Opotiki Packing shareholders approve $4.85m capital raising

Opotiki Packing and Coolstorage shareholders have approved a capital raising plan that includes the Maori Trustee, Te Tumu Paeroa, and Bay of Plenty Regional Council's investment arm each taking a 10.1 percent stake in the kiwifruit packing business.

The Opotoki-based company, which services kiwifruit growers in the Eastern Bay of Plenty and Gisborne regions, is raising $4.85 million selling shares to existing shareholders and suppliers, Te Tumu Paeroa, and the council's Quayside Holdings, which also owns 54 percent of Port of Tauranga.

Opotiki Packing is preparing for "significant growth" in kiwifruit processing volume in the next four years from its existing suppliers, as production recovers from the impact of the vine-wasting disease Psa between 2012 and 2014. This year it began a capital investment programme that includes a new packing line and cool storage facilities at its Opotiki site.

Te Tumu Paeroa provides services to Māori landowners and manages 100,000 hectares of Māori land across New Zealand, including about 5,000 ha in the Eastern Bay of Plenty.

"We want to convert other land into high-value and high-performing kiwifruit ventures," said Jamie Tuuta, chief executive of the Maori Trustee. "Being part of the wider supply chain provides better opportunities to support that."

Te Tumu Paeroa was interested in working with Opotiki Packing "to provide further opportunities for land development in the region and for young people to be part of this industry," Tuuta said.

Opotiki Packing had 40 existing shareholder allocations, with the largest at 11.6 percent and a total of about 3.5 million shares on issue.

The company provides services to 700 canopy hectares of kiwifruit orchards, and processed more than 5.5 million trays of kiwifruit in 2015. It says the recovery from Psa is being driven by increased volumes of Zespri SunGold variety fruit, which is more tolerant of the disease.

Zespri has forecast a compound annual growth rate for volume in the industry of 6.4 percent a year for the five years through until the 2019/20 season.

The Bay of Plenty produces about 80 percent of New Zealand's kiwifruit.

(BusinessDesk)