African Agriculture Holdings Inc (AAGR) has announced a significant multi-year supply agreement with South Korea-based diversified holding company, Dr. Kahn. The agreement will see African Agriculture supply alfalfa to South Korea, contributing to the company’s revenue in 2024 and 2025.
Under the terms of the agreement, African Agriculture will supply the entire production from the 700 hectares currently under development. This deal represents a significant milestone for African Agriculture and validates its growth strategy, according to Alan Kessler, Chairman and CEO of the company.
“The scope of this agreement proves out our growth strategy, providing us with validation by a leading South Korean company, representative of the highest quality control standards in that market,” said Kessler.
African Agriculture has already made significant strides in expanding its reach in the West African region, having sold its products in nine countries within the Economic Community of West African States (ECOWAS). The company has also made commercial international shipments to the Gulf. This new supply agreement with Asia further validates African Agriculture’s pilot program and demonstrates its commitment to enhancing Africa’s role in global food security and sustainability.
The CEO of Dr. Khan, Mr. Lee, expressed the increasing demand for alfalfa hay in the dairy and beef industry as it improves and modernizes its operations. This growing demand necessitates the vital relationship between Dr. Khan and African Agriculture.
Following the announcement, AAGR shares traded lower by 5.98% at $1.10 premarket on the last check Thursday. This decline may be attributed to market fluctuations or other external factors.
The supply agreement between African Agriculture and Dr. Kahn is a positive development for both companies. It not only strengthens their respective positions in the market but also contributes to the global efforts of ensuring food security and sustainability. With this partnership, African Agriculture is well-positioned to continue scaling its production and expand its reach in the international market.
