Agriterra revealed headway in its long-held desire to expand
into cocoa production, acquiring 1,750 hectares of plantations, and forecasting
further purchases with a windfall from a sale of oil interests.
The Africa-based corn-to-beef operator, chaired by former
England cricketer Phil Edmonds, said it had signed on a 50-year lease, with a
21-year extension option, on a site in Sierra Leone centred around a plantation
run by Beresfords until the country's civil war, which ran from 1991-2002.
Agriterra has already hired 160 workers to develop the site,
which Andrew Groves, the group's chief executive, said was "in a highly
productive and suitable area for cocoa production", and grows some coffee too.
And the group revealed it was in talks to acquire a further
2,000 of plantation land, some adjacent to the existing site, over which it
hoped to complete negotiations "in the near-term".
The acquisition follows Agriterra's purchase in 2011 of
Tropical Farms, a Sierra Leone-based cocoa trader, a deal which the company
said would herald expansion into cocoa production and processing.
"With this acquisition and investment, we are now entering
the second phase of our growth strategy focussed on developing our own
plantations," Mr Groves said.
The expansion is being bankrolled by the sale of Ethiopian oil
interests which Agriterra attempted to develop in its former guise of White
"We have an extremely strong treasury, having received an
initial $28m from the sale of our legacy oil asset, and I look forward to
completing additional acquisitions of land and building shareholder value
further," Mr Groves said.
Agriterra said it had acquired 250,000 cocoa seedlings,
sufficient to plant 200 hectares "that is in the process of being cleared", on
top of 56 hectares already in cultivation.
Peat & Co analyst Andy Cuthill estimated that "it will
take three or four years for newly-planted cocoa trees to achieve commercial
yields and hence generate profits".
However, the start of Agriterra's move into cocoa production
"does enable us to underline the value that this business will create for the
group over the lifetime of the plantations", valuing the cocoa overall cocoa
business at $26.2m in 2014.
"This accounts for about 1.5p of our total target price of
7.5p for the group," Mr Cuthill said.
Agriterra shares, which are listed in London, closed down
2.8% at 3.28p.