The new facility, which will be built in China, is expected to process 500,000 metric tons of raw rice bran annually.
The venture is the result of an agreement with the Bright Food Investment Group a subsidiary of Bright Food Group, which claims to be China's largest food conglomerate.
According to NutraCea, the agreement is a "major opportunity" for the firm to enter the Chinese market by introducing rice bran oil, stabilized rice bran, and defatted rice bran into the country.
Scale
The facility is expected to be completed in 2010.
According to NutraCea, it will be the world's largest rice bran oil and rice bran derivative manufacturing plant.
It is expected to generate over $200m in annual gross revenues based on today's market prices.
Under the terms of the agreement, NutraCea will provide 80 percent of the capital and retain 72 percent of the ownership and profits of the venture.
Bright Group and a strategic advisor to the venture will contribute 20 percent of the capital and receive 28 percent of the profits.
The agreement is subject to "normal and customary" government approval in China, which NutraCea said is "not anticipated to cause any delays".
Stabilization technology
The new plant will see the implementation of NutraCea's proprietary stabilization technology, which the firm says will reduce production costs of the rice bran oil, increase the yield and enhance the nutritional profile of the end products.
Health benefits According to the company, rice bran oil can be used in any applications where edible oils are used.
It contains vitamin E complex and other micronutrients.
It is also said to be a naturally occurring source of antioxidants such as tocopherols, tocotrienols, gamma oryzanol, phytosterols, polyphenols and squalene, which can help fight free radicals and combat the effects of aging.
In addition, because of its balance of saturated, monounsaturated and polyunsaturated fats, rice bran oil is thought to contribute to the prevention of cardiovascular disease by improving serum cholesterol levels.
Chinese market According to Leo Gringas, NutraCea's chief operating officer who will be heading up the new venture, there is strong market potential for rice bran products in China.
The firm's defatted bran and its stabilized rice bran are "highly marketable " in China, he said.
Bright Food Group said the venture will allow it to provide "healthier and higher quality food" to the public.
The company currently distributes to over 50,000 retail outlets.
NutraCea and Bright Food Group said they plan to enter into future agreements that will see the construction of additional facilities of similar size.
South America NutraCea, which has until recently focused its activities on stabilized rice bran, entered the edible oil market earlier this year, with the purchase of South America's largest rice bran oil processing facility.
The $14m purchase of Irgovel is expected to allow NutraCea to produce an initial 70,000 tons of rice bran oil annually.
The plant, located in Pelotas, Brazil, was operating at one-third of its capacity at the time of purchase in February, but NutraCea said it would invest $4-$6m to refurbish, upgrade and install new equipment.
The firm expects to have completed this project by the end of 2008.