United Cacao Limited SEZC (AIM: CHOC), the AIM-quoted cacao plantation company based in Peru, has told DirectorsTalk today that the General Directorate for Agricultural Environmental Affairs (“DGAAA”) – a division of the Peruvian Ministry of Agriculture – has approved the Company’s soil study report that was originally submitted on 30 December 2014. The DGAAA is the relevant regulatory authority for agricultural land titles in Peru.
The approved soil study is the final element for completion of the Company’s environmental certification programme known as the Proyecto de Adecuacion de Manejo Ambiental (“PAMA”) submission. The PAMA is an environmental document issued by the Peruvian Government that certifies and accredits United Cacao’s agricultural practices and activities and confirms that such activities comply with the country’s environmental rules and regulations. The Company submitted the original terms of reference for the PAMA on 9 September 2013; these terms of reference were approved and further clarified by the DGAAA on 9 October 2013 and 6 December 2013, respectively. Furthermore, the Public Participation Plan (“PPP”) of the PAMA was completed and approved on 15 October 2014.
United Cacao now looks forward to the submission and subsequent DGAAA approval of its PAMA. In light of the fact that all requisite information, in particular the soil report and PPP, has now been approved by the DGAAA and that the Company has followed the original approved terms of reference, the Company expects final ratification of its PAMA in 2017.
Anthony Kozuch, Executive Director, commented:
“This is an important milestone for the Company. Approval of the soil study allows the Company to officially submit the PAMA, which is the definitive environmental certification programme requested by the Peruvian authorities.”
Dennis Melka, Group Managing Director, commented: “We are immensely pleased to have secured this critically important approval from the Peruvian authorities in Lima. We wish to thank our shareholders, the local community, and the regional authorities in Loreto and Tamshiyacu whose support has been invaluable in the approval process. We can now move forward with confidence as we create one of the world’s largest cacao estates.”
In addition, the Company is pleased to provide an update to shareholders on the progress of its operations in Peru:
§ The Board of Directors, as part of the recent re-organization, commissioned an agronomist study by CIRAD, a renowned French agricultural institute, to provide an independent review of the field operations and status of the estate. The results of this analysis were completed on 2 December 2016 and confirmed that the estates are: (i) located in an optimal growing environment for cacao; (ii) well-planted with proper supporting infrastructure; and, (iii) overseen by an organised and professional field team on the ground. The report is positive overall on the agricultural prospects of the operation.
§ The Group has planted a total of 1,843 hectares (4,554 acres) to date, of which 1,643 hectares (4,059 acres) is planted corporate estate and 200 hectares (494 acres) relates to the Programa Alianza Producción Estratégica Cacao (“PAPEC”), the Company’s innovative small-farmer programme. The Company is now focused on developing production from the existing planted areas of its estate. Any further expansion of the planted corporate estate and PAPEC is subject to the procurement of additional capital.
§ The Company continues to target a production yield at maturity of between 2.0 and 2.75 tonnes of cacao per hectare, which is broadly in line with similar corporate estates in the Peru. The Company is adopting some advanced planting and grafting practices, which, if successful, might significantly increase the expected yield, however the advanced nature of these practices may lead to both a delay in reaching maturity or a shortfall in yield. Further updates will be provided as the plantation develops.
§ The Company has also planted 400 hectares (988 acres) of high premium, fine flavor Sacha Gold cacao. This variety has not been planted before on such a large corporate scale and as yet there is no certainty that it will achieve the predicted yield. Management continues to monitor the performance of the blend and will provide periodic updates as to progress.
