Chris Gibbons:
Well, an excellent set of results from agricultural group Afgri in what looks like a fairly tough environment to me. Headline earnings per share up 65.6 percent on the prior year. Group earnings per share up 45 percent, net cash on operating activities 537-million. Afgri Managing Director Jeff Wright is on the line from Johannesburg.

Jeff good evening and welcome to you on The World at Six. Have these results according to your company statement come on the back of another challenging year for agriculture? It can’t have been too challenging if you deliver a 65.6 percent increase in your earnings?

Jeff Wright:
You must remember that we came off a bit of a low base in the previous year, but yes, the results are really good in light of what is currently happening in agriculture, so we are really happy about that.

Chris Gibbons:
What are the key things affecting the business?

Jeff Wright:
The key things for us certainly is the fact that commodity prices across the board have improved over the last year and that is obviously good for farmers and encouraged higher plantings and really the summer plantings for corn specifically were almost a million hectares higher than they were the previous year and that gave rise to the improvements in our performance in the retail businesses specifically.

Chris Gibbons:
Now do I understand correctly that you are thinking of spinning one of your divisions?

Jeff Wright:
Where we are at the moment, we have got two separate sections of the business, we have got the agricultural services business, which really looks after the primary producer and the agro processor. And then, we have our downstream protein businesses, which really are our animal feed business and the new boiler business that we acquired.

And what we want to do is we want to investigate the possibility of listing them separately, given the fact that Rainbow has now exited the listed market. It really just leaves Astral and the Country Bird Holdings, position us as number three, ahead of Sovereign. So it is a great group and we will certainly be talking to the investors to see whether they think it could unlock value for them.

Chris Gibbons:
Jeff I am not quite with you on the business logic of that. Could you take me a couple of steps further down the line there? Why would it be good to spin off from your company?

Jeff Wright:
I think if you look at the agricultural services side of the company, what we are looking for there is higher commodity prices. If you look at the food and downstream protein businesses, higher commodity prices actually depress margins because that obviously increases the price of food, which would then increase the input price for chicken.

So it is kind of difficult to understand what actually causes a good year or what doesn’t. So I think if they are separately focussed businesses, it might be easier to understand. And certainly as I say, with Rainbow having exited the market and I think the market looks favourably at vertically integrated boiler businesses.

Chris Gibbons:
You last year, I think, exited the cotton ginning business? Was that a wise move?

Jeff Wright:
Cotton ginning for us was, certainly when South Africa was a player in the cotton business, it made a whole lot of sense, obviously we supplied inputs to cotton farmers and then ginned the cotton on their behalf and sold it to the spinners.

When the South African textile industry went through a bad phase, the Chinese entered the market, so we moved our ginning facility up north to Zambia to reduce input costs and make sure that we actually had cotton to gin. Markets changed and we became a very small player in a global market. So it made sense for us to exit that business.

Chris Gibbons:
Okay, talking about your international businesses? You have operations in Western Australia, you mentioned Zambia and your company statement says a particularly difficult year.

Jeff Wright:
In fact, Australia, but specifically there, in Western Australia, they had they worst drought in history and we are quite happy, the fact that the company did better than break even in a really terrible year.

So it looks much better for the year ahead and it is the first year, since we have been in Western Australia that we have had a drought. That business has done really well for us.

Chris Gibbons:
Okay, how do you look going forward for the next 12 months?

Jeff Wright:
We like the price of commodities, specifically grain, given the ethanol effect and what that has done to grain prices in the States. So we are bullish about grain prices and we think that we will see the same kind of plantings this year as we did last year. So we are bullish for the year ahead.

Chris Gibbons:
That is Jess Wright, MD of Afgri on the line from Johannesburg.