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IFSL Aims To Increase Kiwifruit Grower Returns

MEDIA RELEASE Tuesday, 25 January 2005

IFSL aims to increase kiwifruit grower returns by 50 cents per tray

Kiwifruit growers supplying OPAC, Eleos, Bridgecool and Seeka should see their returns rising by 50 cents per tray over the next three years, under a new consolidated supply arrangement.

From harvest 2005, kiwifruit processed by OPAC, Eleos, Bridgecool and Seeka will be handled by Integrated Fruit Supply and Logistics Limited (IFSL). IFSL was formed to consolidate fruit supply arrangements for all companies recently aligned to NZAX-listed corporate Seeka Kiwifruit Industries Limited.

Operational representatives from OPAC, Eleos, Bridgecool and Seeka met last week to identify areas where the advantages of the consolidated and integrated business could directly benefit growers.

OPAC general manager Craig Thompson says IFSL set their objective to improve returns to supplying growers by 50 cents per tray over the next three years.

“The combined entities have the capacity to handle 30 percent of New Zealand’s kiwifruit crop. This provides a very real opportunity to secure tangible savings for growers through operational efficiencies, greater purchasing power and improved logistics.”

Eleos general manager Terry Richards says these new opportunities to raise grower revenue are very timely with 2004 kiwifruit returns being hit by adverse foreign exchange movements, higher selling costs and increased volumes.

“A 50 cents per tray increase in grower returns would go some way towards offsetting the adverse movements in export returns, ” says Richards.

Seeka’s general manager operations Coll MacRury says the group is already expecting to achieve a significant increase in grower returns this season.

“While many initiatives identified by IFSL will require progressive implementation over the coming three years, we have already identified and secured immediate cost savings which will benefit growers from harvest 2005,” said MacRury.

Seeka’s managing director Tony de Farias says there are four key areas where savings can be made.

“Firstly, growers can expect a reduction in direct costs for post harvest services due to operational efficiencies from our consolidated supply structure.

“Secondly, growers will see the group’s integrated marketing strategies generating better returns from Class II, local market and non-standard supply products.

“Thirdly, the better integration of grower services, post harvest services, and Zespri’s marketing services will reduce marketing costs.

“Fourthly, growers can look forward to savings from improved integration with Zespri’s global supply chain options and initiatives.”

IFSL is looking to establish an even closer working relationship with Zespri than Seeka’s current integrated three-year rolling contract.

“Our objective is to provide Zespri with better integration of growing and post harvest services so Zespri in turn can improve the services and options they offer their global customer base. At the same time we are looking to achieve savings through packaging and other supply configurations that better meet supply chain requirements,” says de Farias.

Bridgecool general manager Andrew Darling says IFSL’s initiatives are designed to improve synergies and efficiencies in collaboration with Zespri.

“A close working relationship between IFSL and Zespri will bring strong commercial support to Zespri’s marketing programme. IFSL was formed as the best vehicle to support Zespri, and has no alternative marketing strategies.

“Growers have nothing to fear and everything to gain from IFSL,” says Darling.

The operational representatives will report back to their respective grower entities and a full meeting of the IFSL board comprising representative from Bridgecool Growers, Eleos Growers, OPAC and Seeka will occur early February.

Ends

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