April 25, 2018

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).

T&G has also agreed to sell the entirety of its Zespri shares to Seeka, valued at approximately NZ$2 million (US$1.42 million).

Under the terms of the transaction, Seeka will gain control of approximately 80 hectares of orchards currently growing Hayward, ENZAGold, ENZARed, and Zespri Sungold varieties of  kiwifruit. T&G, however, will retain rights to the brand trademarks, and will have access to the fruit produced by Seeka at the site for its existing customers in New Zealand and overseas.

Based in Te Puke, New Zealand, Seeka provides orchard leasing, management, and post harvest services through three business units: Orchard Operations, Post Harvest Operations, and Retail Service Operations, to kiwifruit, kiwiberry, and avocado growers, primarily in New Zealand, according to Bloomberg. From these operations, Seeka saw an after-tax profit of NZ$5.83 million last year.

“Seeka has an existing client base of kiwifruit and avocado growers in the area to service, and we will continue to offer services and support to growers who have supplied fruit to T&G,” said Michael Franks, CEO of Seeka. “The orchards purchased in the agreement secure additional fruit supply to make sure our operations are profitable.”

For T&G, the sale, which generated a one-off gain of NZ$7.4 million (US$5.27 million),  aligns with the company’s strategic vision of focusing on its core categories.

“The sale does not include our citrus and berry operations in Northland which remain key categories – and an important region – for T&G with continued investment planned,” Tim Clarkson, chief strategy officer, T&G told NZFarmer.

“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.”

For Seeka, 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, according to Franks.

“With new avocado developments in the area we are expecting demand for post-harvest facilities to increase,” he said. “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.”

Deal closings are expected to be April 30 for the post-harvest assets, and June 30 for the orchard sale, at which time Seeka plans to rename the business to Seeka KeriKeri. Seeka also plans to retain the entire teams from T&G’s post-harvest and kiwifruit orchard businesses as part of its long-term vision for the company.

“Our staff and grower partners will benefit from being owned and operated by Seeka which has confirmed it will invest for the long-term,” said Andrew Keaney, executive general manager, T&G. “The New Zealand avocado, kiwifruit and citrus industries need good fruit processors in Northland such as Seeka and T&G is delighted to have found such a strong partner to take the business forward.”

-Lynda Kiernan