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Joint venture for global expansion

June 1 2004

Joint venture for global expansion of New Zealand’s Pipfruit Breeding Programme

Pipfruit New Zealand and HortResearch today announced a joint venture to gain a greater share of the global pipfruit market driven by future growth of New Zealand’s world leading breeding programme.

Pipfruit New Zealand (PNZ) and HortResearch are partnering the Associated International Group of Nurseries (AIGN), based in the United States, and Apple and Pear Australia (APAL) to form a company to take pipfruit varieties to the global market and further growth of the New Zealand industry.

Signed today, the agreement retains special access for New Zealand growers and ensures the New Zealand industry benefits from a world-leading position in the development of apple and pear varieties.

It links all sectors of the pipfruit industry giving them an operating structure to tackle the global demand for new pipfruit varieties.

The venture requires a combined capital of $13m over ten years. PNZ, APAL and AIGN’s will be a financial investment and HR will contribute existing selected varieties.

Projections indicate the joint venture could have potential turnover of $200 million over the next 20 years. Turnover will be generated through licence fees, royalties and partnerships with producers and marketing organisations on a world scale.

Pipfruit New Zealand Chairman Phil Alison said this is an exciting and significant development that keeps the breeding programme at home for the benefit of New Zealand’s pipfruit industry and the national economy.

“It benefits the whole industry and keeps our growers well ahead of our international competition,” Mr Alison said.

HortResearch chief executive Paul McGilvary said it was a long term venture with a global perspective.

“It integrates all facets of the pipfruit business – the science, testing of selections, management of intellectual property and provision of a realistic pathway to market.

“This is a world-first for pipfruit. World-class science is fully aligned and integrated with a global company able to license new varieties anywhere in the world with significant benefits flowing back to New Zealand.”

Mr Alison said the venture was an excellent example of how growers’ commodity levy can be used to benefit them and underpin global opportunities for their industry.

The joint venture heralds a new era of strategic relationship and co-operation between the Australian and New Zealand pipfruit industries.

Apple and Pear Australia Ltd Chairman Darral Ashton said this venture will provide Australian and New Zealand apple and pear producers with an opportunity to “lead the world in the introduction of exciting new apples and pears”

AIGN president, Lynnell Brandt said its members were honoured to be associated with these organisations that have been at the forefront of new variety releases in the past.

“We are also extremely excited about the potential for new releases now and into the future. Certainly, this new joint venture has the resources to set the new standard for the world in new apple and pear introductions,” he said.

The company ownership structure will be:

Pipfruit New Zealand 45 % four directors
APAL 33% two directors
AIGN 12 %, one director
HortResearch 10% one director


The company will be launched in July 2004 when the board will hold its first meeting. Directors will be appointed over the next four weeks.

Background

In the past 20 years, an estimated $20 million of industry and Government money has been spent on pipfruit breeding in New Zealand, which produced new apples such as ‘Pacific Rose™’ (Sciros) and ‘Jazz™’ (Scifresh), aimed at keeping New Zealand ahead of the competitive international market.

Pipfruit New Zealand Inc (PNZ) is the body responsible for industry good functions in the pipfruit industry. PNZ is funded by growers through a commodity levy.

HortResearch (HR) is a Crown Research Institute owned by the New Zealand Government. HR is known internationally for its particular scientific expertise in horticulture. HR is both a shareholder of the new company and a provider of breeding services under contract to the new company.

Associated International Group of Nurseries (AIGN) is a global network of nurseries that has developed particular expertise in the management of new fruit varieties and control and management of the IP (including Plant Variety Rights, Trademarks and Patents) associated with licences. AIGN is a shareholder of the new company and a provider of licensing services under contract to the new company.

Apple and Pear Australia Ltd (APAL) is Pipfruit New Zealand’s Australian counterpart.

ENDS


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