Two-into-one to make a fruit and vege giant

By SIMON HENDERY

Guinness Peat Group wants to create an international produce marketing company by merging two of its investments, Enza and Turners & Growers.

GPG director Tony Gibbs said yesterday that a merger of the produce heavyweights would create added value for shareholders and the companies' suppliers and customers.

Enza, the former monopoly apple exporter, is fully owned by GPG after an acrimonious takeover played out between August 2000 and May this year.

Auctioneering and produce marketing company Turners & Growers is 46 per cent owned by GPG, and its shares are traded on the unlisted market.

Gibbs said yesterday that a team of Enza and Turners & Growers executives was investigating the feasibility of a full merger of the two companies.

He expected the team headed by Enza managing director Michael Dosser and Turners & Growers managing director Don Turner to report back within six weeks.

The merger proposal had been enthusiastically accepted within the ranks of both companies, Gibbs said.

He expected it would be approved.

"This team is going to report back to both boards and talk about the practical effects of how you do it."

The two companies each have annual gross receipts of between $500 million and $600 million and collectively employ up to 1600 staff during peak times.

Enza has significant apple distribution infrastructure in the UK, Europe and America, which could be used to get other New Zealand produce to those markets.

Gibbs said that while the two companies did not have significant areas of duplication, potential synergies existed in areas such as shipping, transport, container management, warehousing and back office functions.

Turners had a comprehensive network in New Zealand and Enza had a comprehensive overseas network.

"Turners should be able to help supply the Enza export network with products other than apples."

Turners & Growers wholesales and distributes fruit, vegetables and cut flowers, and supplies packaging equipment to the fresh produce industry.

It has also created a brand of organically grown produce called Good For You Organic.

"Potentially, we could have a much bigger international horticultural company. It is exciting stuff," Gibbs said.

Turners & Growers' last month spun off its auction business, Turners Auctions, the country's largest car seller, and plans to list it on the Stock Exchange late this year.

Gibbs yesterday would not say if a merged Enza/Turners would follow suit with a main board listing.

Turners' second largest shareholder is Equador's Noboa Corporation which, as the supplier of Bonita Bananas, is Turners & Growers' largest produce supplier.

Noboa has a 25 per cent stake through Bartel Holdings, whose director is Enza's Michael Dosser.

Dosser said yesterday that he was positive about the possibility of merging the two companies.

"I think there are some real opportunities so we certainly want to go through the process.

"If it all stacks up it could lead to a substantial and strong company."

Asked if there were concerns that GPG would sell out once it had exploited the benefits of merging the businesses, he said the investment company had been a strong shareholder in Turners & Growers for nine years.

"I don't see them as just an in-and-out investor, but if the company's a success, in some ways I don't care who the shareholders are."

Don Turner, a fourth generation member of a Turners & Growers founder family, said the merger offered an exciting future for the company.

Turner family interests still own about 10 per cent of the company.

GPG shares rose 3c yesterday to close at $1.73.