Tim Miles says South America is making an increasing contribution to the group. Photo / Simon Baker
Rural services company PGG Wrightson is continuing to expand in South America.
The NZX-listed company has bought a 51 per cent stake in Romualdo Rodriguez - a Uruguay-based livestock, wool and rural real estate business.
PGG Wrightson managing director Tim Miles said the acquisition further strengthened the company's
strategic position in South America.
The controlling stake in Romualdo Rodriguez added to the firm's successful seeds businesses, which included Alfalfares in Argentina, and the management business servicing farms owned by NZ Farming Systems Uruguay.
"South America is making an increasing contribution to PGG Wrightson Group's financial performance and is a significant employer with 400 staff now working directly and indirectly for the company in the region," Miles said.
Romualdo Rodriguez had a 43-year history of farm services in Uruguay and had established a position of leadership, PGG Wrightson said.
The livestock business returned annual sales of about US$30 million ($39.84 million).
Barry Brook, group general manager South America, said: "Romualdo Rodriguez is a long-standing successful operator in Uruguay with a nationwide presence and breadth of operations in livestock, wool and real estate including procurement for meat-processing companies and internet-based livestock auctions."
NZ Farming Systems Uruguay was floated on the NZX in December, having been set up by PGG Wrightson to develop dairy-farm operations in Uruguay.
PGG Wrightson holds the fund and farm manager contracts for NZ Farming Systems - which owns 36,300ha of farmland bought for an average price of US$2601 a hectare.
Comparable land in New Zealand could cost between US$45,000 and US$50,000 a hectare. NZ Farming Systems completed a $110 million capital-raising exercise in December by issuing shares at $1.50 each - shares closed down 5c yesterday at $1.84.
PGG Wrightson was entitled to a management fee equivalent to 1.5 per cent of the gross asset value each year, reducing to 1 per cent after June 30.
The company's shares have risen sharply during the past month from about $2.05, closing down 6c yesterday at $2.69.
ROMUALDO RODRIGUEZ
* Uruguay-based livestock, wool and rural real estate business.
* Listed rural services company PGG Wrightson has bought a 51 per cent stake.
* South America is making an increasing contribution to group performance.
* 400 staff now work directly and indirectly in the region.
