GOLDEN KIWI

INDUSTRY BOOST: The Papatu Road orchard that forms part of a new multimillion investment into SunGold kiwifruit as the kiwifruit industry here goes from strength to strength. Inset below, vines under the cover. Pictures supplied

The purchase of three Gisborne properties as part of a new private equity fund’s multimillion investment into SunGold kiwifruit has been hailed as a “really good” boost for jobs and the entire industry here.

The private equity fund, established by Origin Capital Partners — which comprises of Paul Jones (Zespri deputy chair), Lain Jager (ex-Zespri chief executive), Craig Greenlees (ex-Zespri chair) and Dominic Jones (ex-banker) —invests exclusively in SunGold kiwifruit orchards.

Origin Capital Partners managing director Dominic Jones said after a successful first-close, a total of

$69 million had been raised.

Through use of debt, the fund has approximately $135m available to invest over the next three years.

However, that fund could grow to as much as $100m, Mr Jones said.

A second round is already under way.

“The appetite has been extremely strong, with a good number of those investors from Gisborne,” Mr Jones said.

“Just talking to people, they often mention they are from Gisborne and know the properties we have purchased. We have secured four properties, of which three are in Gisborne.

“That’s not really by design and that ratio will not remain three-quarters Gisborne as other opportunities come up.”

Of the four properties, two are existing orchards including Papatu Road orchard —a 7.2ha canopy hectare orchard (4.8ha mature, the balance newer) in Manutuke.

The other two purchases were of bare land, which would be turned into orchards, Mr Jones said.

Local seasonal work to harvest orchards is expected.

“In Gisborne we will use local contractors who will hire local labour.

“We have capacity to raise up to $100m. We’ve issued our first draw-down notice, which is for about 23 percent of the funds raised, and that’s for the four properties.

“From March we will re-open for a limited period for further investment and those investors become part of the same fund when we have our second and final close.”

Mr Jones said once funds were raised and subsequently spent, assets would then be managed on a long-term open-ended fund.

“Kiwifruit continues to go from strength to strength and this year looks like a very good growing year.”

All the fruit in New Zealand from last year’s harvest has been sold, prices are strong and the harvest for this season will begin in March.

Gisborne grower Tim Egan welcomed the arrival of new investment and a new player into the region.

“Investment in the region brings employment and development in the region. There are lots of down-stream benefits from it, there’s jobs and SunGold is a high-value crop, so it means there’s lots of input and it involves a lot of people. That’s really good for the local economy.

“The big challenge for expansion in the industry is labour supply and the solution there is all of us working collectively to get local people into meaningful, good jobs.

“The other contracting factor is water. We need to come up with strategies with having enough water for growth.”