Uruguay -- New Zealand Farming Systems Uruguay (NZFSU) reported better half year earnings than expected, due to improved milk production and prices. The company is now forecasting a stronger full year result despite posting a loss of $US6.77m ($NZ8.9m) for the six months to December 31, 2010.
NZFSU hopes to raise capital of $US100-110 million within the next six to 12 months to fund its updated business plan and repay the Olam loan.
NZ Farming Systems Uruguay Limited develops and operates dairy farms in Uruguay. It engages in the sale of milk and beef cattle. The company is based in Christchurch, New Zealand. As of September 24, 2010, NZ Farming Systems Uruguay Limited operates as a subsidiary of Olam International Limited.
Now controlled by Singaporean food giant Olam International, the company which develops and runs dairy farms in Uruguay, needs the capital to complete the development of the farms, buy cows and machinery and complete feed mills and shed feeding systems, it said. Olam said it was not planning major changes to NZFSU’s operations, but did want to reduce the reliance on pasture for feeding stock and implement a more involved approach to managing operations in South America.
Uruguay’s beef and dairy sectors, prized for their export potential, have become hot destinations for foreign investors. Exports of beef from Uruguay have more than quadrupled since 1995. But in the same period, the industry has been taken over by foreign meat packers, and even the country’s cattle ranches are being bought up by foreign investors. Around 60 per cent of Uruguay’s beef exports are controlled by foreign companies, with Brazil’s Marfrig alone controlling nearly 30 per cent.