Operations Update & Acquisition of Land

RNS Number : 7362V

Agriterra Ltd

17 January 2013

 



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

17 January 2013

Agriterra Ltd ('Agriterra' or 'the Group)

Mozambique Operations Update & Acquisition of Land Package

Agriterra Ltd, the AIM listed pan African agricultural company, is pleased to announce a further expansion to its multi-commodity agricultural product range and a positive update at its beef and maize operations in Mozambique.

Overview

·    Diversification of portfolio and revenue stream through acquisition of a 2,500 hectare farm with a producing banana plantation, macadamia orchard and land capacity for cattle

·    50 acre banana plantation producing initial weekly yields of approximately 7 tonnes - production anticipated to increase significantly with development of plantation

·    Macadamia orchard planted - commercial production targeted within 24 months

·    Significant expansion of banana plantations, macadamia orchard, and cattle pasture planned to maximise revenue generation

·    Farm located approximately 25km north of the Group's Mavonde Stud Ranch and irrigated by bordering Nyadzonya river

·    Work underway to increase capacity at Mavonde Stud Ranch by 100% following purchase of adjoining 1,000 hectare farm

·    48 billion litre Mavonde dam now full with capacity to irrigate ranch for four years and support head to hectare growth - current stud breeding herd stands at 900 head and target to expand to 2,500 head by end 2013

·    Strong initial trading at Chimoio beef retail unit - sales of $1,000 to $1,500 per day and increasing

·    Second beef retail unit expected to commence trading in Tete by 31 January 2013  

·    Maize milling operations at Compagri operating near full capacity and generating improved revenues

Euan Kay, Agriterra Executive Director said, "The purchase of additional acreage in Mozambique provides a strong boost to our rapidly expanding beef operations, which are already producing significant revenues for the Group.  Turnover will be further enhanced by our new retail units, where initial daily sales of up $1,500 have been reported from our first shop in Chimoio.  In addition to this, Group revenues will be further bolstered and diversified by the acquisition of a producing banana plantation and macadamia orchard.  With a strong development strategy in place to maximise the value potential of this new land, we are well set to enhance shareholder value and strengthen Agriterra's position as a pan-African agriculture business."

** ENDS **

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

Andrew Groves	Agriterra Ltd	Tel: [phone]
David Foreman	Seymour Pierce Ltd	Tel: [phone]
Rick Thompson	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 five divisions: beef, maize, cocoa, fruit and palm oil.  Its cattle ranching business, Mozbife, has a herd in excess of 5,400 head, a land holding of over 21,000 hectares, a feedlot, a 4,000 head per month capacity abattoir and retail units.  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 also owns a proximal banana plantation and macadamia orchard.

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 maize meal, the African staple, and then sell it back to the local market, into supermarkets and to the World Food Programme.

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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