Zespri has sales of $1 billion in sights

By PHILIPPA STEVENSON agricultural editor

Zespri aims to push kiwifruit sales over the $1 billion threshold.

The monopoly marketer, which last year had worldwide sales of $746.2 million, hopes to achieve the goal with a combination of year-round fruit sales and further market development of the gold kiwifruit.

In Tauranga yesterday the company had its first annual meeting since re-regulation as a grower-owned business. The under-capitalised company, which will pay no divided on its debut year's after- tax profit of $2.5 million to March, promised significant shareholder returns in the future.

Executive chairman Doug Voss said Zespri intended paying dividends of up to 60 per cent of after-tax profit "as soon as feasible."

After only 61 per cent of shares in a $16 million capital-raising offer were taken up this year, the board was considering further options to increase the company's equity.

Zespri intended staying grower-owned, Mr Voss said, and after the meeting he suggested that the disappointing level of share take-up and a low voter turnout to yesterday's meeting could be due to apathy.

At times of great upset in the industry, there had been 100 per cent turnout at meetings, he said.

He had faith in an industry strategic plan, under discussion with growers, to address their concerns and chart a future course.

In elections for four places on the board, two incumbents were defeated.

Peter Stanes, a director for only a year, lost to Katikati grower and financial analyst Alan Sutherland, who stood on his successful campaign to retain grower-ownership of Zespri after the corporate takeover of Enza.

And Les Dickson, a director since 1997, was defeated by grower and former packhouse operator Graham Cathie, one of two candidates to pitch for Zespri head office to move to the Bay of Plenty.

Some growers expressed disquiet at Zespri's marketing other products and other countries' kiwifruit.

But Mr Voss said the company did not intend doing "anything foolish or playing silly buggers."

Chief executive Tony Marks said New Zealand product - an expected 80 million trays in three years - would remain Zespri's core business, but it was sensible to have other options.

The company had moved cautiously, taking two years to find Italian kiwifruit suppliers whose fruit could be marketed under the Zespri brand.

It expects to be marketing 10 million trays of internationally sourced kiwifruit within three years.

"We have to extend our range of products to ensure that, at every step of the way, we have what our customers and the market want, and find innovative ways to sell that wall of product ... as long as it bears the Zespri brand," Mr Marks said.

In response to growing retailer power and aggregation, Zespri had come to the "logical conclusion" it should structure marketing along regional lines. One would cover Asia and the Pacific, the other Europe and Middle East, he said.

Mr Voss told the meeting that, by the 24th week of the marketing season, 12 million trays had sold for $160 million, compared to last year's 8.8 million trays for $130 million.