26 Mar 2014 13:09
26 March, 2014
AfriAg plc
("AfriAg" or the "Company")
AfriAg SA Expansion of Truck Fleet & Contract Wins
AfriAg (AIM: AFRI), the AIM-listed agricultural value chain investing company, is pleased to announce a significant expansion of AfriAg SA (Pty) Ltd ("AfriAg SA"), AfriAg's 40% owned agri-logistics unit.
AfriAg SA is expanding its fleet of Mercedes articulated trucks from 6 to 14, the first 5 of which have been delivered. Accompanying these new tucks are 8 new 15.2 metre refrigerated trailers, which have been delivered and are being prepared for operations. The new fleet is expected to commence operations in April once they have been registered for cross-border operations.
The requirement to increase the fleet has been driven primarily by new corporate agri-logistics contracts, the main one being the largest commercial growing organisation in Mozambique of fresh vegetables for export. This new 2 year contract requires AfriAg to move, in a strictly controlled cold chain environment from source to final destination, multiple loads per week of fresh produce by truck to Johannesburg in South Africa and airfreight the majority of this production on to the UK and for distribution to the major UK supermarkets.
AfriAg SA has also recently secured logistics contracts to manage and move lucerne (alfalfa) forage exports from the Douglas and Kimberley regions in South Africa to dairy and government animal feed contracts in to the United Arab Emirates with around 50 containers currently being shipped weekly from Douglas to the Port of Durban and on to the Middle East.
AfriAg SA also uses a number of transport sub-contractors to assist with current demand for the Company's agri-logistics services within southern Africa.
AfriAg plc owns 40% of AfriAg SA (together, the "Group") as one of its investments in line with the Company's stated investing policy. The Company also holds interests in a portfolio of quoted agricultural companies (as detailed in the announcement of 23 October 2013) and these are currently valued at approximately £205,000 on the basis of current mid-market prices. AfriAg will manage its investment portfolio in line with its investing policy. Investments may be realised from time to time when the directors deem appropriate bearing in mind their performance and other investment opportunities available, with a view to generating returns for shareholders.
David Lenigas, AfriAg's Chairman, commented:
"The last 6 months for AfriAg SA have been focused on servicing their existing customers and growing a corporate client base that require reliable transportation of their perishable produce from source to markets within southern Africa and to Europe, the Middle East and Asia.
The outlook for 2014 for AfriAg SA appears to be strong and we see new capacity required for two way traffic north and east of the South African boarder, and the Group expects to add additional fleet capacity over the coming year.
AfriAg will continue to evaluate opportunities in the agricultural sector which are complementary to AfriAg SA and the other investments held."
For further information please contact:
AfriAg plc: + 44 (0) 20 7440 0640
David Lenigas/Donald Strang
Nominated Adviser and Broker:
Allenby Capital Limited +44 (0) 20 3328 5656
Nick Athanas/Nick Harriss/Michael McNeilly
Public Relations:
Square1 Consulting +44 (0) 20 7929 5599
David Bick/Mark Longson