Hortinvest seeks partners for high-tech cherry projects in NZ

November 26 , 2018

Central Otago-based Hortinvest Limited is making the most of strong global cherry demand with plans to set up two 80-hectare cherry orchard projects to be planted over the next two years. 

The company, founded in 2016 by experienced horticulturalists, Ross and Sharon Kirk, expects investments in each project to be worth NZ$12-16 million (US$8.1-10.9 million) and is on the hunt for investors. 

The projects will add to Hortinvest’s cherry sector portfolio of operations which includes the Pure Pac Limited packhouse in Otago’s Cromwell region and production-export business Tarras Cherry Corp Limited.

The Tarras orchards on 40ha of land were only planted a few months ago.

“Hortinvest offers a fully integrated grower-packer-shipper model,” says project and orchard development manager Ross Kirk.

“We source land, establish and manage orchards and packhouses, and market and export premium cherries to maximise returns to investors. 

“Cherry opportunities focus on the distinct market advantages of producing in Central Otago including developing a counter-seasonal product for export at a time when the New Zealand cherry industry is growing exponentially, yet not meeting demand.”

The company highlights export sales for New Zealand cherries have quadrupled in the past four years, with more than 4,000 metric tons (MT) exported in the 2017-2018 season, of which Central Otago accounts for around 90%.

Summerfruit NZ predicts a 40% dollar value growth in New Zealand cherry exports over the next two decades.

“New Zealand’s cherry industry has demonstrated strong long-term growth, driven by New Zealand’s key competitive advantages such as the ideal climate and conditions, proximity to, and free trade agreements with Asia,” says Kirk.

“As a Southern Hemisphere cherry producer, the New Zealand industry is not competing with produce from the Northern Hemisphere.

“Therefore, our harvest from December to February is uniquely positioned to supply Asia (driven by the Chinese New Year appetite), Europe, the United States and the Middle East.”

He highlights Chile is the biggest competitor during New Zealand’s production with a window between November and January, however the South American nation focuses on sea freight with produce taking longer to hit the market in Asia.

“Our produce is shipped by air and arrives fresh within days. Buyers know the difference and are willing to pay a premium,” notes Kirk.

He claims New Zealand’s reputation for producing premium quality cherries, perceived globally as a luxury product, have enabled the fruit to receive the highest price per MT in global markets.

“Now is the time for investors seeking new opportunities to become involved in a growing and exciting industry,” he emphasizes.

Kirk said Hortinvest’s contracts were long-term (seven to 10 years) and required a minimum investment of $750,000 spread over four years. 

“It costs between [NZ]$150,000 (US$101,880) and [NZ]$200,000 (US$135,861) per hectare based on a 40-80 hectare block, so there are obvious economies of scale. Investors can expect production to start three years after planting, with yield peaking at 18-20 tonnes per hectare as the trees mature,” Kirk says.

In March, the New Zealand Government released the Coriolis Report which investigated Emerging Growth Opportunities in the cherry industry as part of the wider New Zealand Food and Beverage Information Project.

The report found the Southern Hemisphere was responsible for only 5% of global cherry production yet generated 49% of global value.

“Specifically, the Central Otago region’s abundant land, water and soil resources offer significant potential for future horticulture development in a sector where new international markets are opening,” says Kirk.

“While the cherry industry was Hortinvest’s focus due to high international demand, excellent returns and government support for its growth, other offerings included apricot, plum and apple projects.”

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