Company Presentation April 2013 Agriterra is a rapidly growing - - PowerPoint PPT Presentation

Company Presentation April 2013

2 | AGRITERRA LIMITED | APRIL 2013

Agriterra is a rapidly growing London-listed pan- African agricultural company with established beef, cocoa production, fruit orchards and trading, maize farming and processing.

3 | AGRITERRA LIMITED | APRIL 2013

DISCLAIMER

This presentation (‘the Presentation’) relating to Agriterra Limited (‘the Company’) does not constitute or form part of, and should not be construed as an

• ffer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for any securities in the Company in any jurisdiction. Neither this

Presentation, nor any part of it nor anything contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on in any connection with or act as an inducement in relation to a decision to purchase or subscribe for or enter into any contract or make and other commitment whatsoever in relation to any such securities. In particular, details included in this Presentation are subject to updating, revision, further verification and amendment and refer to events as having occurred which have not occurred at the date of this Presentation but which are expected to happen in the

• future. This Presentation does not constitute a recommendation regarding the securities of the Company. The contents of this Presentation are

confidential and may not be copied, distributed, published or reproduced in whole or in part, or disclosed or distributed by recipients to any other person. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this Presentation or on its completeness, accuracy or

• fairness. No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of their affiliates, respective directors,
• fficers, employees, agents or advisers as to the accuracy, completeness, or fairness of the information or opinions contained in the Presentation and no

responsibility or liability is accepted by any of them for any such information or opinions. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates or forecasts and nothing in this Presentation is

• r should be relied on as a promise or representation as to the future. This Presentation is exempt from the general restrictions in section 21 of the

Financial Services and Markets Act 2000 ('FSMA') on the communication of invitations or inducements to engage in investment activity on the ground that it is only being made to or directed at persons who fall within the exemptions contained in Articles 19(1) and 49(2) respectively of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') and persons who are otherwise permitted by law to receive it (together 'relevant persons'). This Presentation must not be acted on or relied on by persons who are not otherwise permitted by law to receive it (together 'relevant persons'). Any recipient of this Presentation who is not a relevant person should immediately return this Presentation to the Company, not attend this Presentation and take no other action. The distribution of this Presentation in any other jurisdictions may be restricted by law and persons into whose possession this Presentation come should inform themselves about, and observe, and such restrictions. By attending this Presentation, you agree to be bound by the restrictions in this disclaimer.

4 | AGRITERRA LIMITED | APRIL 2013

OVERVIEW

• AIM listed agricultural company in Africa with three key divisions: cattle ranching,

cocoa trading and plantation development, maize farming & milling

• Capitalising on the rapidly growing agricultural market in sub-Saharan Africa to

become a leading food provider

• Market capitalisation of $42 million underpinned by strong cash treasury:
• US$28 million received 31 January 2013 from Marathon Oil for legacy oil assets in

Ethiopia (+ an additional $10 million on commercial discovery)

• Further $17.7 million due in compensation for legacy work undertaken in South Sudan
• Highly experienced board with considerable knowledge in agriculture and logistics

within sub-Saharan Africa

5 | AGRITERRA LIMITED | APRIL 2013

KEY DATA

Market AIM Ticker AGTA Share Price 2.5p Shares in Issue 1,059,716,239 Market capitalisation £26.5 million NOMAD and Joint Broker Cantor Fitzgerald Europe Joint Broker MC Peat & Co. Auditors Baker Tilly Lawyers Salans

10.08% 4.98% 3.77% 3.77% 3.28% 77.39% Beyond Africa Fund Limited Libra Fund LP Gartmore Investment Limited Oppenheimer Funds Inc Directors Others

6 | AGRITERRA LIMITED | APRIL 2013

AFRICA IN NUMBERS

54

sovereign states

1

billion people

US$2

trillion: Africa’s collective GDP (more

than India)

20%

compound growth in FDI projects 2007-11

7

African countries among the 10 fastest growing economies in the world 2010-15

5.5%

Africa’s share of global FDI projects

3 of the top 5

fastest growing investors into new projects in Africa are African

US$85

billion funding for African infrastructure in 2010

35 African countries

ahead of China on the EIU’s Democracy Index

35 African countries

ahead of Russia on Transparency International’s Corruption Perception Index

7 | AGRITERRA LIMITED | APRIL 2013

THE AFRICAN GROWTH STORY

8 | AGRITERRA LIMITED | APRIL 2013

GROUP PRODUCT RANGE

Mavonde and Dombe ranches Vanduzi feedlot, abattoir and butchers Cocoa buying and trading Cocoa plantation development Maize farming, buying and processing in Chimoio Maize farming and processing

9 | AGRITERRA LIMITED | APRIL 2013

MOZBIFE

• Vertically integrated cattle ranching, feedlot and abattoir operations in

Mozambique

• Expansion into animal feed plant to supply own herd, local demand and export

market

• Current herd exceeding 5,450 head over 21,000 hectares with significant room for

further expansion

• Capitalising on the growing demand for beef in sub-Saharan Africa – Mozambique

currently imports over 90% of its beef

• Well positioned to service high demand international export markets
• Targeting a total herd of 10,000 by 2015

10 | AGRITERRA LIMITED | APRIL 2013

MAVONDE STUD RANCH

• 2,350 hectare Mavonde Stud Ranch stocked with ~1,000 Beefmaster cattle – prized for their

top weight gaining ability and adaptability to hot climates

• Breeding herd has achieved consistent pregnancy rates of over 80%, and the herd is further

supplemented with additional Beefmasters purchased in South Africa

• 48 billion litre dam completed with capacity to irrigate in excess of 4,000 hectares
• With full irrigation, the head to hectare ratio at Mavonde will be able to be increased from

1.5 to 6 head per hectare

11 | AGRITERRA LIMITED | APRIL 2013

DOMBE RANCH

• 15,000 hectare Dombe Ranch located in Central Mozambique
• Investment currently focussed on infrastructure, i.e. construction of paddocks, roads,

fencing, irrigation and staff head-quarters

• Beefmaster breeding herd augmented with native cattle, such as Brahman – cross-breeding

programme also create bloodline with good meat yields and high disease resistance

• Current herd at Dombe of approximately 2,500
• DUAT granted from Mozambican Government extending lease until 2061

12 | AGRITERRA LIMITED | APRIL 2013

VANDUZI FEEDLOT

• 20 pen line feedlot completed with capacity of up to 3,000 head
• Slaughter dress out weights have been between 51% and 56% over three month period
• Sales of 240 per month at an average price of US$1,150 per carcass has been achieved to date
• Includes 1,050 hectares of land for crop plantation to produce feed for the feeding pens
• Synergies with other Agriterra companies – bran by-product from nearby DECA maize processing facility is

in part used as a feed supplement for the feedlot

13 | AGRITERRA LIMITED | APRIL 2013

ABATTOIR & RETAIL UNITS

• 4,000 head per month capacity abattoir commenced operations in December 2012
• Throughput augmented using local steers from the community
• Initial retail unit in Chimoio opened December 2012 and experiencing strong sales of $1,000 to $1,500 per

day and increasing

• Second retail unit in Tete opened February 2013
• Abattoir and retail units enable the group to increase margins achieved on beef operations, maximising

the benefits from a full value chain and complete “field to fork” strategy

14 | AGRITERRA LIMITED | APRIL 2013

FRUIT PLANTATION

• Diversification of product range through acquisition of 2,500 hectare Irmaos Ranch and Balasson

Farm – encompasses a producing banana plantation, macadamia orchard and land capacity for cattle

• 50 acre banana plantation producing initial weekly yields of approximately 7 tonnes – production

anticipated to increase significantly with development of plantation

• Macadamia orchard planted – commercial production targeted within 24 months
• Significant expansion of banana plantations, macadamia orchard, and cattle pasture planned to

maximise revenue generation

• Farm located 25km north of Mavonde Stud Ranch and irrigated by bordering Nyadzonya river

15 | AGRITERRA LIMITED | APRIL 2013

TROPICAL FARMS LIMITED (‘TFL’)

• Capitalising on strengthening global demand for cocoa and security of supply and the

increasing importance of traceability

• Operations to focus on securing cocoa supplies through long term relationships with farmers

and out-grower schemes and development of plantations

• Cocoa production in the region is improving at farm level – with new techniques being

applied and yields and cultivation expected to increase

• Significant opportunity to leverage a first mover advantage, both through its existing base of
• ut growers and through independent plantations

16 | AGRITERRA LIMITED | APRIL 2013

COCOA FARM MANAGEMENT & TRADING

• Established in 2008 to provide a high quality, sustainable and traceable cocoa buying
• peration head quartered in Kenema in the eastern region of Sierra Leone
• 3 main hub stores and 41 satellite stores with a direct buying register of approximately 3,500

farmers across the country

• Developing TFL infrastructure from Freetown to up-country Sierra Leone – 15 acre collateral

management facility in Freetown and 2,000m2 site in Kenema

• First Sierra Leonean member of the Federation of Cocoa Commerce ('FCC'), an international

trade organisation representing all areas of the cocoa supply chain

17 | AGRITERRA LIMITED | APRIL 2013

COCOA PLANTATION DEVELOPMENT

• Accelerated development initiatives underway at 1,200 hectare plantation in south-east

Sierra Leone to facilitate commercial large scale cocoa production

• 200 hectares cleared to date – intention to clear 1,200 hectares by Q4 2013 and complete

planting across entire plantation by Q4 2014

• Expansion strategy in place – acquired additional 400 hectares in March 2013 – scheduled to

begin clearing land in 2014 ahead of planting cocoa in 2015

• Advanced negotiations to acquire additional 1,600 hectares contiguous to the north-

east of current plantation

• Discussions underway to acquire further 1,550 hectares adjacent and south of the

plantation for further ramp up of production in the mid term

• Largest and most technically advanced irrigated cocoa nursery constructed – capable of

supporting up to 500 hectares worth of seedlings

• Potential supplementary cocoa nursery planned – construction to be completed by Q1

2014 enabling the cultivation of up to 1 million seedlings for planting across 1,000 hectares in 2014

• Developed local infrastructure to support plantation growth – improved road to Kenema and

constructed four management houses

18 | AGRITERRA LIMITED | APRIL 2013

TROPICAL FARMS LIMITED (‘TFL’)

19 | AGRITERRA LIMITED | APRIL 2013

MAIZE MILLING & PROCESSING

• Established agricultural farming, buying and processing operation in Chimoio

(Central Mozambique) and Tete (Northern Mozambique)

• Well established and recognised brands with increasing market penetration and

geographic reach – 15% sales to the UN World Food Programme

• Operations support approximately 350,000 local out-growers
• 120 vehicle fleet, all maintenance carried out in-house
• By-product of milling process used as feed for the Group’s cattle ranching
• perations
• Storage capacity of 50,000 tonnes of maize and processing capacity of 40,000

tonnes of maize per annum

20 | AGRITERRA LIMITED | APRIL 2013

INVESTMENT SUMMARY

• AIM listed agricultural company with established cash generative operations
• Multi commodity approach encompassing beef ranching, maize, cocoa, fruit and

animal feed – four current revenue streams

• Positive pricing environment and high margin businesses – strategy to expand
• perations and product range to increase market share
• Well capitalised – additional $17.7 million compensation to be paid within one

year and up to $50 million from Marathon

• Highly experienced board and management team to drive operational and

corporate growth

21 | AGRITERRA LIMITED | APRIL 2013

CONTACTS

Andrew Groves Director +44 (0) 20 7408 9200 Euan Kay Director +258 820 697 840 Susie Geliher St Brides Media & Finance Ltd +44 (0) 20 7236 1177

22 | AGRITERRA LIMITED | APRIL 2013

NEW CALVES AT MAVONDE STUD RANCH

23 | AGRITERRA LIMITED | APRIL 2013

MAVONDE DAM AND RESERVOIR

24 | AGRITERRA LIMITED | APRIL 2013

CROSS-BREEDING PROGRAMME AT DOMBE

25 | AGRITERRA LIMITED | APRIL 2013

VANDUZI FEEDLOT

26 | AGRITERRA LIMITED | APRIL 2013

CHIMOIO ABATTOIR

27 | AGRITERRA LIMITED | APRIL 2013

COCOA DRYING IN SIERRA LEONE

28 | AGRITERRA LIMITED | APRIL 2013

COCOA NURSERY

29 | AGRITERRA LIMITED | APRIL 2013

PLANTATION CLEARING UNDERWAY

30 | AGRITERRA LIMITED | APRIL 2013

D.E.C.A MAIZE PROCESSING