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January 27, 2009

Conglomerate with African roots to develop 25,000 hectares in Angola

Africa-focused investment company Lonrho’s agricultural subsidiary, Lonrho Agriculture, has said that it signed a development agreement with the Angolan government to develop 25 000 ha of agricultural projects in Angola.

The company said that this was in line with its strategy of vertically integrating operations, as it aimed at becoming a significant producer, processor and deliverer of agricultural products from the African continent to key African, European and Middle Eastern markets. Lonrho would develop 25 000 ha of agricultural projects in the provinces of Uige, Zaire and Bengo.

The projects would be in cooperation with the government, and work with the government’s initiatives to promote agricultural reconstruction and development. The Angolan government is seeking to restore the country’s agriculture production, which had fallen sharply after a lack of investment and a 27-year civil war.

"Lonrho sees the potential for growth in the agricultural sector in Africa as a significant and real opportunity. It is the vertical integration of the African agricultural industry that is the key to success. It is the ability to not only grow produce, but to deliver it to a global market that will meet the growing shortages of food production," said Lonrho executive chairperson David Lenigas.

Lonrho Agriculture was also currently undertaking feasibility studies in cooperation with the governments of Malawi and Mali for 25 000 ha of agricultural land on the banks of Lake Malawi and for a five-year potential development of up to 100 000 ha in the Niger delta in Mali.

Lonrho Agriculture said that it remained focused on developing international standard agri processing, storage and handling facilities meeting European import requirements and developing and operating the necessary chilled logistics networks to ensure that fresh produce from Africa can reach markets in Europe and elsewhere in prime condition.

Lonrho Agriculture’s existing Rollex operation, located airside at the OR Tambo International Airport, in Johannesburg, has expanded its processing and packing operations from 3 500 m2 to 4 908 m2 to meet expected demand. Lonrho added that this perishable handling facility’s revenues in the 12 months ended December 2008, had increased by 25% over the corresponding period.

The company is a supplier to the South African market, as well as for major retailers in Europe, including Marks & Spencer and Tesco. The previously announced 1 810m2 fruit salad processing line at the Johannesburg facility was delivering processed fruit salad in South Africa, and opening export markets in Europe. The fruit salad facility was forecast to add turnover of $20-million to the Rollex operations in 2009, said the company.

Lonrho also said that its 480 m2 cold store and export processing facility in Windhoek, Namibia, had surpassed expectations. The facility now exported 15 t of fresh fish from Windhoek to Frankfurt and Gatwick on a daily basis. The company’s agricultural engineering consultants MBB completed site surveys for the new cold store and agri-processing facility that it was developing at Lilongwe, Malawi, to start delivering produce from Malawi to service the Middle East market. “Further agri processing facilities are under negotiation and planned to be developed in Harare in Zimbabwe, the Niger delta in Mali, and Luanda in Angola,” concluded Lonrho.

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