African agricultural group Agriterra today (13 July) announced plans to acquire Sierra Leone cocoa company Tropical Farms.
Agriterra said the deal will give it a platform to expand into cocoa production through Tropical Farms’ regional expertise and buying operations. The deal represents the first stage in establishing a substantial cocoa business in West Africa, said Agriterra.
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Agriterra is focused on achieving security of supply through forging long-term relationships with farmers and out-grower schemes as well as implementing farm management initiatives and, eventually, developing the company’s own cocoa plantations, the group said.
Agriterra said Tropical Farms’ business model complements its “established and profitable maize buying and processing operations in Mozambique” and is in-line with the its “strategy of building a pan-African agricultural company with other divisions already including maize farming and milling, as well as cattle ranching, feedlot facilities and abattoir services”.
The agricultural group plans to develop additional community buying centres across the district, while also providing additional solar drying and fermentation facilities, in order to increase total buying capacity and guarantee sources of supply.
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It also plans to implement modern farm management techniques and farmer incentive schemes, which Agriterra said have proved “extremely successful” in its maize production and process facilities in Mozambique.
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By GlobalDataAgriterra said the company’s board believes that, with increasing demand and security of supply becoming more important, cocoa represents an exciting opportunity. With cocoa production in Sierra Leone improving at the farm level, it expects new techniques to improve yields and increase cultivation. This, Agiriterra said, provides Tropical Farms with an opportunity to leverage its first mover advantage, both through its existing base of growers and later, through its own plantations.
“Our focus is now to support the development of TFL, replicate its success regionally and leverage this to secure our own plantations,” said Agriterra chairman Phil Edmonds. “By combining our experience and strong understanding of the agricultural sector with Adrian and his team, we will look to build a significant presence in the cocoa industry initially focussing on Sierra Leone and subsequently other countries in the region.”
