Hortinvest forms alliance to widen investor net
|New Zealand horticultural investment specialist, Hortinvest, is collaborating with share exchange platform, Syndex, to increase investor options.|
|Project and orchard development manager, Ross Kirk, said the strategic alliance underpinned Hortinvest's long-term commitment to the cherry industry's growth.|
Hortinvest is currently seeking investors for two $15.5 million, 80-hectare cherry projects in the Central Otago area. Expressions of interest in both projects - one at Lindis River and one at Mt Pisa - close on March 29.
"Syndex - New Zealand's first online exchange for alternative investments - offers a platform for Hortinvest to list investments. Syndex will also communicate reports and financials to shareholders. In time, Hortinvest investors can trade shares on its online exchange," Mr Kirk said.
Hortinvest was in discussions with New Zealand, Australian and Asian investors including individuals, syndicates, funds and iwi groups, since releasing the projects in December and January, he said.
He said Hortinvest's projects were future-proofed to maintain healthy returns, irrespective of seasonal conditions and market forces.
"The return on investment for horticulture is significantly higher than agriculture due to cherries being an extremely high-value product, producing across the Chinese New Year demand and marketing ourselves to create cost savings.
"Using our fully integrated model, we capture the maximum possible from the value chain."
Mr Kirk said Hortinvest's comprehensive project budgets had been reviewed by a number of trusted industry professionals and found to be robust.
"Projects of this nature require a great deal of capital upfront. The aim for our projects is to be fully investor funded."
He said the number of cherry trees in New Zealand was also limited, with a waiting list of up to four years.
"However, backed by confidence in our expertise and the industry's potential, we've already ordered 106,000 trees, and are set to start planting in winter."
Hortinvest's first project, Tarras Cherry Corp, was on budget and due to harvest its first crop in December 2020, he said.
Contingencies in place for a challenging year
|Mr Kirk said Hortinvest's projects presented three scenarios for returns, depending on seasonal conditions.|
"There is no such thing as an 'average year' and there are many variables. We can only control what happens in the orchard on a daily basis, and what happens at harvest and export time. Returns range from 12 tonnes per hectare at maturity in a conservative year to 18-20 tonnes in an ideal year.
"Take this season for example. Preliminary industry figures indicate export volumes are down 40 per cent on last year. A massive frost in the Cromwell Basis last October impacted on many growers and rain affected others.
"Yet, while the global market was short, prices were well up on previous seasons and quality was significantly better, so returns were strong.
"To mitigate weather variables for our projects, we've selected elevated orchard sites and a spread of proven varieties."
|Caption: The Hortinvest team including experienced horticulturalists, Ross and Sharon Kirk, manages all aspects of the cherry supply chain from orchard to export.
Click image for high res version. |
More options for investors
|"There are limited investors in New Zealand and the Overseas Investment Office, which regulates foreign direct investment, restricts foreign ownership to 24.99 per cent per project. Our key objective is to target the right investors," Mr Kirk said.|
"Ideally, we're seeking investors to partner us for the long-term with significant returns beginning five years after planting.
"However, investors will have the chance to trade their shares via Syndex, take the capital gains and leave or stay for the long term and reap the rewards."
How investors become packhouse shareholders
|Mr Kirk said Hortinvest had already identified a suitable site for a packhouse to service the Lindis River and Mt Pisa projects, on the main road out of Cromwell, en route to Christchurch.|
"Each orchard will become an investor in the packhouse. No additional funding will be expected from investors."
Lindis River and Mt Pisa snapshot
|Minimum investment: $100,000.|
Lindis River and Mt Pisa production: 2020/2021.|
IRR: 20.8-25 per cent first 10 years.|
ROI at peak mature production: 34-59 per cent.|
Closes: March 29, 2019.|
|Hortinvest offers a complete development and management package. Prospective investors should contact the team via the Hortinvest website.|
|Located in Central Otago, New Zealand, Hortinvest Ltd is the leading consultant in New Zealand's emerging and highly profitable cherry and horticulture industry. Hortinvest employs world-leading orchard management and packhouse systems to produce and export premium New Zealand cherries.|
(Issued: February 21, 2019)
|Issued by Aqua Public Relations on behalf of Hortinvest Ltd. For more information please contact:|
Project and orchard development manager
Aqua Public Relations
+61 7 3312 2505