November 15, 2018

Seeka Limited, a Te Puke, New Zealand-based company that is the largest grower of kiwifruit in the country, and a provider of orchard leasing, management, and post-harvest services, has entered into agreements to sell five of its Northland kiwi orchards for $15.9 million.

The orchards in question are part of Seeka’s Northland portfolio, which the company announced it was selling in July of this year. The nine orchards collectively total 288 hectares, including six that were acquired by Seeka from T&G Global only months before in April. Four of the orchards being sold now were acquired by Seeka from T&G through this transaction.

At that time, New Zealand-based T&G Global announced its agreement to sell its kiwi orchards and packhouse facilities for the packing and storage of avocados, kiwifruit, and citrus – along with additional assets located in KeriKeri – to Seeka Limited in a deal valued at NZ$40 million (US$29 million).

For Seeka, which operates through three business units: Orchard Operations, Post Harvest Operations, and Retail Service Operations, the Northland region where the T&G orchards and post harvest assets exist is one that has been identified as a high growth area for both kiwifruit and avocados.

“With new avocado developments in the area we are expecting demand for post-harvest facilities to increase,” said Michael Franks, CEO of Seeka, in April. “We also anticipate increasing demand for kiwifruit as growing conditions have proven very favourable, particularly for gold varieties and with Seeka providing a new, competitive dynamic to the market focusing on quality, price and service.”

Indeed, for the month of April this year, New Zealand’s kiwifruit exports saw a year-on-year increase of 82 percent, reaching a new high of $438 million, according to Stats NZ. Gold kiwi exports jumped by $148 million, or 86 percent in value compared to the same month a year before, and green kiwi exports jumped by $50 million, or 83 percent. For the year ending April 2018, New Zealand kiwi exports were valued at $1.9 billion, representing a 9 percent increase compared to the year ending April 2017.

“Kiwifruit exports were up for all New Zealand’s principal kiwifruit markets –  China, the European Union, and Japan,” said Tehseen Islam, manager, international statistics.

Despite a booming market, Franks stated in July that from the beginning, it was Seeka’s intention to update the post-harvest facility prior to marketing the Northland land holding.

Under the terms of the sale agreements, the purchasers are entering into long-term supply contracts for each of the orchards, with Seeka continuing to manage the properties on their behalf.

A statement submitted to the New Zealand Stock Exchange notes that settlement for three of the orchards will happen upon subdivision, which is likely to occur within the coming two to six months. For the remaining two orchards, settlement is expected to take place 10 days after the completion of due diligence, which Seeka has allowed 20 days to finish.

Although the identity of the purchaser was not disclosed, Seeka has stated that the sales are not subject to Overseas Investment Office or other regulatory approval.

Negotiations are ongoing in regard to the remaining four orchards in Seeka’s Northland portfolio.

-Lynda Kiernan