Last checked at 18 Oct 2010 07:00
Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector: Agriculture
18 October 2010
Agriterra Ltd ('Agriterra' or 'the Company')
Operations Update
Agriterra Ltd, the AIM listed company focussed on the agricultural sector in central and southern Africa, is pleased to announce record buying and sales in an update on its grain processing and cattle ranching operations in Mozambique.
Processing and Milling:
DECA - Chimoio
·; Successful buying season with very strong inflows from local farmers - currently buying from circa 350,000 smallholders
·; Approximately 22,000 tonnes of maize total through put
·; Sales continue to exceed expectations and are significantly ahead of last year: May up 174%, June up 208%, July up 149%, with August and September up over 100%
·; The milling operation has been running 24 hours a day, 7 days a week since the beginning of October, which will increase production by a further 30% from current record levels
Compagri - Tete
·; Higher than anticipated inflows of grain this year with over 13,000 tonnes of grain now in stock
·; Milling operations commenced
·; New local management team in place and operations performing strongly under new leadership
·; Expansion potential high as local recognition of the operation grows
General
·; Agriterra holds the largest reserve of maize in Mozambique
·; Strong demand particularly with the wheat shortage - DECA and Compagri well positioned to cope with demand owing to increased stock levels
·; Prices for finished product expected to increase as demand continues to rise
·; Exporting of bran, the by-product of the maize processing operation, will commence this month to Zimbabwe, where demand is strong
MOZBIFE Cattle Ranching
·; Received Centro de Promocao de Investimentos approval (Major Project Investment Approval) from Government which will allow the Company to aggressively move forward with its expansion plans
·; Currently has over 1,600 head of cattle across two ranches
·; Calving season on both Mavonde and Dombe ranches has started with regular veterinary checks reporting cattle in good condition
·; Mavonde irrigated pasture area extended to almost 300 hectares in anticipation of large number of calves
·; Final planning for 42,200 Megalitre irrigation dam completed. This dam will be situated on the Mavusi River and push back approximately 8km when full. Construction is envisaged to start in early 2011. On completion this will supply water for a further 400Ha of irrigated pasture
·; The Dombe Ranch cattle are being purchased in large numbers from the local population for fattening on grass before moving to the feedlot
·; The Vanduzi abattoir/feedlot project is progressing well with first feed pens completed and boundary fencing progressing well. First cattle are expected at the feedlot imminently
·; Extensive land clearing and preparation currently underway for planting of 200Ha maize crop to ensure feed security of feedlot. This will be followed by a 300Ha crop of soya beans for feedlot purposes
Agriterra Executive Director Euan Kay said, "We are making fantastic progress in all areas of the business. The record buying season at both DECA and Compagri continues and the sales of our maize and bran are at levels never experienced. We are the largest holder of maize in the country and are increasing milling capacity to cater for demand.
"Our beef operations are also progressing extremely well, with the granting of Major Project Investment Approval paving the way for a rapid investment programme. The herd is increasing, now standing at over 1,600 head and we are expecting the first arrivals of cattle at our Vanduzi feedlot imminently. In tandem with this, the land clearing and preparation programme that is currently underway will provide additional maize, and subsequently soya, to ensure our beef operations continue to expand which we believe will deliver significant value to shareholders."
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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 |
| 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 |