MyFarm launches kiwifruit syndicate

MyFarm director and shareholder Andrew Watters.

MyFarm, a major New Zealand farm-investment company, has partnered with Tauranga's GroPlus group to launch a $5 million kiwifruit orchard syndicate.

This is the first venture into the sector by MyFarm, which until now has been focused on dairy, sheep and beef investments.

The new syndicate, Bay Kiwifruit Limited Partnership (BKLP), plans to buy up to 21 canopy hectares of premium Bay of Plenty orchard land, and has a long-term plan to convert Green (Hayward ) orchards to new kiwifruit varieties.

"If we increase operating profits on existing orchards, then we also have the ability to add value by using the green rootstock to graft on new, higher yielding and priced kiwifruit varieties as they are released by Zespri," said GroPlus managing director Steve Saunders.

"There's also an ageing population in the sector, so there's going to be a lot of change of ownership and consolidation. This syndicate offers another opportunity for exiting orchardists, as well as an avenue for people that are interested in getting into the kiwifruit sector, but may not have the funds to invest in an orchard."

GroPlus is an orchard management company based at the Newnham Park Horticultural Innovation Centre in Te Puna, and is known for its focus on agro-technology ventures. GroPlus manages 368 hectares of kiwifruit orchards in the Bay of Plenty and will source and manage the orchards bought by BKLP. The new syndicate will have an independent governing board.

Orchards bought must have the ability to produce 13,000 trays/per canopy hectare within three years, said Mr Saunders. The reason for focusing on Green orchards was that there had been a lot of the new G3 variety planted, with almost no new licences being issued, and Gold orchards were more expensive.

"We're not precluding buying a Gold crop, but we see Green as stable investment that presents opportunities for future conversion if another variety comes along," said Mr Saunders. "Green is still the majority of what's planted and it's a solid investment."

There are a number of kiwifruit syndicates in the Bay, but it is understood this is the first time a leading farm management company in the dairy and beef and sheep sectors has entered the market.

MyFarm director and shareholder Andrew Watters said the success of the kiwifruit industry made it a compelling proposition for investment consideration.

"When you come to the Bay of Plenty, you can see the wealth that's been created," he said.

Mr Watters, a former Sharemilker of the Year, said compared to MyFarm's traditional land-based investments in dairy and sheep and beef, kiwifruit came out on top for low costs of production, high operating profit margins and the ability to generate cash returns.

"Canopy Kiwifruit has been the quiet achiever of the primary sector," he said. "Orchard productivity has increased by 125 per cent over the past 25 years. The fact the industry has survived and bounced back from Psa is actually a positive thing from our point of view."