Proactive Investors | 25 November 2015
Obtala Resources (LON:OBT) has signed outline terms of a deal that will see it significantly increase its farming footprint in Tanzania.
The formalities of a joint-venture will be concluded “shortly” that will give the AIM-listed agri-specialist access to 1,265 hectares that sits between the Wami River and the main Dodoma to Dar es Salaam highway.
The area is just 220km from the sea port and airport at Dar es Salaam, Tanzania’s largest city, making logistics reasonably easy.
With 250 hectares already cleared, the plan initially is to plant bananas, which are reasonably quick-to-market fruit.
Obtala will have 70% of the JV, with the unnamed partner holding the remainder.
The deal also provides a platform for its first collaboration with a Mexican fruit trading group that used to own of Del Monte Fresh.
In fact the trader will pay for the seeds for the initial banana crop at a cost of to $110,000 per 100 hectares.
It will also provide plantation experts from its Central American operations to assist the project start up and training.
The plan in Tanzania to begin with a 150 hectare, scaling up to 500.
Typically bananas take between 9-12 months from planting to harvest.