Centum drops plan to buy Shs90b land in Uganda

Centum Investments has abandoned a KShs2.6 billion (approximately Shs90b or $25 million) plan to acquire land in Uganda to expand its agribusiness portfolio.

In an investor briefing Monday, Centum said that it had been unable to complete the acquisition of the 14,000 acres parcel of land in Masindi due to “caveats on the land, which rendered the project unfeasible.”

“We had legal challenges. Or rather the land had legal challenges arising from the vendor’s previous dealings. And we opted not to progress and be caught up in those issues,” said Centum Investments chief executive James Mworia.

“It is a question of the risks you’re prepared to take. We want to take agricultural risk; we don’t want to take legal risk.”

Mr Mworia declined to name the seller involved in the deal or to provide more details on the nature of the “legal challenges”.

He, however, said that Centum had not abandoned plans to invest in agriculture in Uganda and that the company was scouting other opportunities.

Meanwhile, the funds that had been set apart for the land purchase could be rechannelled to “any other project.”

Grow grains

At Masindi, Centum was planning to grow grain on a large scale with the aim of targeting the Sub-Saharan market for export.

The investment is reflective of a larger diversification into agriculture.

Through Greenblade Growers, a fully-owned subsidiary, Centum last year bought land in Ol Kalou, Nyandarua at a cost of Sh89 million with the aim of growing exotic herbs and vegetables.

READ: Centum diversifies into agribusiness with 120 acre Nyandarua farm

The latest financials from Centum show that the Greenblade had produced over 51 tonnes of fresh produce in the six months to September 2017.

“Going forward, focus is on investing in additional infrastructure, expansion of the out-grower scheme and product mix, and the continued scaling up (of) arable portions of the land,” said Centum in an investor presentation on Monday.