The company now embarks on an assessment and planning phase for growing and producing an assortment of cannabidiol (CBD) products
The global medical cannabis industry was estimated to be worth around US$21 billion in 2020, with very high estimated annual growth rates over the next five years as an increasing number of countries approve its use
Amatheon Agri’s subsidiary in Zimbabwe was established in 2014 and seeks a first-mover advantage as the country reengages with the international community and promotes agricultural investment
This extremely high value crop supports Amatheon Agri’s strategic expansion into export markets and diversified offerings to achieve additional contribution margins
Amatheon Agri Holding N.V. (the “Company”), the Euronext listed agribusiness and farming group (ISIN NL0010273694, Symbol MLAAH), today announces that its subsidiary, Amatheon Agri Zimbabwe (PVT) Ltd., has secured a license to produce medical cannabis in Zimbabwe. This is the first and important regulatory step and allows the Company to enter a detailed planning phase whereby it will identify the site, variety and protocols required for production. As a heavily regulated and extremely high value crop, this new product will further diversify Amatheon Agri’s export portfolio and spearhead its entry into the speciality products market.
Medical cannabis boom
The legalisation of medical cannabis continues to gain momentum around the world. North America remains the largest market, with expected progress on legalisation for both medical and recreational purposes likely to drive future growth. US market research company BDSA estimated a global market size of US$ 21.3 billion for 2020, with expected global sales of US$ 55.9 billion in 2026. This would mean a compound annual market growth of more than 17% (CAGR).
Among patients and healthcare professionals, there is an increasing awareness about the benefits of medical cannabis for a variety of ailments. In addition to medical uses, current trends include producing edible products with cannabis, coupled with an increasing amount of it being used as a functional food with purported health benefits as well as usage in the cosmetics industry.
Lucrative future industry
Today’s announcement marks the beginning of the second project phase, the detailed planning phase, which will bring the project to execution. This is expected to take place in the coming months as the Company finalises its plans. The license has been awarded for five years with an option to renew, and the entire project will be subject to strict controls and compliance regulations.
“This approval lays the foundation for Amatheon Agri’s entry into a highly lucrative future industry,” says Founder and CEO of Amatheon Agri Holding N.V., Mr. Carl Heinrich Bruhn. “With the license in hand, we can now start planning a scalable project that will significantly support our business growth in this specialised market,” says Bruhn.
Zimbabwean opportunity unparalleled
Amatheon Agri established its subsidiary in Zimbabwe in 2014 and has engaged various Joint Ventures in the country since. “Despite its economic challenges, we are strong believers in Zimbabwe’s future and it remains a priority in our strategic outlook,” says Bruhn. “Its variety of landscapes, ideal climatic conditions, abundant water supply, long hours of sunlight and talented labor market makes the country well poised for our new investment,” he says. During Mr. Bruhn’s recent visit to Zimbabwe, he met with Honourable Vice President and Minister of Health, Dr. Constantino Chiwenga, who highlighted his appreciation of Amatheon Agri’s new investment initiative in the country.
Spices: Growth drivers with high contribution margins
Amatheon Agri’s priority remains expanding its business with products that generate a high contribution margin, primarily in the export market. In line with this strategy, the Company is now focusing on the large-scale cultivation of spices, in particular Birds Eye Chillies and Cayenne Peppers. The cultivation of these products has already begun, with trials for coriander, garlic, ginger, turmeric and cumin simultaneously in progress. This is alongside the Company’s established export portfolio of superfoods including quinoa, chia and moringa.
The core concept of combining direct commercial farming with production by neighboring smallholder farmers (outgrowers) remains central to Amatheon Agri’s growth strategy. As recently announced, the Company grows chillies on its own farms and also provides seeds to a network of around 4,000 small-scale farmers. Amatheon guarantees offtake through a contract farming agreement, whereby the farmers receive a fixed buying price pegged to the US Dollar and then markets the products regionally and internationally. This approach provides equal planning security for the farmer and the Company.
About Amatheon Agri Holding N.V.:
Amatheon Agri is a European agri-food company with headquarters in Berlin, production sites in Sub-Saharan Africa and cooperations with small-scale local farmers (outgrowers). Since its foundation by Mr. Carl Heinrich Bruhn in 2011, Amatheon Agri has established sustainable agricultural value chains from cultivation to product-specific processing and trading processes in Zambia, Uganda and Zimbabwe. With a combination of international distribution network, incorporated local know-how as well as a sustainable vision for the future, Amatheon Agri has been able to establish itself as a strategically aligned global player in the African agricultural sector.
In 2020, Amatheon Agri also launched its new brand for 100% natural, fair and sustainably grown food from Zambia, Uganda and Zimbabwe: ZUVA Foods (zuva.de)
The Shares of Amatheon Agri are listed on the Euronext Paris stock exchange (ISIN NL0010273694, Symbol MLAAH) and on the Lang & Schwarz Exchange in Germany (Symbol/WKN A1J4XD).
The Convertible Bonds of Amatheon Agri are listed on the Frankfurt Stock Exchange with ISIN DE000A286BY3 and Symbol/WKN A286BY
SOURCE: Amatheon Agri Holding N.V.Post published in: Featured