Biggest South America Corporate Farm Groups
With agricultural commodity prices at multi-year highs, buying farmland is seen as a more direct way to cash in on valuable crops and to take advantage of long-term appreciation of farm property. As a result, investors from around the world are pouring a lot of funds into agriculture this year to boost yields across the top producer nations as record high food prices jolt markets and send buyers scurrying for supplies.
South America is today worldwide considered a top place to buy, lease and manage agricultural lands for profit. With the surge of corporate farms in Argentina and Brazil over the past two to three years, DTN put together a list of the biggest groups with a short description of each.
1.) El Tejar
The world’s largest farm company with around 2.75 million acres of soybeans, corn and cotton mainly in Argentina, Brazil and Uruguay. The company owns just 20 percent of its farmland, renting the rest, and outsources all machinery and farm labor. Backed by London-based hedge fund, Altima Partners, with a 40 percent stake, and private equity firm, Capital Group, with 13 percent.
2.) Los Grobo
Uses a similar model to El Tejar, but on a slightly smaller scale. Farms around 750,000 acres mostly in Brazil and Argentina. In Brazil it has formed a partnership with local bank Pactual to finance its expansion. Los Grobo took a controlling share of Brazilian grain company Ceagro earlier this year and also bought seed company Selecta at the end of 2008.
Cresud is the only farm company listed on the Buenos Aires stock exchange and is also listed on Nasdaq. Cresud controls around 1.6 million acres of land, mostly owned. However, only 150,000 acres are in crops, 575,000 acres are in pasture and the remainder is undeveloped. The company’s objective is to acquire and develop farmland for future sale. Cresud has a 35 percent stake in Brasilagro, a farmland investment company listed on the Brazilian stock market.
Family-owned Argentine farm company which also has operations in Uruguay, Paraguay and Brazil. Was farming 250,000 acres back in 2007, but may have nearly double that by now following rapid expansion especially in Brazil. Has a similar model to El Tejar and Los Grobo in that most of its land is leased.
Adecoagro, which has billionaire investor George Soros among its main shareholders, was created in 2002 in Argentina and started operating in Brazil in 2004. The company owns most of the land it farms, totaling around 670,000 acres in Argentina, Brazil and Uruguay. It produces grains, rice, oilseeds, dairy products, sugar, ethanol, coffee, cotton and beef.
6.) Calyx Agro
Calyx Agro, formed in 2008, is focused on the acquisition, development, rental and operation of agricultural land located in South America with an emphasis on Brazil. Calyx Agro was formed by LD Commodities, and an investor group led by AIG Investments as well as a number of other private equity- and family-sponsored investment funds. The company has acquired over 100,000 acres in Brazil, Argentina, Paraguay and Uruguay.
Agrifirma is a modern farmland operating and development company co-founded by Ian Watson and Jim Slater in 2008, following their success with Galahad Gold. Investors include Lord Rothchild, and commodities guru Jim Rogers. The company has acquired around 175,000 acres, all in western Bahia.
Founded in 1977 in the south of Brazil. The first Brazilian farm company to list on the local stock exchange (2007). Owns and farms around 575,000 acres, all in Brazil. Grows mostly soybeans, cotton and corn.
9) Tiba Agro
Created by Vision Brazil Investments and two former executives from Bank of America. The company’s main aim is to acquire land and resell at a profit. It has already acquired around 800,000 acres mostly in the Brazilian Cerrado (frontier region).
The real estate arm of sugarcane giant Cosan along with US pension funds (TIAA-CREF). Radar has acquired around 200,000 acres in Brazil’s frontier regions over past three years.
Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Uruguay and Chile, providing expert advice on property acquisition and investment tours.
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