Dennis Melka, Chairman and Chief Executive Officer, commented: “We are delighted to have been invited by the state authorities to submit these land privatization applications for freehold agricultural land. Our senior management team and legal counsel are well-versed in the land privatization process under Legislative Decree 653 and are confident of a successful outcome in due course.
“We are extremely satisfied with the operating environment in Peru and the results of the first round of federal elections. Given that the Company’s estates are poised to initiate commercial production, it now makes sense to invest the time and effort in this land expansion initiative, which significantly increases the strategic attractiveness of the UCL platform. The ability to acquire agriculturally zoned, freehold land with perfect conditions for the cacao cultivation is truly unique from a global perspective and underscores the unique advantages and high value skill-set that UCL has developed over the years.”
United Cacao Limited SEZC (AIM: CHOC), the AIM-quoted cacao plantation company based in Peru, has told DirectorsTalk that its wholly-owned Peruvian subsidiaries have been invited to submit two land privatization applications totalling 12,097 hectares (29,892 acres) to the State of Loreto’s Department of Agriculture. The privatization applications were submitted under Peru’s Legislative Decree 653 (“LD 653”) which governs the sale of agricultural land to private sector enterprises. One of land applications, comprising 2,132 hectares, is contiguous with the Company’s existing planted area; the other land application, comprising 9,965 hectares, is approximately 50 kilometres south of the Company’s existing estates and is immediately adjacent to the Rio Ucayali thereby simplifying logistics.
Based on the Directors’ prior experience, the land privatization process under LD 653 is expected to take approximately eighteen months and will require a full environmental impact assessment to be undertaken by the Company. In addition, the law requires that thirty per cent. of any agricultural land area ultimately acquired under LD 653 be preserved in perpetuity as a natural reserve. The Company therefore expects the net developable area, if awarded, will be approximately 6,500 hectares based on field analysis and the thirty per cent. reserve requirement. The Company does not expect to incur any meaningful costs until the final award of the land. Similar to the Company’s existing land titles, all land allocated under the LD 653 process is perpetual freehold and agriculturally zoned.
Further updates on the privatisation process will be provided to shareholders in due course.
