Beef Operation Update

RNS Number : 8824D

Agriterra Ltd

23 May 2012

 



Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector: Agriculture

23 May 2012

Agriterra Ltd ('Agriterra' or 'the Company')

48 Billion Litre Dam Completed Enabling Rapid Increase in Herd Size

Agriterra Ltd, the AIM listed pan African agricultural company, is pleased to announce that Mozbife Limitada, its 100% owned beef ranching business in Mozambique, continues to make strong progress as the Company fulfils its strategy of becoming a leading beef producer in Southern Africa.

·    Further expansion brings total herd size to over 4,000 head - on target to reach 10,000 head by 2015

·    Construction of 48 billion litre dam completed at Mavonde Stud Ranch ('Mavonde') - will increase capacity from 1.5 to 7 head per hectare with irrigation of pastures

·    Additional 350 hectares acquired at Mavonde bringing total size to 1,350 hectares - acquisition of a further 1,000 hectares under negotiation

·    280 additional high quality Beefmaster heifers imported from South Africa and delivered to Mavonde

·    Intensive buying campaign underway for Dombe Ranch in Tete and Save areas - acquisition of approximately 100 native cattle per week to augment cross-breeding programme and rapidly increase total herd size

·    900 cattle on site at Vanduzi Feedlot - sales of 200 per month at an average price of US$1,050 per carcass

·    Chimoio Abattoir construction progressing well - slaughter line shipped and due by mid-June 2012 and first refrigeration and panelling delivery by end of May 2012

·    Two butchers shops identified in Chimoio and Tete - equipping and fitting underway and due to be operational by end of June 2012

Euan Kay, Agriterra Executive Director said, "Our beef operations continue to expand at an exceptional rate and we are now approaching the stage where we will benefit from the full uplift in value for slaughtered and butchered products with the commissioning of our abattoir and advent of Mozbife butchers shops.  Our carcasses from Vanduzi are already fetching an average of US$1,050 and this will increase significantly once the abattoir and butcheries come on stream resulting in higher margins and vastly increased revenue generation which we will capitalise on in the coming months. 

"We continue to develop the infrastructure required to support a significant breeding herd, and the completion of our 48 billion litre dam at Mavonde is an important element of this objective.  Its completion will provide irrigation for the 1,250 hectare Mavonde Ranch, with surplus capacity as the ranch continues to expand.  In addition, to enable an increase in capacity from 1.5 to 7 head per hectare, the dam will also produce 132kVa which will power the irrigation pumps which have been purchased and are expected to be on site by the end of May 2012.

"In addition, as part of the Company's Social Responsibility and Uplift Programme, 300,000 tilapia fingerlings have been released into the Mavonde dam reservoir by the Governor of the Manica Province.  Agriterra plans to release a further 1.75 million fingerlings into the reservoir over the next six months and intend to establish a fishing co-operative with the local community.  The Company will provide the local community with a small boat and gill nets and purchase the fish from them for inclusion in animal feed. 

"With these developments in mind, Mozbife continues to grow rapidly and we remain well on course to achieve our target of a 10,000 head herd by 2015.  Together with our two additional increasing revenue streams from our maize and cocoa operations, we remain well placed to continue to enhance Agriterra's financial performance throughout the 2012/2013 financial year and beyond as we build a significant pan-African agriculture company." 

** ENDS **

For further information please visit www.agriterra-ltd.com or contact:

Andrew Groves	Agriterra Ltd	Tel: [phone]
Jonathan Wright	Seymour Pierce Ltd	Tel: [phone]
David Foreman	Seymour Pierce Ltd	Tel: [phone]
Andy Cuthill	MC Peat & Co LLP	Tel: [phone]
Susie Geliher	St Brides Media & Finance Ltd	Tel: [phone]

Notes

Agriterra Ltd is an AIM listed agricultural company with four divisions: beef, maize, cocoa and palm oil.  Its cattle ranching business, Mozbife, currently has a 4,000 strong herd, a land holding of over 16,250 hectares, a feedlot and a 4,000 head per month abattoir which is under construction.  In addition to selling meat from its own herds, throughput for the feedlot and abattoir will be supplemented using cattle bought in from local communities.

The Company's maize buying and milling operations, DECA and Compagri, are located in Chimoio and Tete in central and north-western Mozambique respectively.  These collect maize from circa 350,000 farmers using the Company's own vehicle fleet, process it into mealie meal, the African staple, and then sell it back to the local market, into supermarkets and to the World Food Programme.  Combined sales for the year ended 31 May 2011 totalled 28,822 tonnes maize meal generating revenue of US$13.6 million.

Agriterra's cocoa business is based in Sierra Leone, through its 100% subsidiary Tropical Farms Limited, which is currently a buying and trading operation, but provides an ideal conduit to branch out into cocoa production in West Africa.  Its strategy is to establish itself as a secure, sustainable and traceable source of supply to meet the requirements of the major cocoa consumers who are placing increased emphasis in this area.

The Company has expanded its portfolio of agricultural products through the addition of palm oil, and holds a lease over approximately 45,000 hectares of brownfield agricultural land in an area suitable for palm oil production in the Pujehun District in the Southern Province of Sierra Leone.  This area of Sierra Leone, which is close to the Liberian border, receives one the highest levels of rainfall in Sierra Leone, which in itself, receives some of the highest rainfall globally.  In addition, the lease area is located on the equatorial belt, which is the most favourable geographical location for palm oil production. 

 

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