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Seeka submits insurance claim for Oakside fire fruit damage

Seeka submits insurance claim for Oakside fire fruit damage

Tauranga, October 21 - Seeka Kiwifruit Industries (NZX-SEK) has submitted a multi-million dollar insurance claim for fruit losses attributable to the fire that severely damaged its Oakside packing facility in Te Puke in March.

Seeka had already lodged claims in June to its insurers for material damage to buildings and equipment, and for losses due to business interruption. Those claims had been accepted and were currently being quantified and finalised, said Chief Executive Michael Franks.

The new claim, under its marine cargo cover on the fruit, results from an extensive investigation into the cause of losses that resulted from unexpectedly high rates of fruit ripening for some of the Hayward Green kiwifruit packed by Seeka.

“We have professionally worked through what has happened and transparently kept our growers and Zespri informed throughout,” said Mr Franks.

The investigation concluded that the affected fruit had been held in wooden packing boxes. Despite having been swabbed and cleaned as recommended after the fire, the wooden boxes had been affected by residual autocatalytic compounds that had accelerated ripening. Gold (G3) fruit handled by Seeka during the same period, which had been stored in the new plastic bins the company has been introducing, were unaffected. Seeka has ordered another 9,000 of the plastic bins.

“We have strong supporting scientific documentation and have been advised by our experts that we have a very robust claim,” said Mr Franks. “The insurance adjustor understands our growers’ concerns and has advised he will let us know next week the timing of their decision on whether to accept the claim.”

The decision was expected before Christmas, he said.

Chairman Fred Hutchings said the uncertainty over the outcome of the insurance claims had caused Seeka to last week widened its August full year profit forecast, from an increase of 30-40 per cent, to 10-40 per cent, on last year’s $3.2 million after tax.

“We had an excellent six months to June 2015,” he said. “We have been very conservative in our revised forecast. The final profit will be determined by the insurance outcomes, but our fundamental positive outlook remains unaffected by the challenges created by the Oakside fire.”

ENDS

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