Buoyant Nobilo on $100m spend-up

By SIMON HENDERY liquor writer

Nobilo Wine Group plans to spend more than $100 million over the next six years as part of an expansion that will more than treble the company's production.

Managing director Brian Vieceli said Nobilo, the country's second largest wine company, expected to crush more than 9500 tonnes of grapes this year, up from 4700 tonnes last vintage.

The crush would increase to more than 18,000 tonnes of grapes in 2008 the equivalent of 1.5 million cases of wine, up from the equivalent of 385,000 cases which the company produced last year.

"To achieve this growth there is an attendant major capital expenditure programme," Vieceli told a meeting of Nobilo's customers and suppliers in Auckland.

"We will spend over $100 million by 2008."

The company owns or leases 750ha of vineyards, 538ha of which is in Marlborough.

Under its expansion plans, sauvignon blanc will remain Nobilo's core varietal, making up 50 per cent of sales.

Chardonnay will account for 17 per cent of sales, merlot 8 per cent and pinot noir 5 per cent. The varietal mix for the company's White Cloud brand will account for a further 14 per cent of sales.

About 60 per cent of Nobilo's sales are to the domestic market. The volume of New Zealand sales is expected to increase by 50 per cent by 2008, but a percentage of total sales will drop to 39 per cent.

"Export is obviously going to be the main driver of the New Zealand wine industry opportunity," said Vieceli.

"However, from a Nobilo point of view, while we are very committed to growing our exports, domestic sales will continue to be of major importance."

Europe, Nobilo's biggest export market, would continue to account for about 27 per cent of sales, he said, although the number of cases exported would double.

The company's major growth export market would be the United States, where it planned to increase its percentage of sales from 5 per cent this year to 20 per cent in 2008.

To cope with increased production, the company has built a new bottling hall in Huapai.

It is also building new administration and warehousing facilities there, which are planned to be completed by the end of June.

That would mean all its Auckland operations would be at one site.

Nobilo is owned by listed Australia wine group BRL Hardy.