March 16, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Equilibrium Capital, Temasek, and the Public Sector Pension Investment Board (PSP Investments), which is an existing shareholder, have come together to invest in Perfection Fresh, one of Australia’s largest privately owned fresh produce companies. 

Founded in 1978 by the Simonetta family, Perfection Fresh owns farms across the country that include high-tech controlled environment glasshouses, table grape vineyards, citrus orchards, and berry farms, and a network of farmers who grow their exclusive produce.

Known for championing innovation and leading marketing in Australia’s ag sector, the business’ growth has had its foundations in working closely with its customers, strategically aligned growers, and licensing partners around the world.

Over the years the business has introduced, and expanded, some of the country’s most recognized fresh produce brands, including Broccolini  baby broccoli, Calypso mangoes, Qukes baby cucumbers, Mix-a-Mato tomatoes. Perfection berries, and Ecoganic bananas.

The Consortium

This consortium of investors represents some of the  top names in the space.

Michael Simonetta, CEO of Perfection Fresh, commented,  “Our new shareholder partners together with PSP Investments bring extensive global investment experience, and relationships in our markets and in the agricultural technologies which will help accelerate the growth of our company’s business in Australia and beyond.”

It wasn’t long ago – July 2021 – that Equilibrium Capital closed its Controlled Environment Foods Fund II (CEFF II) at $1.02 billion. 

Surpassing its initial target of $500 million by more than 100 percent, through CEFF II Equilibrium, it is pioneering the development of controlled environment agriculture (CEA) into an institutional asset class, which like its predecessor CEFF I, is providing large blocks of capital to leaders in greenhouse agriculture and CEA, enabling their operations to scale at a matching pace to market growth.

“Agriculture is ground zero for sustainable use of our natural resources, climate risk, and climate adaptation,” said David Chen, chairman, Equilibrium Capital. “In the next decades, the agriculture industry globally will be called on to provide more food, more safely, of higher quality, with greater diversity, in a more climate-challenged world with a shrinking arable, and more inhospitable, landscape. CEA addresses many of these emerging global realities.”

Joining Equilibrium is global investment company Temasek. Headquartered in Singapore, Temasek has 13 offices in nine countries and manages a portfolio with a net value of US$283 billion, as of March 31, 2021. Providing catalytic capital, the charter that defines Temasek’s mission identifies three roles: as investor, institution, and steward.

Likewise, PSP Investments is one of Canada’s largest pension funds. Established in 1999 in Ottawa, Canada, and with offices in Montreal, New York, London, and Hong Kong,  PSP Investments has $204.5 billion in AUM as of March 31, 2021 for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police, and the Reserve Force.

The Plan

As climate change intensifies and demographics shift, the world is seeing changes in food demand at the same time that it is seeing a constriction of arable land and natural resources. CEA shifts agricultural production away from a land-based industry where geography and weather determine what can be grown as well as the quality of resulting crops, into a climate-resilient industry that can focus on meeting consumer demand for fresh, safe, regional vegetables and fruits.

As the gravity of these issues intensifies for both consumers and food producers, it is expected that advanced greenhouse technologies will see greater adoption and integration.

With the capital secured through this new investment, Perfections Fresh plans to build upon its business model, its leading market position, and family business culture to expand into Asia and other international markets.

This growth strategy will be executed by the company across the whole of the CEA ecosystem via plans to build on its current facilities, including its 43-hectare glasshouse vine crop facility, and its 116 hectares of berry polyhouses. It also includes plans to expand its overall CEA footprint.

Targeting the Asia region for geographical expansion is a savvy move. In 2019, global vegetable production totaled approximately 1.1 billion tons, reflecting a sustained level of output over previous years. Of this volume, Asian countries produced 79 percent, according to data from AgraMarkt Austria (AMA). 

With nearly 5 billion people, Asia is home to more people than all other continents combined. Meanwhile, influencing factors, including climate change and food insecurity, are worsening across the highly populated region, leading to adoption of CEA food production.

The Asia-Pacific commercial greenhouse market was worth $6.02 billion last year, according to a report issued by Market Data Forecast, and is expected to grow at a CAGR of 7.8 percent to reach a value of $9.85 billion by 2026. The Asia-Pacific region has a 16 percent share of this market, and has the macros in effect to indicate the potential for further significant growth. 

“I’m thrilled to be partnering with three globally recognized investors in agriculture to take Perfection Fresh into our next phase of growth,” said Simonetta. “My family has enjoyed a positive partnership with [existing investors] Victor Smorgon Group and James Orloff over the past 15 years. We successfully expanded that partnership four years ago to include PSP Investments, and we now look forward to our next chapter with our new partners joining the Perfection Fresh business,” he continued. 

“The addition of our new shareholders provides exciting new opportunities for our key stakeholders including our customers, our plant variety licensing partners, our grower partners, and our staff.”

Moving forward, Perfection Fresh will continue to be led by Simonetta in the role of CEO, who together with the existing executive team, will ensure the company remains on its strategic trajectory of locally sourcing proprietary and premium fresh produce from its own farms, and from aligned growers across Australia. 

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– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.