14th Jan 2009 14:05
14th January 2009
LONRHO PLC
("Lonrho" or the "Company")
"Lonrho appointed John Deere distributor for Angola"
Lonrho Plc (AIM: LONR), the conglomerate with a structured portfolio of African investments, is pleased to announce that it's wholly owned agricultural subsidiary, Lonrho Agriculture, has signed an agreement to become the John Deere tractor and agricultural equipment distributor for Angola.
A new Angolan company, LonAgro Equipamentos Agricolas Lda (LonAgro) has been established and will be owned as to 51% Lonrho Agriculture and 49% as to Agromundo Assessoria Agricola Lda, a well established company in the Angolan agricultural sector (that represents international companies such as Omnia from South Africa; BASF Agrochemicals from Germany and Bauer Irrigation from Austria) a well established company in the Angola agricultural sector.
John Deere is the world's leading supplier of agricultural equipment with an annual turnover of over US$ 2 billion and is renowned for its dealer network and the support, back up and training that this brings.
LonAgro has purchased a 20,000m2 site to be the initial John Deere branch in Catete, in the Bengo Province, 80km east of Luanda and plans to have this head office branch open and stocked by July 2009. At least two further branches are planned to be developed throughout the country in 2010 and 2011. Each branch will have full showroom, sales, administration, training and servicing facilities.
The Angolan Government has announced that the development of agricultural projects is a national priority and GESTERRA (Gestao de Terras Aravais), a parastatal Government Agricultural Promotion agency and the Ministry of Agriculture, through the Instituto de Desenvolvimento Agricola (IDA) are implementing a series of investment packages to encourage and support Angolan agriculture.
The budgeted investment to establish and roll out the John Deere dealership in Angola is US$ 6 million, which will be funded by way of local Angolan bank debt and equity. Lonrho will fund up to US$ 1.5 million of the equity from its existing cash resources which had been allocated as previously announced to agricultural projects.
David Lenigas, Lonrho's Executive Chairman commented:
"Angola is a thriving economy in Africa and the quantity of large scale private sector investment into the agricultural sector and the biofuels sector, combined with the Governments clear mandate to develop the agricultural economy, provides strong commercial potential for LonAgro.
"John Deere is not only the leading world supplier of agricultural equipment, but importantly, is as focused as Lonrho on ensuring that the business we build provides the correct levels of technical support, training and spares availability to ensure that John Deere develops into the strongest partner in the agricultural sector in Angola."
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