R.E.A. Trading plc

ABOUT

REAT is an investment holding company of which two subsidiaries have established businesses: REA Vipingo Plantations Limited (RVP), a 97% owned Kenyan subsidiary, principally engaged in the cultivation of sisal in Kenya and Tanzania and Wigglesworth & Co Limited (Wigglesworth), a longstanding London based merchant trading natural fibres.

REAT is currently developing a new abaca plantation in the Ambon Province of Indonesia.

REAT also has interests that are not currently in production in two coal concessions in the East Kalimantan Province of Indonesia but does not intend to invest in any additional coal concessions. If and when mining commences or recommences at the existing concessions, all economically mineable coal in those concessions should be rapidly recovered.

Sisal

The area planted with sisal is some 15,000 hectares. Annual production ranges between 18,000 and 20,000 tonnes of raw fibre, making RVP the largest sisal producer in East Africa. RVP also has a sisal spinning mill in Tanga (Tanzania) and a small horticultural business in Kenya.

Abaca

Development of the abaca plantation should reach some 2,000 hectares by the end of 2023, with initial production commencing in 2022 and eventual yields of between 1.5 and 2 tonnes per hectare. The company is cooperating with the Rainforest Alliance with a view to obtaining Rainforest Alliance certification that the abaca project is sustainable on completion of project development.

Commodity trading

The principal fibres traded by Wigglesworth are sisal and abaca. Wigglesworth distributes most of the raw and spun fibre produced by RVP and it is intended that it will do the same for the raw abaca produced by the new abaca project.

Traditionally the main end use for sisal fibre has been in the manufacture of agricultural twine, general cordage and sacks but, with increased competition from synthetic fibres, these traditional uses have been replaced (although in lower volume) by expanding non-traditional uses including cores for wire ropes, buffing cloth for various industrial polishing applications, sisal pulp used in the manufacture of speciality papers, sisal carpets and fibre reinforcement for plaster wall coverings.

Abaca’s traditional use for marine ropes (for which its water resistance made it particularly suited) has been largely displaced by synthetic fibres but is instead increasingly used in producing speciality pulp with the fibre’s base characteristics of long staple length, cellulose content and inherent strength making abaca pulp particularly suited for certain types of paper. These include paper used in tea and coffee bags and pods, sausage casings, electrolytic insulators, currency notes and medical filter papers (with the latter having seen strong demand during the Coivd-19 pandemic).

Wiggleworth’s marketing competence and RVP’s growing capacity has permitted REAT to establish a strong presence in the sisal market in a way that underpins both the sisal merchanting and sisal growing operations. The new abaca project will enable REAT to establish a comparable strong presence in the abaca market with similar benefits.