AIM listed pan African agricultural company Agriterra Ltd, announced over the weekend 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 on which it plans to build a new 2,000m2 processing and management facility”.
This it revealed “is part of its strategy to become a leading buyer, trader and producer of high quality, sustainable and traceable cocoa in Sierra Leone”. Agriterra said 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 the company furthered “will dry and process cocoa beans ready for TFL to export and it will also house administrative and buying offices as well as vehicle maintenance facilities”.
“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” Agriterra Boss Andrew Groves comment.
The company also intends 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 its commodities. The Agro firm discloses it is in “negotiations to secure a 15-acre site in the New Airport Development Zone”.
The company also said its “efforts” to build relationships with farmers across the country and increase its buying network are also “progressing encouragingly”. This it went on “is the backbone to the business”.
Agriterra is now working with over 3,500 farmers and is building a network of buying points with a target of achieving 40 buying points by the end of the year. The firm also additionally continues to assess options to expand 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.” Agriterra said.
Agriterra has also entered Sierra Leone’s palm oil sector following what it said was “the lease of 45,000 hectares of land in Pujehun District”.
The agro firm on Wednesday posted a pre-tax loss on continuing activities of US$3.5 million compared to a pre-tax profit of US$0.1 million in the comparative previous period on turnover of US$5.3 million.
The reduction in profit it said “was mainly due to the company’s retention of stock in anticipation of a strong second half in response to the excellent harvest in Mozambique, as well as increased investment in the beef ranching operations and their associated costs”.
The company said it had cash of US$11.4 million – an increase from year end due to a share placing, which had raised US$15 mln.
“We are operating in a fast growing sector and the demand for quality investment grade businesses in Africa is growing, something that will benefit us going forward,” said Agriterra chairman Phil Edmonds in a statement on Wednesday.
“I remain extremely positive about our business and its growth potential.”
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