Seeka expands Northland business

The completion date for the orchard part of the sale is June 30.

Seeka is buying the post-harvest facilities for the packing and storing of avocados, kiwifruit and citrus. Also, T&G has agreed to sell all its 253,000 Zespri shares to Seeka, valued at about $2m.

T&G is also selling Seeka about 80ha of kiwifruit orchards in and around Kerikeri where it grows Hayward, ENZAGold and ENZARed kiwifruit and Zespri Sungold varieties. T&G will, however, remain the trademark owner of the kiwifruit brands.

Seeka chief executive Michael Franks told Rural News the move is part of Seeka’s overall growth strategy, which sees good potential for kiwifruit and avocados in Northland. 

He says it is also good for Northland, particularly employment.

“We had a packhouse up there before, but we exited that arrangement. We had growers, clients and a grower base and an expanding business, but no post-harvest facility,” Franks says.

“We strategically want to be there because it is such a good Gold kiwifruit growing area and it has expanding avocado production.

“We did the review and decided the best opportunity for us to have a foothold in that region is the T&G packhouse. This fits with Seeka’s strategy with the business founded on kiwifruit. 

“We are pushing into selected varieties we are interested in as well as avocados. We are happy to spread our geographical footprint.”

Seeka is buying Zespri shares as part of the deal after recently selling out of its 740,606 shares in Zespri Group after opposing constitutional changes at the monopoly export body that tie shareholdings to trays of fruit produced.

 “We exited out of them probably knowing we would get back into them. We had to tell people we were exiting them because of the debt and it was a reasonably sizeable transaction. But we weren’t happy with the changes to the constitution. We haven’t yet determined what we will do with the lot we are going to buy.”

Franks says Seeka is on a growth path. The company’s share price has gone up 63% in the past two years and it has been paying a reasonably good dividend -- about 5% tax free.  

“There is pressure to keep the momentum and keep going,” he adds.

After the sale is complete Seeka will rename T&G’s Kerikeri facilities and operating business entities Seeka Kerikeri.

Avocados are probably an unsung phenomena, Franks says.

“Avocados have been going gang-busters. The return back to growers this year from a Seeka tray is over $40, maybe $40.90. The previous record was $26.80. It just shows you how good it is,” he says.

Citrus, berries stay

T&G is not including its Northland berry and citrus operation in the sale as it intends to invest further in these growth categories.

T&G’s executive general manager, New Zealand, Andrew Keane, says sale of T&G’s kiwifruit operation is part of its intention to focus on core produce categories including citrus and berry growth in Northland and other regions.

“We have land ready for development and will be investing also in crop protection facilities for our existing operation in Kerikeri. We also hope to employ more people through these investments” he says.

T&G will also have access to fruit grown by Seeka for its existing customers in NZ and overseas.