TIDMDKL
RNS Number : 8685E
Dekeloil Public Limited
09 July 2019
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
DekelOil Public Limited / Index: AIM / Epic: DKL / Sector: Food
Producers
9 July 2019
DekelOil Public Limited ('DekelOil' or the 'Company')
Commencement of construction at cashew processing project
DekelOil Public Limited, the West African focused agricultural
company, is pleased to provide an update on activity at the 10,000
tpa (expandable to 30,000 tpa) raw cashew nut ('RCN') processing
project at Tiebissou in Côte d'Ivoire (the 'Project'), including
the commencement of construction works at the site. Construction is
due to take 12 months to complete with first production expected in
June 2020. Once operational, Tiebissou will be DekelOil's second
producing project in Cote d'Ivoire, alongside its Ayenouan palm oil
project. Tiebissou is being developed by Capro CI SA, a wholly
owned subsidiary of Pearlside Holdings Ltd ('Pearlside'), in which
DekelOil has a 37.8% shareholding together with an option to
acquire a further 17% interest.
Works at the site at Tiebissou have now commenced following an
official opening ceremony attended by local government and
community leaders. Key activity undertaken or due to commence
shortly are detailed below:
-- Established an administration office to support construction works
-- Bore holes drilled and three cubic metres per hour of water
identified at two sites on Pearlside's land, each sufficient to
support the boiler and processing requirements, as well as provide
a backup water source
-- Electrical contractor appointed and commenced work to establish connection to the grid
-- Final technical changes to the mill design and construction
schedule in Italy both agreed, with construction due to start in
August
-- Infrastructure works including land clearing and earthworks
have been scheduled with the contractor and will commence at the
end of the wet season in August
-- A recruitment agency has been appointed and the process of
gradually building an initial team of approximately 300 employees
during the latter part of the year has started - Mill manager and
Technical manager are now appointed
-- Confirmation received that the Project qualifies for the new tax incentive scheme:
o Expected to generate cash savings of approximately EUR350,000
during the construction phase due to the inclusion of a full
customs exemption
o Tiebissou to be wholly exempt from corporation tax for a
10-year period and exempt from 75% of corporation tax for the
subsequent five-year period
o The previous code did not include a full customs exemption but
had a longer 13-year full exemption from corporation tax. Further
details are provided below.
DekelOil Executive Director Lincoln Moore said, "The
commencement of the construction site and construction phase at
Tiebissou is a milestone event for the Company. We would like to
take this opportunity to thank the local government officials and
members of the community for sparing the time to attend the opening
ceremony at the site and for the support they have shown for the
Project. In addition, the process to transfer Tiebissou to the new
tax code has been completed. This is an exciting period for
DekelOil and the Tiebissou village and I look forward to providing
further updates on progress made on the ground during the
construction phase as appropriate in due course."
Further information
The Project
Tiebissou is to be developed in line with the collaborative
model DekelOil deployed at its producing palm oil project at
Ayenouan. This is centred on constructing a state-of-the-art plant
which will process RCN grown by local smallholders.
The development of Tiebissou is being overseen by a team
comprised of executives who played a key role in the construction
and commissioning of the mill at DekelOil's palm oil project in
Ayenouan. A turnkey contract for the engineering, manufacture,
delivery, installation and commissioning of the Project, together
with relevant training of personnel, has been awarded to Overseas
Projects & Services Limited (see announcement of 31 October
2018). In addition, a contract has been awarded for the
construction of civil works and associated infrastructure to
Entreprise Kone Daouda Soukpafolo Nouvelle ('EKDS'), an established
civil engineering company in Côte d'Ivoire; and Société
Internationale d'Ingénierie en Structures et Assemblages
Métalliques ('SIISAM'), an associate company of EKDS, specialising
in metal and civil works (see announcement of 19 November
2018).
New Investment Incentives Code
Confirmation has been received from the Government of Côte
d'Ivoire that the Project at Tiebissou will now be covered by the
new Investment Incentives Code ('the New Code') administered by
government agency CEPICI. The New Code, which the Company elected
to apply for, replaced the previous Investment Incentives Code
('the Old Code') in August 2018. In 12 July 2018, the Company
announced Tiebissou was to be covered by the Old Code and as a
result future profits generated would have been fully exempt from
corporation tax for 13 years and partially exempt for a further two
years. Under the Old Code however, customs duties would have been
payable on all imported materials required for the construction
phase, subject to a 40% exemption. Under the New Code, all imported
materials are fully exempt from customs duties and this is expected
to generate cash savings of approximately EUR350,000 during the
construction phase.
Following a comprehensive evaluation of the respective benefits
of both the New and Old Codes, the tax benefits potentially
receivable under the New Code outweighed those potentially
receivable under the Old Code. Accordingly, application was made to
novate the Project across to the New Code. CEPICI has confirmed
that the transfer to the New Code is now effective.
DekelOil's 100% owned palm oil project at Ayenouan will remain
under the Old Code. As Ayenouan is a producing asset, the tax
benefits available to Tiebissou under the New Code during
construction are not applicable. Ayenouan continues to benefit from
a 13-year full exemption from corporation tax and a further
two-year partial exemption. In Year 14, profits will be taxed at a
rate equivalent to 50% of the prevailing rate of tax, rising to 75%
in Year 15. Profits thereafter will be taxed at the full prevailing
corporation tax rate, currently 25%.
** ENDS **
For further information please visit the Company's website or
contact:
DekelOil Public Limited
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
Cantor Fitzgerald Europe (Nomad and
Joint Broker)
David Foreman
Richard Salmond +44 (0) 207 894 7000
VSA Capital (Joint Broker)
Andrew Monk (Corporate Broking)
Andrew Raca (Corporate Finance) +44 (0) 203 005 5000
Optiva Securities Limited (Joint Broker)
Christian Dennis
Jeremy King +44 (0) 203 137 1903
St Brides Partners Ltd (Investor Relations)
Frank Buhagiar
Cosima Akerman +44 (0) 207 236 1177
This announcement has been released by Lincoln Moore, executive
director of the Company.
Notes:
DekelOil Public Limited is a multi-project, multi-commodity
agricultural company focused on West Africa. It has a portfolio of
projects in Cote d'Ivoire at various stages of development: a fully
operational palm oil project in Ayenouan where fruit produced by
local smallholders is processed at the Company's 70,000tpa crude
palm oil mill; a cashew processing project in Tiebissou, which is
due to commence production in 2020; and a second palm oil project
in Guitry which is under development.
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contact rns@lseg.com or visit www.rns.com.
END
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