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Friday 03 December 2021

T&G strikes Super Fund deal for Envy investment

23rd November 2021 By Staff Reporter | | @foodtickernz

T&G Global has struck a deal to sell three orchards to the New Zealand Superannuation Fund to free up capital as it looks to invest in its Envy apple brand.

T&G Global wants more capital to drive Envy exports.

The diversified agribusiness has formed a partnership with the super fund’s rural investment manager, FarmRight, which sees it sell 40 hectares of Hawke’s Bay land comprising its Rosewood, Taylor and Trotter orchards.

The value of the deal was not disclosed but it included T&G being contracted back to provide orchard services and all post-harvest, export and marketing services.

T&G chief executive Gareth Edgecombe says the NZ Super Fund tie-up enables T&G to increase supply of Envy apples to help meet growing global demand.

It comes amid a rough pandemic for the listed company, which warned in October that profit for the 2021 financial year would come in between $4m–$10m, a potential contraction of as much as 76% from the $16.6m profit it posted in 2020.

The deal also follows an $80m sale and leaseback of a Hastings post-harvest operation to Property for Industry Limited completed earlier this month – again to free up capital to invest in its core business, as well as new growth activities for its Envy and Jazz apple brands.

“Global consumer demand for Envy is projected to increase five-fold by 2030, which means we need to source an additional 10 million tray carton equivalents (TCEs) globally to meet the forecast 25 million TCEs that will be needed by then,” Edgecombe said.

“With the NZ Super Fund’s focus, through its manager FarmRight, on creating long term value by generating returns off the land, we can apply our world-class orcharding services and our global supply chain, marketing and sales expertise to deliver incredible apples to consumers, as well as strong grower returns.”

Edgecombe added that Envy’s strong consumer preference, combined with the strength of the brand and its superior orcharding qualities, means growers have the potential to make an attractive return on investment, once their orchards reached full maturity.

FarmRight chief executive, Jim Lee, called Envy a “high-quality apple” with big potential, especially in China, Vietnam, Thailand and USA.

“This global demand, combined with a strong track record of returns, makes it a solid investment,” Lee said.

“We’re really pleased to be partnering with the T&G team to help grow the brand, with the returns ultimately assisting the government meet the future cost of New Zealand’s superannuation.”

The transaction was settled on 19 November 2021.



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