TIDMOBT
RNS Number : 7487E
Obtala Resources Limited
06 November 2015
06 November 2015
Obtala Resources Limited
("Obtala", the "Group" or the "Company")
(AIM: OBT)
Agriculture Update
Obtala Resources Limited (AIM:OBT), the vertically integrated
agribusiness, timber and retail company, is pleased to provide the
following update with respect to its agriculture assets.
Highlights:
-- "AA" grade certification awarded for BRC Global Standard for
Food Safety for Morogoro farm in its entirety, for dried fruits and
vegetables.
-- Memorandum of Understanding signed with international fruit
trading company, a division of Groupo Cabal, the former owners of
Del Monte Fresh.
-- 500 tonne of cantaloupe melons under 'plant to order'
programme placed for dispatch in Q1 2016.
-- Plan to establish significant banana plantation in Tanzania
of 150 hectares under 'plant to order' programme for H2 2016 to
fulfil Middle Eastern market.
-- Strong interest in Middle East for fresh vegetables following Dubai exhibition.
-- Mama Jo's repackaging for introduction to airlines inflight catering.
BRC Global Standard
The Company is pleased to announce that it has been awarded the
BRC Global Standard for Food Safety with an "AA" certification
grade. The Company has invested a substantial amount of time and
resources at the Morogoro farm in order to achieve the globally
significant BRC standard. In the last 12 months, Obtala has
undertaken additional capital expenditure on the processing unit,
infrastructure upgrades, extensive staff training and project
management in order to receive this standard. The receipt of this
standard (after the award of Global GAAP certification in July), is
the final industry certification required to allows Obtala to
market its produce to a wide range of potential customers for whom
BRC compliance is required. Therefore, Obtala looks forward to
delivering enhanced orders and sales from its agri-business in the
near future given the platform we now have to conduct sales
globally.
The Company is currently in advanced discussions with our UK
based food consultants with regard to re-packaging the Mama Jo's
range of dried fruits in smaller 40g bags that will be suitable for
airlines and fast food/convenience outlets. We continue to grow,
dry and package our range of tomato, chilli and peppers in bulk
size, and it is anticipated that orders for these products will
escalate now that we have the BRC global standard.
Strategic Relationship with Fruit Trader
The Company has signed a Memorandum of Understanding ("MoU")
with a highly experienced international exotic fruit trading
company (the "Trader"). Under the terms of the MoU, Obtala will
work in partnership with the Trader to establish a marketing and
sales entity based on a revenue split basis, ensuring the best
returns for the Company.
The Trader is part of the agricultural division of Grupo Cabal,
a Mexican group with long standing tradition in the sector as
former owners of DEL MONTE FRESH and today one of Mexico's largest
producers and exporters of tropical fruits. The Trader deals in
agricultural commodities from the Americas to the European and
Middle Eastern market and will be able to provide its expertise to
Obtala for its fresh produce division.
Through the partnership we will have direct involvement in all
of the stages of the supply chain, going from production to
logistics and distribution channels, ensuring that we
systematically deliver to our clients to the highest quality
standards in the industry. The Traders' network spans the highest
quality producing countries for each of the products in their
portfolio where expertise has been harvested for many decades, all
the way through to the main consumer markets in the Americas, the
European Union and Middle East.
As part of the partnership with the Trader, Obtala will
initially supply 20 containers, c.500 tonne, of cantaloupe melon.
This variety of melon takes 3-4 months from planting to harvesting,
yielding +20 tonnes per hectare. In addition the Trader is highly
experienced in banana farming and together we plan to establish a
150 hectare banana plantation on the farm. Typically bananas take
between 9-12 months from planting to harvest with 1,800 banana
trees per hectare yielding +40 tonnes per hectare, achieving $1,000
per tonne, with costs of $5,000 per hectare.
General Update and Lesotho
Company representatives recently attended a major fresh
vegetable exhibition in Dubai which has resulted in strong demand
and interest from eight Middle East based trading companies. The
Company is currently finalising packaging requirements for the end
users and is in discussions with Emirates Airlines about acting as
our carrier of choice for the products.
In light of the BRC certification and the increased interest
being generated for both dried and fresh produce from the Morogoro
farm in Tanzania, the Board has taken the decision to withdraw from
its joint venture on a cannery operation in Lesotho. The Company
believes it is better served concentrating and focusing its effort
and its resources and time on developing the Morogoro farm
operation.
Simon Rollason, Managing Director of Obtala, commented, "The BRC
certification is the result of much hard work on the ground,
significant investment and good working relations with our local
workforce and is an important milestone achievement for the farming
operation. The future partnership with a division of a major
international fruit trading company and the benefit of the
downstream revenue share is an exciting development. The expertise
that they will bring in terms of marketing and distribution,
together with hands on farming expertise can only be beneficial to
the Company. Our intention is to increase the area under
cultivation and to turn the farm into a major operation in the
region with a range of product lines exporting globally."
Obtala Resources
Kevin Milne - Executive Deputy
Chairman
Simon Rollason - Managing Director +44 (0)20 7099
www.obtalaresources.com 1940
ZAI Corporate Finance Limited
(Nomad)
Ray Zimmerman +44 (0)20 7060
Richard Morrison 2220
Brandon Hill Capital (Broker) +44 (0)20 3463
Jonathan Evans 5000
Square 1 Consulting (Public
Relations)
David Bick +44 (0)20 7929
Mark Longson 5599
Additional information
BRC Global Standards
BRC Global Standards is a leading safety and quality
certification programme, used by over 23,000 certificated suppliers
in 123 countries, with certification issued through a worldwide
network of accredited certification bodies.
The Standards guarantee the standardisation of quality, safety
and operational criteria and ensure that manufacturers fulfil their
legal obligations and provide protection for the end consumer. BRC
Global Standards are now often a fundamental requirement of leading
retailers.
The BRC Global Standard for Food Safety Issue 7 was published in
January 2015, setting the latest benchmarks for best practice in
food manufacture. Issue 7 has been developed to specify the food
safety, quality and operational criteria required to be in place
within a food manufacturing organisation to fulfil obligations with
regard to legal compliance and protection of the consumer. The
format and content of the Standard is designed to allow an
assessment of a company's premises, operational systems and
procedures by a competent third party, the certification body,
against the requirements of the Standard.
The BRC Global Standard focuses on:
-- ensuring consistency of the audit process
-- providing a Standard that is flexible enough to allow extra
voluntary modules to reduce the audit burden
-- encouraging systems to reduce exposure to fraud
-- promoting greater transparency and traceability in the supply chain
-- encouraging adoption of the Standard in small sites and
facilities where processes are still in development
This information is provided by RNS
The company news service from the London Stock Exchange
END
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