Many olive growers have planted unwisely and there could be many out-of-pocket people in a couple of years, says the chairman of two new olive industry companies in Nelson.
Joe Cuthbertson heads Olive Services Nelson and Nelson Olives, both formed this month with 17 grower shareholders and $70,000 in capital.
Of
the companies' mission, Mr Cuthbertson said: "We are not a feel-good cooperative venture, we are a business and we have to make a profit for our shareholders.
"We want the little guy to make some money."
The companies intend targeting discerning and overseas consumers with higher-priced extra virgin oil that compares well with top Italian products.
Olive Services will press, store, bottle and label olive oil, and Nelson Olives will market and sell the product. Shareholders are unlikely to get a dividend from Nelson Olives until 2004 and it will be a few years before the processing business turns a profit, Mr Cuthbertson said.
The semi-retired, international education specialist said he had also been seduced into olive growing by the feel-good factor, but was quick to point out that olives were not yet a proven, sustainable business in New Zealand.
Olive oil production in the region is expected to double this year and double again next year.
More than 50,000 olive trees are in the ground and in three to four years their production will be impressive.
Nelson Olives is already working with Trade New Zealand to find markets.
Small growers faced two fundamental problems, said Mr Cuthbertson.
Hardy olive trees would grow almost anywhere, but getting consistent quality was another matter, because certain weather conditions were required at particular times.
And production costs were "terribly high."
Olive Services will be managed by retired shipping businessman Tony Johnston, and former Wall Street investment banker John Taylor will head Nelson Olives.
- NZPA
