Zespri looks forward after two tough years

MEDIA RELEASE – 24 July 2013

Zespri’s 14th Annual Meeting looks forward after two tough years

The New Zealand kiwifruit industry is beginning to look forward with a sense of cautious optimism after two tough years of having to learn how to manage the bacterial disease Psa, Zespri chairman Peter McBride says.

Mr McBride was talking after the 2013 Zespri Annual Meeting, held in Tauranga today, which was attended by more than 300 grower-shareholders.

In addressing the meeting, Mr McBride said while the industry’s path out of Psa remained uncertain, it had made tremendous progress since 2010, when the disease was first confirmed in New Zealand.

“We have come a long way, learnt a lot and taken some really positive steps to returning the industry to growth again. This spring will be a critical time in understanding how well we are doing, which is why we say there is cautious optimism in the industry rather than stating categorically that we are on the path to recovery,” Mr McBride said.

Mr McBride told grower-shareholders that 2012/13 delivered strong results.

“We had the highest Green returns since 2003, record Gold returns and the highest Organic returns since 2008.”

He said the strong results are due to Zespri’s commitment to a long-term strategy to build Green returns and improvements in supply chain performance right across the industry.

These strong returns were likely to continue into this season, based on season sales to date.

“Fruit markets are strong and we are having a vintage-taste season following the hot dry summer, which means demand is strong across our markets” Mr McBride said.

In addressing Zespri’s historic customs issues in China, Mr McBride said it was clear that they would have no impact on Zespri’s future in China which, subject to supply, is forecast to be Zespri’s largest market by 2018.

Mr McBride said the fact the legal process remained live in China did limit what could be said about the case.

“We have to work through the historic customs issues in China in a deliberate and considered manner. We cannot fast-track this process. We must be respectful of China’s system and continue to cooperate with the relevant authorities in a humble and open manner until the matter is resolved.”

Mr McBride said that there was tremendous opportunity for New Zealand kiwifruit growers in a world of growing middle classes and demand for quality and safe-to-eat food.

“Our commitment to excellence must remain if we are going to continue to grow,” he said.

Zespri CEO Lain Jager said the enthusiastic market reaction to the first commercial quantities of the new Zespri Gold variety, known as SunGold, was great news for the industry. SunGold is the newly-commercialised variety the industry has moved to after Psa had devastated the original Hort16A Zespri Gold variety.

“Our customers’ enthusiasm to grow their Gold sales gives us confidence in this category as we recover from Psa and rebuild our gold volumes to levels higher than before Psa,” Mr Jager said.

Mr Jager explained the changes made to Zespri’s sales and marketing structure to support the company’s next growth stage, as the Psa recovery pathway starts to deliver.

“Our strategy is to deliver the world’s leading portfolio of kiwifruit products,” said Mr Jager. Zespri will continue to invest in developing new varieties, accelerate its 12-month marketing programme and continue to refine supply chain operations to achieve this goal.

With regards to China, Mr Jager said the company had identified a number of issues which, in combination, meant its oversight of the actions of our former importer were not sufficiently robust.

“It is critical that the company learns from this experience and moves forward with respect to its operations and relationships in China and we will continue to keep growers updated with our progress,” Mr Jager said.

ends

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