Update

RNS Number : 8532R

Agriterra Ltd

17 September 2014

 



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

17 September 2014

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

Update

Agriterra Ltd, the AIM listed pan-African agricultural group, provides shareholders with an update on its cocoa operations in Sierra Leone and its legacy oil interest in South Sudan.  

As a result of the serious and well-publicised Ebola outbreak and the associated precautionary restrictions on travelling in Sierra Leone, the Company has curtailed its activities in the region.  Vehicles, warehouse facilities and other assets of the Company's trading division are now being utilised by the International Federation of Red Cross and Red Crescent Societies and World Food Programme for food distribution (see link below).  This division, which was established to build a presence in the cocoa market, has therefore been suspended.  The cocoa trading was focussed primarily on building a presence in-country and providing a market entry point for buyers as a precursor to the establishment of Agriterra's own plantation, and the implementation of programmes involving the upgrading of local growers plant quality through plant distribution.  The Company is confident that ceasing trading will not have a materially adverse effect on its financial performance.   

The on-going development of the Company's Sierra Leone plantation has, until recently, continued during the Ebola outbreak, however, due to the current circumstances and the resultant restrictions in movement causing a shortage of labour, the original planting and clearance schedule has been restricted.  The hectarage planted to date is being maintained, as is the plantation infrastructure including warehousing, accommodation and equipment.  The state-of-the-art nursery continues to house plants which will now be used, if circumstances allow, to accelerate the Company's local initiatives to increase the quality of the local growers' stock.  It is envisaged that this distribution programme will be run in tandem with international agencies and companies looking to expand the productivity of cocoa farmers in West Africa.  The demand/supply model remains highly attractive for cocoa producers and West Africa remains a region suitable for mass production operations. 

The Company will continue to monitor the situation locally and will provide a further update to shareholders in its next financial results, which are due for publication no later than 30 November 2014.

Additionally, the Company announces that it has reached a successful settlement (receiving approximately US$5.6m in cash) with the Republic of South Sudan and Nile Petroleum Corporation Limited in respect of the Company's claims arising from its legacy oil interests in South Sudan. 

Phil Edmonds, Chairman of Agriterra, said, "We are giving as much support as possible to the local community and utilising our infrastructure and logistics capabilities to support both the Red Cross and World Food Programme.  We are maintaining a presence in Sierra Leone and remain optimistic regarding the development of the country's cocoa industry through the commercialisation of the sector, the establishment of plantations and the roll out of local planting initiatives aimed at building overall country supply and international recognition for the provision of quality cocoa.  We are also pleased that after several years of seeking to enforce our rights we have now reached settlement regarding our legacy oil claims in South Sudan."

www.wfp.org/countries/sierra-leone/stories/wfp-steps-up-assistance-to-meet-urgent-food-needs-of-families-and-communities-affected-by-ebola

** ENDS **

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

Phil Edmonds	Agriterra Ltd	Tel: [phone]
David Foreman	Cantor Fitzgerald Europe	Tel: [phone]
Rick Thompson	Cantor Fitzgerald Europe	Tel: [phone]
John Beaumont	Peat & Co.	Tel: [phone]
Susie Geliher	St Brides Media & Finance Ltd	Tel: [phone]
Charlotte Heap	St Brides Media & Finance Ltd	Tel: [phone]

Notes

Agriterra Ltd is an AIM listed agricultural company with three core divisions: beef, maize, and cocoa.  Its cattle ranching business, Mozbife, has an established breeding herd in excess of 4,800 head, a land holding of over 19,850 hectares, a 1,800 head feedlot, and established abattoir and retail operations.  In addition to selling meat from its own herds, throughput for the feedlot and abattoir is supplemented with 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 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 centred on its 3,200 hectares of plantation, which includes a 1.7 acre nursery, located 35km south-east of Kenema.  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. 

 

END

 

 

MSCEAKNKFEELEFF