AgDevCo expands portfolio in Mozambique with new investment
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The Guernsey-based company Agriterra on Tuesday revealed that over the ten-month period leading up to the end of March 2017 it has had a drop in revenue of 30 per cent and a made a loss of just over 3.6 million US dollars.
Agriterra is an agricultural company with maize and beef operations in Mozambique. It is based in Manica province but also has operations in Tete province.
According to a statement by the company’s Chair, CSO Havers, “the Agriterra board has always held the opinion that there is significant development potential in Mozambique’s agricultural markets, as a result of the natural growth in demand which will develop as the local population gains spending power, coupled with the growth uplift that has long been expected from the development of the liquefied natural gas industry in the north of the country”.
Havers was encouraged by the recent decision by the Italian hydrocarbon company to take its final investment decision to go ahead with the development of seven billion dollar LNG project off the coast of Cabo Delgado province. He holds that this could herald the return to high growth rates, which will have a positive effect on the demand for the company’s products.
Havers admitted that the last three years have been difficult for the company. He highlighted the decline in commodity prices, the prolonged and severe drought, and the significant weakening of the Mozambican currency, the metical. In addition, Agriterra was particularly badly hit by the low-level insurgency of the opposition party Renamo in the centre of the country, where the company is based.
Indeed, the actions of Renamo armed militias led the company to take the decision last year to destock its three cattle ranches in Manica province.
However, Havers welcomed recent developments with an effective ceasefire between the government and Renamo, a rise in the value of the metical, and an end to the two year long drought.
Agriterra’s grain operations were hit by the poor economic conditions, and as a result the grain division made a loss before tax of 890,000 dollars. Meanwhile, its beef division returned a loss before tax of 1,587,000 dollars.
Despite the difficult economic conditions over the previous three years, Havers is optimistic for the future. He stated “we will continue to assess new retail units in strategic locations to take advantage of regional development opportunities. While the initial focus is likely to be in northern Mozambique, we remain open to opportunities countrywide”.
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