Obtala’s agriculture subsidiary Montara Continental has signed the deal with an unnamed European vegetable and fruit trading company, it said. The company’s customer base is said to be made up of food manufacturing companies across the continent.
The purchaser has the exclusive rights to sell Obtala’s products in Europe except the UK. It will buy 1,600 tonnes of mixed sun-dried tomato products a year initially, rising to 5,000 tonnes of mixed products per year by the end of 2014.
The five-year deal, which may be renewed, will earn Obtala up to US$5,000 per tonne for certain types of crop.
Francesco Scolaro, Obtala’s chairman, said: “I am delighted to announce this agreement, which is a highly significant milestone in our project development plans, to our shareholders.
“The off-take agreement provides a guaranteed market and importantly a significant revenue stream guaranteed over the next five years for our produce.
“The partnership with the purchaser will allow us to expand our activities and strategically plan our cropping cycles to feed into their expanding demand.”
Obtala added that groundwork continues on the recently acquired Magole farm in Tanzania, where a hydrogeology has been completed, with water well drilling expected to begin after the current rains end.
The company’s focus is high yielding crops, including tomatoes, chillies and ground nuts, which can be cultivated using the best farming methods to generate year-round revenues.
It is in the process of raising funds for its development plans in East Africa. So far, it has raised £945,000 through two share issues, with one more instalment to come.