November 25 2014 Latest news:
Michael Pollitt, Agricultural editor
Saturday, February 8, 2014
A new farmer-controlled grain storage and processing company in north Suffolk has been given a vital investment boost.
Work to construct the first 10,000 tonne phase of the advance processing unit for Future Grain is expected to start next month, said the chairman, Andrew Kendall.
He said that the directors have secured “more than 7,000 tonnes” of the target tonnage, which will enable a start to be made on the former airfield at Ellough, near Beccles.
The receipt of official approval as an EIS “enterprise investment scheme” will provide a further boost because it effectively reduces the cost of obtaining tonnage by providing 30pc tax relief.
“We are delighted that HMRC has confirmed that, based on the current business model, Future Grain Limited will meet the company requirements for EIS Tax Relief. This is the confirmation that we expected and will make investment in Future Grain even more attractive for certain individuals,” said Mr Kendall, of Lower Green Farm, Sotterley.
It would cost the purchasers of the initial 10,000 tonnes of storage about £170 tonne, partly because these investors would be buying the site. The immediate intention was to start work with the aim of completing the first phase, which includes the new APC with colour separating equipment, by the end of this year.
“We need 10,000 tonnes to make a start,” said Mr Kendall, who said that the company has also won funding of £956,000 through Defra and Europe’s agricultural fund for development.
He said that the site, which had planning permission, could potentially hold as much as 40,000 or even 50,000 tonnes. However, the drive was to complete the fund-raising of the first 10,000 tonnes phase. A further 17,000 tonnes, which would give further capacity to make even better use of the facility, would then be sold to other investors, said Mr Kendall.
The initial phase, which would be all bin storage, would include the drying and processing equipment. There would be a range of stores from two stores, each with 2,000 tonne capacity, and then others varying from 600 tonnes to 1,000 tonnes.
Given the keen demand for access to good storage and the ageing state of many on-farm stores, Mr Kendall said that the storage project had attracted wide support from across the immediate area.
Although he could not give specific figures for the cost of investment, the second phase of 17,000 tonnes was likely to be considerably cheaper at around £110 tonne because investors would not acquiring ownership of the actual site. “There is demand for storage in north and east Suffolk because it is much more cost effective than building it on farm,” he added.
As it was planned to complete the initial phase by the end of the year, there might be a bonus opportunity to utilise some storage from this year’s harvest.
The farmer-owned business has involved partners to conduct the grain marketing.
Future Grain will be a farmer owned business with the grain marketing carried out by partners, AtlasFram /ADM and Dewing Grain.
Yare Grain, which is based at Manor Farm, Cantley, secured more than 7,000 tonnes of new storage at £75 tonne by the January 31 deadline. It had to sell at least 6,000 tonne additional storage to meet the terms of Defra’s RDPE grant of £761,000. The price of further storage will be at least £100 tonne.
EDP Business editor Ben Woods analyses the implications for Aviva staff following Friday’s announcement of a potential merger with Friends Life