Newspaper Article 2013 – Apple exporters form strategic alliance

Apple exporters form strategic alliance

By Patrick O’Sullivan

New Zealand’s largest apple exporter Mr Apple has bought a 50 per cent shareholding in apple exporter Fern Ridge Produce.

Fern Ridge Produce executive chairman Sam Newbigin said the investment would see the two companies working collaboratively in the international market.

“We will continue to export under our own brands as two separate entities but will not compete for the same business,” he said.

“Together we will increase our focus on current key customers and strategically approach new markets to ensure we obtain the maximum return and coverage from the fruit supplied.”

Both companies were strongly positioned to capture existing and future market potential, particularly in Asia where there are new opportunities and growing demand for New Zealand apple varieties, he said.

Fern Ridge Produce managing director Hamish Davis said growers had asked for more consolidation of apple exporters to help maximise returns from the market.

“This is the ultimate solution. We are two strong brands running different business models who can now collaboratively use each other’s strengths.

“By working independently we aim to maximise returns to growers and benchmark each company’s performance throughout the apple season.”

Pipfruit New Zealand chief executive Allan Pollard said it was an encouraging sign for the industry.

“Likewise when BayWa bought into Turners and Growers – clearly it was a strategic move for them – but it shows there is some confidence out there,” he said.

“Inevitably there is going to be aggregation because scale is important.

Mr Apple general manager Andrew Van Workum said negotiations had taken more than six months.

“This is a significant investment by the owners of Mr Apple.

It shows our confidence that through this collaboration we believe we will see better prices returned to both companies, grower suppliers and our own orchards.

Mr Apple Directors also believe that apple exporter consolidation and coordination will assist the industry,” he said.

Fern Ridge Produce is part of the Fern Ridge Group. Established in 1995 it exports meat, seafood, wine and fruit, employing 20 people based in Hawke’s Bay. Fern Ridge Produce has been New Zealand’s largest non-grower owned apple exporter.

Mr Apple is New Zealand’s largest vertically-integrated apple grower, packing and exporting between 3.5 million and 3.8 million cartons per year.

It has 53 orchards, three packhouses, a coolstore and provides a logistics service for growers in Hawke’s Bay and Nelson.

It employs 180 people on a permanent basis and at the peak of the season employs up to 1700.

Direct Capital Investments took a majority shareholding in Mr Apple’s parent company Scales Corporation in 2011, after the shareholding became available due to the collapse of South Canterbury Finance.

Mr Pollard said the alignment of Fern Ridge Produce and Mr Apple showed growing optimism in the pipfruit sector.

“When you look at some of the opportunities emerging overseas, we are very excited about it.”

Photo caption – SYNERGY: Fern Ridge and Mr Apple have joined forces. Pictured (from left) are Andrew van Workum, Mr Apple general manager, Fern Ridge chairman Sam Newbigin and Fern Ridge managing director Hamish Davis.
PHOTO/GLENN TAYLOR