October 5, 2012

In order to finance its agricultural activities in Mozambique and Sierra Leone, the trading company Agriterra has announced on Wednesday (Oct 3) that it is selling its 20% stake in an oil block in Ethiopia.

The company is to sell its stake in the South Omo block to the Ethiopian subsidiary of the oil giant Marathon for US$50 million. The sale is dependent on a go ahead from the Ethiopian Ministry of Mines and two other oil companies: Tullow Oil and Africa Oil.

Agriterra was previously named White Nile Limited which specialised in oil exploration. However, in 2008 it decided to move into agricultural production.

Since then it has been successfully developing a beef ranching business, Mozbife, and a stud farm, both in the central Mozambican province of Manica.

Agriterra is also been expanding its local corn farming and milling operations. It owns DECA (Agricultural Development and Marketing Ltd), based in Chimoio, capital of Manica province, which buys corn from thousands of local farmers. It processes and mills the grain to produce corn meal (corn flour). Its other company, Compagri Limitada, copies the DECA model in the western city of Tete. It has also has an abattoir in Chimoio and butchers shops in Chimoio and Tete.

Speaking about the deal with Marathon, Agriterra Chief Executive Officer Andrew Groves said, "The funds from this sale will enable us to realise our rapid expansion plans across all our agricultural businesses, effectively enabling the company to become a significant pan-African food producer and processor".

He continued, "In Mozambique our ambitious growth objectives include expanding our current beef herd from 4,000 to 10,000 head by 2015, and building a vertically integrated beef operation through the continued development of a feedlot operation, 4,000 head per month capacity abattoir and butcher shops".