Field Notes: CAP takes stake in Mozambique Fibra; Tattarang nears AACo takeover threshold; EIB backs Bulgarian sunflower oil plant

In our first issue of the year, CAP takes a stake in Mozambique Fibra; Tattarang nears AACo takeover threshold with a 19.49% stake; EIB backs Bulgarian sunflower oil plant; and people moves. Welcome to Field Notes, the start-of-the-week briefing for our valued subscribers only.

First look

Timber export facility

CAP eyes African forestry product exports

Criterion African Partners has completed a $10.5 million investment into Mozambique Fibra, a subsidiary of South Africa-headquartered Mozambique Tree Farming.

MozFibra plans to construct a wood chip export facility on land it already owns adjacent to the nearby port of Beira.

“A problem with a lot of the forestry companies in Africa is that they’ve started with the trees, then [they’ve thought about] what to do with them,” CAP managing director Jim Heyes told Agri Investor.

“These guys really started with the market thesis and acquired the land and the port to be able to access the global wood chip market. It’s a really well thought-through and sequenced overall strategy. Other companies have made that mistake, have planted the trees – including for global pulp markets – and not secured the logistics and now are suffering.”

MozFibra has planted 7,000ha of forestry over the last 10 years at a low per hectare price and plans to develop eucalyptus plantations in the Sofala and Manica provinces of central Mozambique, which will be managed by its Investimento Florestal Mozambique unit.

Heyes added that growing wood fiber for wood chips benefits from a shorter rotation to positive cashflow than some other wood products and benefits from being a dollar market, “so you get away a little bit from some of the foreign exchange currency risks that many of our investments have faced,” he said.

In February 2023, CAP entered a partnership with California-headquartered Mission Produce, which is a listed provider of avocados and mangos to customers in more than 25 countries. ZZ2 Boerdery, a family-owned South African farming company with more than 250ha of planted avocados, was the third party in the partnership.

CAP managing director George McPherson said the partnership was inspired by a desire to use suitable land acquired as part of its forestry investments for higher and better use.

“In an African context, it’s not necessarily going to be real estate, but it’s going to be asking ourselves the question of what can we actually do with this land that improves the value above and beyond what we can get out of it if we just stuck with the forestry side of the business,” said McPherson.

Read the full story here.

They said it

“There’s been a true broadening to investors appreciating and understanding the intrinsic value that working forests provide around climate benefits”

FIA managing director and head of business development and sustainability MaryKate Bullen says industrial pine plantations were not previously a focus from the carbon markets perspective

Deals 

Tattarang nears takeover threshold with 19.49% stake in AACo

The family office of Australian mining magnate Andrew Forrest has increased its share in the ASX-listed Australian Agricultural Company, inching closer to the 20 percent threshold for a takeover bid.

Just before the new year, Perth-based Tattarang increased its stake in AACo from 18.48 percent to 19.49 percent, purchasing 6,103,601 shares for A$9,813,271 ($6,558,257; €6,014,132), or about A$1.61 per share.

While Tattarang remains tight-lipped on its plans, the increased shareholding reflects its focus on Australian agriculture.

AACo is currently majority owned by British billionaire Joe Lewis, with a 52.09 percent stake through Tavistock Group and AA Trust.

However, if Tattarang grows its share to more than 20 percent, it must initiate a takeover bid to acquire the remaining shares.

If this takeover proves successful, it has the potential to transform the publicly listed AACo into a private entity.

Read the full story here.

FIA and Weyerhaeuser swap $330m worth of forestry assets

Forest Investment Associates completed two transactions through which the firm acquired and sold timberland properties in Carolina and Mississippi to New York Stock Exchange-listed Weyerhaeuser.

Seattle-headquartered Weyerhaeuser said in a statement it had sold 69,600 acres in upstate South Carolina to FIA for $170 million and acquired 60,700 acres of timberland in North Carolina, South Carolina and Mississippi for $163 million.

Weyerhaeuser president and chief executive Devin Stockfish said the assets acquired were well-integrated with existing properties and the deal’s like-kind structuring was tax efficient and reduced transactions costs.

FIA president and chief executive Mike Cerchiaro said the increase in the number of interested parties active in timberland markets with a focus on climate mitigation efforts has translated into increased transaction activity outside of regions with well-developed forest product infrastructure, such as the US South and Pacific Northwest.

“You’re not always able to see with full clarity exactly what premium, if any, is being paid on those assets, but we are seeing a more depth of demand for lower-quality assets, presumably for some of these other aspects of value,” Cerchiaro told Agri Investor.

Despite this, Cerchiaro said 2023 deal volumes have remained largely unchanged, with between $2 billion and $2.5 billion of property changing hands in the US and about $1.5 billion to $2 billion worth of deals internationally.

Read the full story here.

Loans

EIB backs Bulgarian sunflower oil plant

The European Investment Bank has extended a €35 million loan to Kristera AD, part of Agria Group Holding, to co-finance the construction of a new sunflower oil processing plant in northern Bulgaria.

The deal is backed by the InvestEU programme, which aims to trigger more than €372 billion in additional investment between 2021 and 2027. Part of the loan will also be used to acquire railcars for the transportation of edible oils.

Agria Group is one of Bulgaria’s largest grain producers and traders.

The €75 million project is expected to improve the company’s access to export markets, optimise its production of sunflower seeds, create jobs and promote sustainability and resilience in rural areas.

The processing plant has a target operational date of H2 2027, with the purchase of railcars intended to improve efficiency and cut greenhouse gas emissions from road freight transport.

“This project is of utmost importance for the group as it creates an opportunity to significantly diversify the trade turnover, reduce trade dependencies and enter new end markets and destinations,” said Agria Group Holding chief executive Emil Raykov.

“Additionally, this project has great regional and economic importance, as it will create a significant number of new jobs, improve and optimise the logistics of raw materials by replacing them with manufactured end products, and lead to substantial economies of scale from a financial and operational management point of view.”

People

Peoples Company ends expansion with Goldcrest and Fall Line hires

Peoples Company has hired executives from Fall Line Capital and Goldcrest Farm Trust Advisors to help expand its farmland brokerage and management business in the Southeast and Southern Plains regions.

Clive, Iowa-headquartered Peoples Company appointed both new hires as land managers. Thiago Lima joins after eight years with Fall Line in a role that will see him oversee farm management in Florida, Georgia and Alabama. Tommy Funk’s role will focus on land management and acquisition in Texas and Oklahoma. Funk has spent the last nine years as a partner and president of Goldcrest Farm and Trust Advisors.

The appointments mark the continuation of a hiring spree that has included the addition of former AcreTrader executive Jonathan Shively and former International Farming Corporation and Nuveen executive Doug Hodge. Peoples Company president Steve Bruere said the additions of Lima and Funk completes the company’s expansion into each major US agricultural region.

Indigo legal exec departs for Boston firm

Indigo Agriculture executive vice-president, general counsel and secretary Paul Dacier has left the Flagship Pioneering-backed company and joined law firm Quinn Emanuel Urquhart & Sullivan.

The Boston-headquartered firm said it hired Dacier as partner in a statement that highlighted his experience dealing with legal issues around complex technology.

According to his LinkedIn profile, Dacier joined Indigo in 2017 and also serves as chairman of the board for AerCap, a commercial aircraft leasing company listed on the New York Stock Exchange.

VC fundraising

Fasal, an Indian crop yield and operational costs management start-up, raised a $12 million Series A round co-led by British International Investments and TDK Ventures, with participation from ITI Growth Opportunities Fund, Navam Capital and Aureolis Ventures, among others.

Standard Biocarbon, a US-based carbon removal start-up, secured a $5 million investment from Nexus Development Capital, a provider of capital to sustainable infrastructure projects.

Agtonomy, a San Francisco-based agriculture software start-up, raised $22.5 million in a Series A funding round led by Momenta, with participation from Doosan Bobcat North America and Toyota Ventures.

Also in the news…

Australian grape growers fear export hit from port dispute

Australian table grape growers are concerned that long-running industrial action at the country’s ports could delay thousands of tons of produce bound for Asia (AFR).

AUA Private Equity snaps up Weaver Popcorn Manufacturing

Grant Thornton and Boston Consulting Group served as commercial and financial advisers to AUA on the deal (PE Hub).

How America’s diet is feeding the groundwater crisis

As dinner tables and snack menus feature far more chicken and cheese, farms are expanding where water is scarce (NY Times).

Louisiana Teachers to commit up to $400m to VC in 2024

TRSL has committed $50m to Insight Partners XIII and plans to invest as much as $350 more in four more VC funds in 2024 (VCJ).

New Forests holds A$450m first close on ANZ Landscapes and Forestry Fund

New Forests secures A$75m commitment from the CEFC for ANZLAFF, alongside investment from AP2, BVK and others (Agri Investor).


Today’s letter was prepared by Binyamin Ali, Chris JaniecDaniel Kemp  and Tom Taylor.