Premium cherry projects win investors' attention
|Investors seeking opportunities in New Zealand's burgeoning premium cherry industry have until March 29 to express interest in two $15.5 million Central Otago orchard projects released by horticultural investment specialist, Hortinvest.|
|Project and orchard development manager, Ross Kirk, said the 80-hectare projects at Lindis River and Mt Pisa which are set to harvest their first cherries in 2021/2022, had attracted widespread interest from investors throughout New Zealand and overseas.|
Hortinvest collaborated with sheep and beef producers looking for new opportunities in horticulture to secure the required land for the projects. Both landowners would reinvest in the projects for the long-term, Mr Kirk said.
He said discussions were underway with individuals, syndicates, funds and iwi groups looking to diversify their portfolios.
"People are excited about the chance to invest in a high-value product with established export markets. The biggest market for New Zealand cherries is Taiwan (accounting for some 30 per cent of exports) and it continues to grow. Other markets with enormous potential, which we're developing include India, Vietnam, Indonesia, Europe and the United States," Mr Kirk said.
"Some investors are splitting their investment, and therefore their risk, between Lindis River and Mt Pisa. Others have a particular affinity with a certain location or a connection to the station involved and have invested on that basis.
"Many have a background in primary industries and are comfortable about the idea of growing a crop, understand the industry and are willing to take the risks associated with variable weather. Each project has received equal interest so far."
Quality the key to premium prices
|Hortinvest was 100 per cent export focused, he said.|
"Projects of this nature are not about tonnages, they're all about quality. We must have a good quality product to achieve premium prices on the global market.
"We budget on 70 per cent export-grade packout rate and investigate opportunities to send fruit direct to consumers, shortening the value chain as much as possible, to achieve the best returns for growers/shareholders."
Hortinvest presents three financial scenarios to investors based on harvest volumes of 12, 15 and 18 tonnes per hectare.
"From the outset, we invest in the best orchard and packhouse technologies to achieve best quality and explore sustainable practices throughout the supply chain."
Model adjusts to the investor market
|Mr Kirk said Hortinvest, which released the projects late last year, had initially targeted significant investors but had revised its model to adjust to demand.|
"There has been huge demand from smaller wholesale investors seeking to diversify. Our model now also includes the option for shareholders to trade shares at certain intervals via online exchange platform, Syndex.
"Some people want to commit for the long-term, others want to come in at various intervals and others want to take a capital gain early in the production phase. Our model is structured to accommodate various needs, although it's financially advantageous to invest from the outset."
Mr Kirk said Hortinvest was confident it would raise the funds for both projects and would proceed with planting the first of 106,000 trees in June.
"After March 29, the next step is to form the management companies, draw the tree maps, lay irrigation and start working up the land," he said.
Future horticullture developments on the agenda
|After establishing its cherry ventures, Hortinvest will develop an apricot project to produce premium New Zealand-bred varieties by 2022.|
Mr Kirk said 20,000 trees had already been ordered for planting to begin in Central Otago in 2020.
Lindis River and Mt Pisa snapshot
|Minimum investment: $100,000.|
Deposit: 10 per cent March 29. Progressive payments over four years|
Production: Starts 2021/2022.|
IRR: 20.8-25 per cent first 10 years.|
ROI at peak mature production: 34-59 per cent.|
Closes: March 29.|
|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: March 18, 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