Brazil farmer turns tables by seeking land abroad
2012-02-13 12:19:09
SLC Agricola turned the tables on the wave of foreign interest in Brazilian farmland by seeking farms outside the South American country – probably in Africa - in a drive to expand its empire to an area bigger than Brunei.
The farm operator, based in the southern Brazilian state of Rio Grande do Sul, unveiled an "internationalisation plan" which will see it acquire, and plant, foreign farmland by 2015-16.
"The initial focus will be the African continent," SLC Agricola said, adding that it was to study Mozambique "in depth".
The foreign quest will supercharge a drive to increase its farmland by 2020-21 to 700,000 planted acres, of which 20% will be abroad, implying 140,000 hectares in foreign acquisitions.
SLC's current landbank spans 300,000 hectares, including conservation areas, all in Brazil.
Investment wave
The move contrasts with a scramble for South American land by many foreign investors, particularly in countries such as China and Saudi Arabia which are large food importers.
Recent deals include December's $83m purchase by Saudi Arabian dairy giant Almarai of Foodomonte, which owns and operates three farms in Argentina.
Both Argentina and Brazil, South America's top two farming nations, have drawn up restrictions on foreign ownership of land, although such reforms have provoked controversy.
Brazil is still, 18 months after issuing interim restrictions, in reaction to talk of Chinese plans for large-scale land purchases, to unveil definitive rules.
New frontier
However, the growing expense of South American farms is prompting many Brazilians to join the throng of investors seeking foreign plots, relying on agricultural expertise, as well as money, for success in what can be a politically-charged process to win deals.
Mozambique, in which London-listed Agriterra has cattle farming and corn procession operations , has appeared particularly welcoming to Brazilian farmers, with Mozambican farm minister Josй Pacheco raising the topic on a visit to the South American country last year.
Pinesso Group, based in the major Brazilian agricultural state of Mato Grosso, has unveiled plans to expand its African operations, centred in Sudan, into Mozambique.
In September, farmland investment company Agrifirma Brazil - whose backers include Lord Rothschild, which is advised by commodities investor Jim Rogers– revealed it was to place most of its Brazilian farm operations into a joint venture and seek "attractive opportunities elsewhere in the world".
Cane plans
SLC Agricola also revealed it was to expand its range of farmed crops in 2012-13, with sugar cane likely to win inclusion in its sowing plans.
Separately, rival farm operator BrasilAgro, which already has substantial cane operations, besides corn, cotton, pasture and soybeans, unveiled a slide of 39% to R$6.19m in earnings for the October-to-December period.
Revenues showed a small rise, of 0.9% to R$30.5m, as 91% surge in grain taking was offset by smaller cane sales, lowered by a farm sale.
However, administrative expenses soared 70%, lifted in part by a growing wages bill.