A New Zealand dairy farming venture in Uruguay has sold off an area of its extensive land holdings to raise capital for further development and repay debt.
NZ Farming Systems Uruguay made $US8.5 million from the sale of 2500 hectares from its Tobay farm in the east of the country.
It will use the proceeds to pay management fees owed to PGG Wrightson and to help with further development of its Uruguan dairy farms.
Chairman John Parker says the sale price is more than it paid for the land.
He says the company expects to sell other, undeveloped parcels of land that are not as suitable for dairying. The latest land sale still leaves the company with more than 30,000 hectares of farm-land in Uruguay, with about 13,000 hectares in dairy production.
It is forecasting another loss of $NZ7 million to $NZ10 million this year, after a challenging first three years of existence, battling drought as well as the impact of the dairy downturn and global recession.
Mr Parker says he is confident the venture will prove to be a good long-term investment, even though it is taking longer than expected to reach profitability.
He says after a challenging first three years of existence, battling drought as well as the impact of the dairy downturn and global recession, it is aiming to be in profit for the first time next year.
New Zealand Farming Systems Uruguay now has more than 30 dairy sheds in operation, milking about 24,000 cows.
Its farms are carrying about 55,000 head of cattle, including calves and replacement stock.
