Grower-Owned Kiwifruit Co-op signal expansion

Leading Grower-Owned Kiwifruit Co-operative Signals Readiness to Expand

EastPack, the largest kiwifruit grower-owned co-operative onshore and biggest handler of GOLD kiwifruit, has reported a solid financial and operational result for the year ended 31 December 2009 to support plans to expand its operations and role to secure ongoing grower ownership and control of the New Zealand industry.

“We are dedicated to working in the best interest of our growers at all times. As such, we are an attractive proposition to our suppliers who resoundingly support the premise of grower ownership and control, not just of their postharvest service provider but of our industry,” EastPack Chairman, Ray Sharp said in the Annual Report released today.

“While much of EastPack’s growth will come from our own competitive best value proposition, there may be other opportunities we will look at. This we see as necessary to ensure that no single entity outgrows other entities to the extent that it can control or dictate industry policy. There needs to be a balance and at present EastPack is the most appropriately positioned to ensure balance is maintained.”

The vertically integrated Bay of Plenty postharvest supplier recorded significant growth in the 2009 financial year in revenue, earnings and profitability and gains in operational efficiencies from upgrading infrastructure, processes and capabilities to deliver higher than average industry orchard gate returns to grower suppliers. Given the sound financial result, Directors have increased the rebate paid to Transactor Shareholders from 20 cents to 25 cents per Class I tray of kiwifruit supplied and lifted the dividend declared on Investor shares from 13 cents to 14 cents per share gross.

Retained earnings of $1.6 million (after provision for dividends) will part fund with depreciation and a small amount of bank debt another $9.0 million budgeted in 2010 for capital improvements at Edgecumbe, Opotiki and its Te Puke “super” site to handle increased volumes. EastPack handled 16 million export tray equivalents of kiwifruit in 2009, is targeting in 2010 18.25 million trays, up 14% and another 10% volume increase in 2011.

“Arguably we have the most modern and sophisticated fruit processing plant and technology available in New Zealand, particularly for GOLD Kiwifruit, and we believe this gives us a competitive advantage over other kiwifruit post harvest operators,” Mr Sharp said. “We are strongly positioned to continue to grow to support the ambitions and emerging opportunities for our grower shareholders and suppliers in the face of ongoing industry rationalisation, the need for some serious investment in plant by many competitors and the forecast for huge growth in New Zealand volumes from new varieties coming on stream.”

He said EastPack had an important role in influencing the future direction of the industry to ensure that all growers benefited from an anticipated doubling in export volumes and trebling in export receipts in the next 15 years as ZESPRI commercialises new varieties.

“The industry’s single point of entry (SPE) structure provided an essential stable environment to support investment, innovation and expansion,” Mr Sharp said. “Our collaborative and co-operative way of working together means New Zealand will continue to lead the category worldwide and our country will earn more from exporting a unique portfolio of quality kiwifruit.“

ENDS

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