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T&G reports 63% drop in profits

T&G reports 63% drop in profits

New Zealand’s leading fruit company, T&G Global, registered a 63% fall in profits for 2018 to NZ$8.3 million. The slump comes in spite of an 11% increase in revenues. CEO Gareth Edgecombe said that 2018 had been a challenging year for T&G due to adverse market conditions, climatic events, and the impact of Chinese tariffs.

Unseasonably high temperatures caused problems for the 2018 New Zealand apple season, leading to larger sizes. Nevertheless, T&G’s star apple brands, Jazz and Envy, continue to enjoy global success. Envy is expected to perform strongly in Asia in the coming years, there has been significant increase in production area of Envy in Washington State in the US, with volumes expected to double this year as young trees reach maturity. While the poor European apple crop drove strong demand for New Zealand’s premium apples, the opposite was the case in North America.

Outside New Zealand, adverse weather conditions damaged T&G’s cherry season in both Australia and Peru. The firm’s tomatoes also suffered a setback due to unfavourable growing conditions in the first half of 2018 and a saturated market in the second half.

T&G said despite the uncertainty caused by Brexit and the international trade wars, the firm remains upbeat about the changes it is putting in place to prepare for the years ahead.

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T&G Global to sell Kerikeri kiwifruit orchards, packhouse facilities and Zespri assets to Seeka

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Seeka is to make a significant investment by taking over large parts of T&G’s Kerikeri operations. The firm will take ownership of T&G’s 80 hectares of kiwifruit orchards in the Kerikeri area on 30th June 2018. Moreover, on 30th April 2018, Seeka will pay approximately NZ$40 million to purchase T&G’s packing and storage facilities and a further NZ$2 million to buy out all of T&G’s shares in Zespri. T&G is to retain ownership of the Hayward, ENZAGold, ENZARed and Zespri trademarks. The agreement also sets out that T&G will have access to fruit grown by Seeka to supply its global and domestic customers. While Seeka is to rename T&G’s facilities Seeka Kerikeri, all existing staff will be retained.

Seeka aims to consolidate itself in a region which shows great potential for both avocados and kiwifruit and plans to establish it as a post-harvest hub. Meanwhile T&G intends to focus more on its core categories of citrus and berries.

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Zespri, T&G together targetting SE Asia

Disease threatens Italian kiwi

About one million trays of Zespri kiwifruit will be sold in Thailand, Cambodia, Myanmar and Laos in the 2016 season as the first step in a new collaboration between Zespri and T&G. That would make for a nearly 50% increase in Zespri’s Kiwifruit sales in those countries in the 2015 season.

During last week’s Fruit Logistica fair in Berlin, the companies have signed a Memorandum of Understanding (MOU) confirming their intention to work together to develop market opportunities together to grow export sales.

T&G Global chairman Professor Klaus Josef said both companies are big New Zealand horticultural exporters with strong global brands. Similarly, Zespri Chairman Peter McBride said both are major contributors to the New Zealand economy and offer premium branded products supported by innovative marketing. “This MOU formalises our intentions to look for opportunities to use our respective strengths to grow sales,” McBride said.

“This proactive collaborative marketing partnership will accelerate the growth in kiwifruit sales across a region with huge potential. T&G will develop sales programmes for Zespri Green, Zespri SunGold and T&G products in these four Southeast Asian countries, leveraging the strength of the Zespri brand and marketing strategy with T&G’s existing business expertise, distribution channels and strong product offering,” he said.

T&G branded products such as JAZZTM and ENVYTM apples also to be promoted

Lutz said T&G will open an office in Bangkok to represent and support the companies’ sales programmes. The new team will work together to grow sales of both Zespri and T&G branded products like JAZZTM and ENVYTM apples in the region, with a regional manager already appointed and key account managers appointments to follow.

In a joint press release, the companies aid the collaborative arrangement is the first of its kind to be approved by regulator Kiwifruit NZ (KNZ) and learnings from it will be used to inform future collaborative programmes.

McBride said the recent Kiwifruit Industry Strategy Project (KISP) consultation with growers heralded a change in direction for Zespri and collaborative marketing. “This has opened the way for Zespri to partner with companies which can offer strong coverage in new or developing regions for Zespri and increase returns to our growers.”

About 1.6 million trays of Zespri Kiwifruit were sold through collaborative marketing in 2015 and about 2.8 million have been provisionally approved for 2016.

About Zespri and T&G

Based in Mount Maunganui, New Zealand, Zespri is the buyer of NZ kiwifruit for export to every country with the exceptions of Australia and collaborative marketing approvals for non-Zespri varieties.

Zespri manages kiwifruit innovation and supply management, distribution management and marketing of Zespri Green, Zespri SunGold, Zespri Organic, Zespri Gold and Zespri Sweet Green Kiwifruit. Its sales revenue for 2014/15 was s of $1.57 billion.

According to the release, T&G Global Ltd is recognised as New Zealand’s leading distributor, marketer and exporter of premium fresh produce. Since 2012, BayWa AG, Munich (Germany) has been its major shareholder.

Along with partner growers, T&G grows fresh produce in over 20 countries, including pipfruit, grapes, citrus, kiwifruit, asparagus, berries, summerfruit and tomatoes. It has a network of over 253,000m2 of storage facilities in New Zealand and a global distribution network covering sales, marketing and logistics.

Photo (supplied): Zespri Chairman Peter McBride (left) and T&G Global Chairman Professor Klaus Josef (right) after signing the MOU at the 2016 Fruit Logistica in Berlin.