marketing agent for CALAMCO until November 1, 1985.

Perhaps the biggest and certainly one of the boldest steps for CALAMCO occurred on November 1, 1985 when CALAMCO began marketing its own products. This new arrangement became effective when CALAMCO's shareholders approved the new relationship between CALAMCO and J.R. Simplot Company. With this new relationship, Simplot entered into a new contractual arrangement with CALAMCO to purchase all of its California ammonia requirements directly from CALAMCO.

CALAMCO's life blood is a reliable supply of anhydrous ammonia. In order to ensure shareholders' needs be fulfilled on a consistent and economical basis, CALAMCO entered into a long term supply contract with the Ocelot Ammonia Company, located in Kitimat, British Columbia, Canada, with it's first ammonia shipment arriving in 1987. This Contract helped diminish vulnerability from exposure to erratic and unpredictable world markets.

CALAMCO opened negotiations on it's key ammonia supply contract with Mitsui Corporation/Pacific Ammonia in 1995. Mitsui Corporation purchased the Ocelot/Methanex ammonia plant in Kitimat, B.C. during the year in which CALAMCO held it's contract that was originally due to expire in 1997. Our new supply contract with Mitsui was set to expire in 2005 with an option to renew on an annual basis for as long as Mitsui continued to produce product at this plant. Unfortunately, due to high natural gas prices experienced throughout North America, continuing to operate this facility became too costly for Mitsui and the decision was made to idle production at the end of 2005. We are pleased to have secured a new, two-year supply contract with Koch Nitrogen which took effect January 1, 2006. Koch Nitrogen is one of the largest world market suppliers of nitrogen, with facilities in Trinidad, Venezuela, as well as in the United States. To date, your company has successfully received and distributed in excess of 6 million short tons of anhydrous ammonia through its Stockton facility.

In 1994 CALAMCO and the J.R. Simplot Company, were able to successfully renegotiate the operating contract between the two organizations. The contract defines the terms in which Simplot purchases ammonia for its needs in the organization's manufacturing plants in California. In March of 2001, CALAMCO and the J.R. Simplot Company entered into another, long-term contract to terminal UAN32 solution at our facility located at the Port of Stockton. CALAMCO built and operates a 40,000-ton capacity storage facility. Under the new contract, the J.R. Simplot Company procures and markets the UN32 solution which carries shareholder coverage.

CALAMCO's success story does not end here. Under the direction of your Board of Directors, CALAMCO's management continues to explore new sources of product and ways in which to enrich CALAMCO's future. We are committed to supplying our shareholders with a reliable source of product at the lowest possible cost, and to continue the vision set forth in 1957 by our founders. We hope you will decide to become a part of the CALAMCO success story by investing in your future with a company that has already proven itself to be a winner.

We hope you will decide to become a part of the CALAMCO success story by investing in your future with a company that has already proven itself to be a winner.