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Where’s the beef?
Agriterra Ltd, the AIM listed pan-African agricultural group, has released operations update from Mozbife Limitada , the Company’s expanding beef business in Mozambique.
Highlights:
· Stocking ratios are being significantly increased at the 2,350 hectare Mavonde and 2,500 hectare Inhazonia farms through the implementation of Phase 2 of the Company’s multi stage irrigation role out programme
· On completion of Phase 2 in Q4 2014, a total of 490 hectares of land will be irrigated allowing additional animals to be accommodated on the land
· Post Phase 2, the Company’s three ranches will have a carrying capacity of 13,800 animals:
o Mavonde breeding ranch (2,350 hectares) will have ~370 hectares irrigated pasture with total carrying capacity of ~5,600 animals, comprising the breeding herd and their calves of up to 12 months old
o Dombe breeding ranch (15,000 hectares) has a planned capacity of ~6,000 animals comprising the breeding herd and their calves of up to 12 months old
o Inhazonia grass fattening ranch (2,500 hectares) will have ~120 hectares irrigated pasture with carrying capacity in excess of 2,200 steers aged between 12-15 months prior to them being sent to the feedlot
o Further land acquisitions of ~7,000 hectares contiguous to Inhazonia are also being assessed
· The company’s breading herd currently stands at ~4,800 with a further ~1,300 cattle being fattened at the ranches which will later pass through the feedlot
· Further to the three ranches, the Vanduzi feedlot is currently well stocked with ~1,800 animals, and able to provide 600 animals per month to the abattoir from June 2014, to cater for the increasing demand from the Company’s four butcheries in Chimoio, Beira, Tete and Manica as well as additional volume contracts
· As forecast in the Company’s interim results on 26 February 2014, the new retail outlet in Beira, the second largest city in Mozambique, is performing extremely well, generating revenues of in excess of US$70,000 per month since opening and on an upward trend
· With strong demand for beef and an increasing herd carrying capacity, the Group is looking at expansion opportunities in northern and central Mozambique, to take advantage of the resource and extractive industries growth, as well as increasing demand from the local population – Mozambique growth rates are forecast to continue as one of the fastest growing economies in sub Saharan Africa, significantly above the average world rates.
Agriterra Director Andrew Groves said, “Mozbife continues to perform as it delivers an upward trajectory through optimising its operations in order to achieve its development objectives for beef. With carrying capacity increased across its 19,850 hectare ranches, herd and breeding stocks expanding, feedlot operations being optimised and retail units experiencing strong demand, the beef business is showing increasing earnings visibility and scalability. This, in tandem with our grain and processing business and the continued development of our 3,200 hectare cocoa planation in Sierra Leone, set against a backdrop of increased interest in sustainable supply, make us excited about the future.
“We have a well-capitalised business with a cash and cash equivalents of ~US$8 million and net asset value of US$57.5 million as last reported in November 2013, against a current market capitalisation of ~$25 million. The Group is going from strength to strength and with continued optimisation and expansion the true value of this business should be recognised.”
