Japanese firm takes kiwifruit stake

Japanese firm Fresh MD Holdings has taken a cornerstone stake in NZX-listed kiwifruit company Seeka Kiwifruit Industries.

The Japanese logistics firm has bought an 18.8 per cent stake in Seeka for $8.5 million from Auckland investor and former director Chris Morton.

Morton said he had been a shareholder for probably 10 years and said it was time to move on.

"I think the industry still seems in pretty good shape," Morton said.

Seeka chief executive Michael Franks said the kiwifruit-growing and post-harvest company grew 10 per cent of the national crop and handled between 20 and 25 per cent.

Fresh MD Holdings operated major logistics, ripening and fruit-processing operations in Japan and was a significant handler of New Zealand kiwifruit, Franks said.

"The association with Fresh MD Holdings strengthens our link with the important and valuable Japanese market," he said. "This is a vote of confidence in our business model and operating systems, and recognises the efforts of all Seeka staff to deliver an efficient supply service to our orchardists, our marketer Zespri, and to our international customers."

Seeka, which also dealt in avocados, sold kiwifruit under its own brand in New Zealand and Australia and supplied other global markets through single-desk exporter Zespri.

"We take responsibility for the quality of our fruit into the market, so we just don't lose the financial accountability for our fruit once it goes in the boat here at the wharf," Franks said.

"There may well be things for us to do with Zespri and the downstream supplier that enables us to drive some efficiencies out."

The share price of Seeka, which had about 800 shareholders, closed unchanged yesterday at $2.30 a share.

Major shareholders in Fresh MD included fresh-produce specialist Dole and the Sumitomo Corporation.

The price of the transaction was $3.60 a share (ex 10c dividend) for 2.363 million shares at a total purchase price of $8.5 million.

HOME GROWN

* Seeka has more than 1000ha in kiwifruit production.
* It operates more than 20 per cent of the industry's total packing and coolstorage capacity.
* Last year it reported an operating surplus after tax of $2.576 million.