Seeka eyes sale/leaseback of orchards to drive growth

New Zealand kiwifruit and pear grower and marketer Seeka is looking at the sale and leaseback of its Australian kiwifruit orchards as part of a growth strategy for the fruit in the country, but will retain ownership of pear orchards.

Seeka Sales Manager Cameron Carter talks pears at Asia Fruit Logistica, in Hong Kong, in 2018. Photo Aaron Darc, Hort Innovation.

Seeka CEO Michael Franks confirmed on Tuesday that the company was investigating the sale/leaseback of kiwifruit orchards as part of a plan to accelerate kiwifruit plantings in Australia.

“It’s a kiwifruit growth strategy,” he said.

Seeka Australia is the largest kiwifruit and nashi grower in the country and currently holds over 273 hectares of orchards in production or development, with approximately 278 hectares available for new development, operating from a base at Bunbartha in the Victorian Goulburn Valley.  The portfolio includes 163 hectares of kiwifruit and 110 hectares of European and Asian pears, of which 21 hectares are new variety pears yet to come into full production. This includes the former Bunbartha Fruit Packers’ kiwifruit, stonefruit and pear orchards acquired when Seeka bought the business for $22m in August 2015.

Seeka has approximately $49 million invested in Australia across both the post-harvest and orcharding business.

Michael said while pear orchards were not part of the kiwi sale/leaseback plan currently under investigation, Seeka remained firmly committed to pear growing. “Yes, absolutely,” he said. “We are withdrawing some of the commodity varieties, but we are expanding new varieties.”

Seeka is one of four growers in the GV growing the new blush pear variety ANP 0131 variety, marketed as Ricó.

Sale and leaseback has already been trialled by Seeka in New Zealand, where orchards were purchased in Northland and sold to third parties with a secure term packing commitment.

In March 2019 Seeka said that as of the previous Dec. 31 it had made a $600,000 gain on $7 million of sales from its Northland orchard portfolio. Last week it said in the six months to June 30 it had sold and settled $5.4 million more, with a $1.2 million gain on sale.  This month, it has sold and expects to settle another $11.7 million, with a $1.5 million gain on sale. In addition, $7 million in conditional sales have been agreed and are expected to settle before Dec. 21. These sales will result in a gain of $1.6 million when completed, it said.

Acknowledgement and further reading

This article incorporates material originally released by Seeka to the NZ Stock Exchange and published on the website as as Seeka considers sales and leaseback of Australian orchards.

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APAL is an industry representative body and not-for-profit membership organisation that supports Australia’s commercial apple and pear growers.