TIDMAGTA
RNS Number : 8939W
Agriterra Ltd
07 February 2012
Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector:
Agriculture
7 February 2012
Agriterra Ltd ('Agriterra' or 'the Company')
Operations Update from Cattle Ranching Division
Agriterra Ltd, the AIM listed pan African agricultural company,
is pleased to announce that Mozbife Ltd, its 100% owned beef
ranching operations in Mozambique, continues to perform well, as
the Company fulfils its strategy of becoming a leading beef
producer in Southern Africa.
Overview:
-- Aggressive expansion strategy brings total herd size to 3,750
- on course to hit 10,000 head by 2015
-- Prized Beefmaster cattle breeding herd at Mavonde exceeds
1,000 - achieving average sales of $1,100 per carcass
-- Dam nearing completion at Mavonde - 48 billion litre dam will
increase capacity from 1.5 to 7 head per hectare
-- Increase in capacity at Dombe Ranch continues through land
clearance and improvement in infrastructure
-- Successful Beefmaster/Brahman cross breeding programme at Dombe
-- Rolling head capacity at Vanduzi feedlot doubled to
approximately 2,000 head every three months - sales of over 200
carcasses per month at an average price of U$835 per carcass
-- Abattoir at Chimoio on track to commence operations in August 2012
-- Butchers shops to open to increase margins achieved on beef
operations and complete 'field to fork' strategy
Euan Kay, Agriterra Executive Director said, "The aggressive
expansion strategy which we have initiated at our beef operations
in Mozambique continues to yield results for the Company and we are
now generating significant revenues from cattle sales from the
Vanduzi feedlot. This ramp up in operations will continue during
2012, as we focus on the continued enlargement of our Beefmaster
breeding herd at Mavonde, where we are achieving average sale
prices of $1,100. In addition, the cross-breeding programme at
Dombe continues to bear fruit, increasing our total herd size to in
excess of 3,750. The continued development of our Vanduzi feedlot
and abattoir at Chimoio, in addition to establishing butchers'
shops, are the key final elements in our vertically integrated beef
business, enabling Mozbife to benefit from the full uplift in value
for slaughtered and butchered products. With this in mind, as we
move into the 2012/2013 financial year, I am confident that Mozbife
will contribute a further high margin revenue stream, in addition
to our maize and cocoa operations. These, together with the palm
oil operations which we are establishing in Sierra Leone, will
substantially enhance Agriterra's financial performance and value
accretion potential moving forward."
Mozbife continues to successfully develop its vertically
integrated beef operations in Mozambique which consist of the 1,000
hectare Mavonde Stud Ranch, the 15,000 hectare Dombe Ranch, the
Vanduzi Feedlot and the 4,000 head per month capacity Chimoio
Abattoir currently under construction. The total Mozambique herd
size now stands at 3,750 head, the increase being achieved through
successful breeding at the Company's ranches and importing prime
Beefmaster stock from South Africa. The Company remains on target
to have a total herd of 5,000 head by the end of 2012 and 10,000 by
2015.
The Mavonde Ranch
The 1,000 hectare Mavonde Stud Ranch continues to expand both in
terms of cleared land and herd size. Current herd size exceeds
1,000 Beefmaster cattle, which are prized for their top weight
gaining ability and adaptability to hot climates, following the
recent arrival of 198 Beefmaster cows and 15 bulls from South
Africa. A further 400 cows have also been purchased with delivery
expected this quarter. The construction of a 48 billion litre dam
is near completion with capacity to irrigate in excess of 4,000
hectares and provide 132kV of hydroelectric power for the
irrigation pumps. With full irrigation, the head to hectare ratio
at Mavonde will be increased from 1.5 to 7 head per hectare.
Furthermore, negotiations are underway to acquire additional land
to enlarge the Mavonde ranch to 5,000 hectares. Current price per
carcass sold from the ranch is in the region of US$1,100.
The Dombe Ranch
The 15,000 hectare Dombe Ranch now has in the region of 1,500
head. The herd is principally Beefmaster augmented with native
cattle, such as Brahman, as part of a cross-breeding programme to
create a bloodline with good meat yields and high disease
resistance. Investment in the last three months has focussed on
infrastructure and land clearance, including the construction of
paddocks, improving road access, erecting 40km of fencing, and the
construction of staff head-quarters and accommodation. Furthermore,
seven boreholes have been drilled and fitted with pumps, tanks and
drinking troughs, with an additional seven planned. Holes are also
being drilled for the local community to provide clean drinking
water for the local residents and their livestock. A lease on the
land, DUAT, granted by Mozambican Government, runs until 2061.
The Vanduzi Feedlot
The Vanduzi Feedlot has an eight pen line with rolling capacity
of approximately 1,000 head every three months. An additional eight
pen line has recently been constructed to double the capacity.
Sales have reached over 200 carcasses per month and slaughter dress
out weight percentage increases have been between 58% and 63% over
the three month period, whilst an average price of U$835 per
carcass has been achieved to date. 1,050 hectares of land for
pasture and production of feed for the feeding pens has been
secured following the recent purchase of an adjoining 350 hectare
farm. Importantly, the Company is ramping up its local buying of
cattle to increase the through put at the feedlot and awareness is
building amongst the local community.
The Vanduzi Feedlot has good synergies with other companies in
the group, such as using bran, the by-product from the nearby DECA
maize processing facility, as a feed supplement.
The Chimoio Abattoir
Construction of the abattoir and office building at Chimoio is
complete. The Company is targeting a 4,000 head per month
processing rate, augmented using native animals from the local
community, including goats. The internal processing lines have been
ordered and are due to be shipped in March 2012 with operations due
to commence in August 2012. There are also plans to open a number
of butchers shops to further increase the margins on the beef
operations and fulfil the Company's strategy of becoming a 'field
to fork' producer.
** 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
Susie Geliher St Brides Media & Finance Tel: +44 (0) 20 7236
Ltd 1177
Notes
Agriterra Ltd is an AIM listed agricultural company with four
divisions: beef, maize, cocoa and palm oil. Its cattle ranching
business, Mozbife, 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 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 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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