DECA

Update on Cocoa Operations in Sierra Leone

RNS Number : 0347Y
Agriterra Ltd
24 February 2012
 



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

24 February 2012

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

Update on Cocoa Operations in Sierra Leone

 

Agriterra Ltd, the AIM listed pan African agricultural company, announces that its wholly owned subsidiary, Tropical Farms Ltd ('TFL'), has been granted a 50 year lease, with an option to renew at the end of the term, over five acres of land in Kenema, Sierra Leone, on which it plans to build a new 2,000m2 processing and management facility.  This is part of its strategy to become a leading buyer, trader and producer of high quality, sustainable and traceable cocoa in Sierra Leone.

 

The five acre site is adjacent to a new dual carriageway, which is the main artery to the cocoa growing regions and is anticipated to be extended and connect to the Guinean border.  The planned 2,000m2 facility will dry and process cocoa beans ready for TFL to export.  It will also house administrative and buying offices as well as vehicle maintenance facilities.  The facility will be constructed and equipment and processes installed will be of international standard as part of TFL's expansion of its collateral management programme from Freetown to upcountry Sierra Leone. 

 

Andrew Groves, Agriterra CEO said, "Acquiring this strategic land position, ahead of building a new processing facility, advances our strategy to establish an end-to-end logistics chain for export and become one of the leading traders of sustainable and traceable cocoa in Sierra Leone by the end of 2012.  We also hope to build a much larger state-of-the-art collateral management facility in Freetown to serve as the main hub within Sierra Leone, providing access to the international markets for all of the commodities that TFL is involved; in this respect, we are progressing negotiations to secure a 15-acre site in the New Airport Development Zone.

 

"Our efforts to build relationships with farmers across the country and increase our buying network are also progressing encouragingly.  This is the backbone to the business so we are delighted to now be working with over 3,500 farmers and to be building our network of buying points with a target of achieving 40 buying points by the end of the year.   Additionally, we continue to assess our options to expand our commodity reach to include coffee and palm oil. 

 

"We remain highly confident about the future of TFL, particularly in light of the highly attractive economic fundamentals of the cocoa market, and believe that we are ideally positioned to build on our standing as a leading trader of high quality sustainable and traceable cocoa."

 

** ENDS **

 

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

Andrew Groves

Agriterra Ltd

Tel: +44 (0) 20 7408 9200

Jonathan Wright

Seymour Pierce Ltd

Tel: +44 (0) 20 7107 8000

David Foreman

Seymour Pierce Ltd

Tel: +44 (0) 20 7107 8000

Andy Cuthill

MC Peat & Co LLP

Tel: +44 (0) 20 7104 2332

Hugo de Salis

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

Susie Geliher

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

 

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 2,350 strong herd, a land holding of over 16,000 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 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 TFL, 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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