What started off as a hobby in the Hawke's Bay is a now successful business where the main market for the produce is Auckland.
Mt Pisa Station’s landowners, the MacMillan family, are among the investors who underwrote the planting.
The sheep and beef business has set aside 80ha of prime pastoral land for the venture as it diversifies into horticulture. The orchard will produce cherries for export from the summer of 2021-2022.
Hortinvest project and orchard manager Ross Kirk said the stage one planting of 7500 trees had gone to plan.
The second and largest planting is scheduled for winter 2020 and the final planting for winter 2021. In total, 53,000 trees will be planted.
“Irrigation is now being installed so we can start piping water (from the Clutha River) to the newly planted trees,” Kirk said.
The Mt Pisa development is one of two $15.5 million cherry developments in progress in the region. Stage one planting at the Lindis River development at Lindis Peaks Station is also complete.
Station manager Shane MacMillan said projected returns from the family’s shareof the cherry development will equal the whole farm’s return in one year.
The intensive nature of cherry production means the returns come faster (than agriculture),” he said.
MacMillan, his parents Murray and Jackie and sisters Nicki Cleave and Kendra Breen and their families will directly benefit from the development.
“Diversification -- especially given current fluctuating wool prices -- and succession planning were our objectives and this will help the business no end,” he said.
“We’re lucky to have the land which is ideal for cherry production, and access to the Clutha River for water. It’s happened pretty quickly since we started talking about it and by this time next year the second planting will be complete,” he said.
The development is a small parcel of the 4600ha Mt Pisa Station owns in the region.
Hortinvest’s grower-packer-shipper investment model offers investors maximum returns by managing all services in-house including sourcing land, setting up and managing high-tech orchards and packhouses, and marketing and exporting produce.
Since the release by Mt Pisa in January 2019, investors have included individuals, syndicates and iwi groups NZ-wide and overseas, Kirk said.
With 30 years’ experience in growing and marketing New Zealand cherries globally, Hortinvest has existing and developing markets for its cherries in Asia, Europe and the US.
When in production, the cherries will be harvested from December to February and take advantage of the growing seasonal and Chinese new year market globally.
Kirk said Hortinvest’s developments are a response to global demand for New Zealand cherries which are perceived as a luxury product.
Other orchard projects are on the agenda.
Mt Pisa project at a glance
• Value: $15.5 million
• Hectares: 80
• Water source: Clutha River
• Existing and emerging markets: Asia, Europe
• Minimum investment: $100,000
• IRR: 20.8-25%, first 10 years
• ROI at peak mature production: 34-59%