New Delegat full-bodied success story

JUICED: Capital projects division manager Richard Bullock and regional winemaker Paul Barber work closely together as the new Delegat winery nears completion. PHOTO/ Duncan Brown

WELDERS mix with winemakers at the landmark Delegat winery beside the Hawke's Bay Expressway in Hastings.

Representing the biggest investment in the region's industry for more than 30 years, currently function is more important than form in the 13,000sq m building under construction, enabling it to process this year's harvest.

The next two years will see completion and beautification. Delegat employs 50 permanent staff in Hawke's Bay and 100 at harvest and currently winery administration is housed in Portacoms, both inside and outside the winery.

Delegat can make the $100 million splash on the landscape because it has one of the biggest footprints on the Gimblett Gravels and Crownthorpe Terraces regions.

It previously leased winemaking facilities but thanks to prime land purchases it needed a bigger winery.

It bought out Matariki Wines for $8.5 million in 2013 and in 2015 bought a 800ha dairy farm beside its 400ha Crownthorpe vineyard for $29.3 million.

Thanks to new plantings of Hawke's Bay-renowned varieties both quantity and quality will climb to the winery's 10,000 tonne capacity.

The current tank-holding capacity is 7 million litres, with tank sizes - all temperature controlled - this year varying from 5000 litres to 120,000 litres. Bigger ones are due.

There are currently 7000 barrels - 1.6 million litres - in humidity and temperature-controlled maturation.

Merlot, chardonnay and pinot gris plantings are part of a four-year development "to support substantial future sales growth," Delegat Group executive chairman Jim Delegat said.

Jim Delegat is one of a few Auckland wine producers/exporters of Croation extraction and with sister Rosamari developed the family business into a publicly-listed corporation of which they retain a 66 per cent shareholding.

He has worked in the business since leaving Kelston Boys' High School near the family winery in West Auckland. He now lives in Remuera.

He said hard work enabled the establishment of a business "showcasing the best of Australia and New Zealand wine" under the Oyster Bay, Delegat and Barossa Valley Estate labels.

The Hawke's Bay investment is due to demand-driven growth on the back of Delegat's popular Oyster Bay brand, Hawke's Bay reds and increasingly white wines.

Oyster Bay's first vintage won gold and the coveted Marquis de Goulaine Trophy for Best Sauvignon Blanc at the 1991 International Wine & Spirit Competition in London and hasn't looked back.

Leading London wine writer Michael Kime said that it was "pretty close to being the elusive stuff of dreams".

Mr Delegat said Oyster Bay developed significant success with Hawke's Bay merlot and pinot gris alongside Marlborough sauvignon blanc and pinot noir.

He said Hawke's Bay had "obvious significant potential" in international markets for the grape varieties the region has become "internationally regarded for".

"Hawke's Bay is seeing a substantial investment that supports the strategic growth of Delegat and its international sales drive, so as to continue to maintain its position as the leading global New Zealand Super Premium wine company in the major wine markets of the United States, Canada, United Kingdom and Australia."

Asia is under development - recently establishing an in-market sales office in China to support the burgeoning market and grow South East Asia.

While Delegat has a strong Marlborough and Hawke's Bay presence it also owns the prestigious Barossa Valley Estate winery and vineyards in South Australia.

Delegat Group is on a roll, continuing strong growth since its listing 10 years ago. Last year sales exceeded 2.5 million cases "and continue to lead the New Zealand super-premium wine category in the major export markets".

For the six months to December 31 operating profit was up 5 per cent to $21.5 million, its highest half-year earning.

Revenue was up 23 per cent to $140.2 million and net profit after tax $19.1 million - 96 per cent up on the same time last year.

Europe took 17 per cent more cases and its key North American market took 12 per cent more. New Zealand, Australia and Asia Pacific took 8 per cent more.

It spent $55.9 million investing in property, plant and equipment in its vineyards in the first half of this financial year, up from $34.3million in the same period a year earlier.

Its full-year spend will be about $100 million, as it completes the Hawke's Bay winery and buys and develops land in New Zealand and Australia. Net debt was up 25 per cent to $251.5 million, which the group said was "well within" its long-term debt facilities.

This year it expects to crush 35,000 tonnes of grapes from the 2016 harvest.

Mr Delegat is proud of the new winery, its technology and potential.

"It is state-of-the-art and incorporates some of the most recent red wine vinification processes and will annually expand capacity as the vineyards come into production, with greater yields and tonnage over the next few years."

Its build is overseen by Delegat's capital projects manager Richard Bullock, who successfully commissioned the plant's concrete, glass and stainless steel bones in time for this year's harvest.

He will oversee the building of administration buildings and a welcoming cellar door - the roadside hedge will be removed and the winery surrounded by vines.

"We look forward to participating in the wine tourism activities and representing the best of what Hawke's Bay has to offer," Mr Delegat said.