Apple-y ever after: Aussie fruit growers in tie-up
It seems Costa isn’t the only deal going down in the agribusiness sector. Two fruit companies are set to become one as the pair tackle rising costs and seeks to grow operations, Street Talk can reveal.
The NSW arm of farming and fresh produce marketing business Red Rich Fruits has entered into a binding term-sheet agreement with apple grower Batlow Fruit and its majority owner Ausfarm Fresh Horticulture to form one of Australia’s largest apple, mango and mandarin businesses.
Achieving critical mass and economies of scale is what’s driving the tie-up as management looks for cost efficiencies across its four verticals – apples, mangos, citrus and trading – such as sharing resources across the supply chain and juicing its buying power with fertiliser and packaging manufacturers.
Red Rich Fruits director Matthew Palise.
It will also allow the entities to blend management, marketing and sales resources, though it’s understood staffing numbers won’t be affected.
“We’re a smaller farming company with a large trading entity,” Red Rich Fruits director Matthew Palise told Street Talk. “They’re a larger farming company with a small trading side. So together, it gives us a well-balanced portfolio to be able to expand and take on opportunities into the future.”
Revenue for the combined group is expected to fall between $150 million and $200 million in the first year. The deal will combine $60 million of assets. The new entity will be a large holder of land in Batlow and Stanthorpe and will grow a range of varieties including Pink Lady, Royal Gala, Granny Smith and Red Fuji. Kensington Pride mangos will be grown in the Northern Territory and mandarins in Queensland.
The union comes as the industry battles rising input costs –
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