Obtala subsidiary signs deal with European fruit and veg firm

Obtala Resources, a natural resource investment and development company, announced Monday that its agricultural subsidiary, Montara Continental, has entered into an exclusive buy and sell agreement with a European-based vegetable and fruit trading company.

Obtala Resources, a natural resource investment and development company, announced Monday that its agricultural subsidiary, Montara Continental, has entered into an exclusive buy and sell agreement with a European-based vegetable and fruit trading company.

As such, the trading company now has the exclusive rights to sell Obtala's products in the European market, except for the UK.

It will increase its purchased quantity from an initial 1,600 tonnes of mixed sundried tomato products per year to 5,000 tonnes of mixed products per year by the end 2014.

The agreement is for a renewable five-year term with prices up to $5,000 per tonne for certain crop types. The trading company has additional crop requirements which Obtala will work to fulfil, and it will evaluate the merits of establishing in-country processing to provide for increased revenues through product value adding, it said.

Francesco Scolaro, Chairman of Obtala, commented: "The [...] agreement provides a guaranteed market and importantly a significant revenue stream guaranteed over the next five years for our produce. The partnership with the purchaser will allow us to expand our activities and strategically plan our cropping cycles to feed into their expanding demand.

"We will target those crops that allow us to optimise our margins per hectare and will also seek to achieve value added production by establishing an in-country processing facility to tie in with the requirements of our purchasing partner.

"We continue to be extremely optimistic with our development plans to re-position the company as a self-sustainable, profitable, African focused agribusiness and timber trading company with our current land holdings providing the platform for the development of a vertically integrated company. Our group of companies remain debt free and continue moving to cash generating, highly attractive margin producing businesses."

Obtala also said that groundwork has continued on the recently acquired Magole Farm near Morogoro in Tanzania, where a hyrogeology survey has been completed with water well drilling expected to begin after the current rains finish.

A tomato washing and inspection line is being manufactured in South Africa and expected on-site towards the end of May.

The share price rose 6.78% to 7.88p by 08:45 Monday.

NR

Recommended

Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021
Share tips of the week – 17 September
Share tips

Share tips of the week – 17 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Sep 2021
Royal Mail will deliver for investors – here's how to play it
Trading

Royal Mail will deliver for investors – here's how to play it

Royal Mail Group has found its feet in the past 18 months and looks cheap. Matthew Partridge looks at how to trade the shares.
14 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021