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Tuesday, April 25, 2017

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$30M to build orchards on Maori land

Posted at 10:00am Thursday 20 Apr, 2017

Te Tumu Paeroa, in partnership with Quayside Holdings, today announces a $30 million investment programme to build 10 kiwifruit orchards on Maori land in the Bay of Plenty and Gisborne over the next 18 months. 

This will be the single largest kiwifruit investment ever made on Maori land.

More than 90 hectares of semi- and unproductive land will be converted into successful grower businesses for the long-term benefit of owners and their community. 

Te Tumu Paeroa has developed a unique model to establish new enterprises on Maori land. The model allows full ownership of the orchards to transfer to land owners in an estimated 12 – 17 years, after achieving a targeted rate of return on capital invested. In the interim, the land will be leased and Te Tumu Paeroa will build and operate the high-performing businesses, carrying the financial risk.

“Our programme allows land owners to participate in developing a successful kiwifruit orchard on their land and see the ownership of the business transfer to them by 2030, creating a legacy for generations to come,” says Jamie Tuuta, Maori Trustee and Chief Executive Officer of Te Tumu Paeroa. 

“A core part of our programme is building the capability of land owners to successfully govern the business when it comes time to transfer ownership to them. We want to see Maori land owners involved in the whole process — developing skills and hands-on experience in running kiwifruit orchards on the ground as well as in the boardroom.” 

The signing of the agreement.

By 2030, based on today’s return, the orchards are expected to generate over $80,000 per hectare per annum or $7.1m by growing a mixture of premium gold kiwifruit and traditional green kiwifruit.

In the 2015/16 season the average return for green kiwifruit was a record $56,673 per hectare. 

“It’s difficult for Maori land owners to develop businesses on their land unless they have access to capital from other means, because many don’t want to use the land as security on a loan.

"As a result, owners usually contract out the land to businesses who do have access to capital and can reap the financial rewards for taking the entrepreneurial risk. Maori land owners are missing out. Our programme addresses that, putting businesses in the hands of land owners.” 

Te Tumu Paeroa has successfully piloted the approach, building two new orchards in the Bay of Plenty over the past three years.

Nine hectares of kiwifruit vines were planted in 2016 and the first fruit will be harvested from the orchards next year.

The properties are managed by professional kiwifruit management companies Southern Cross Horticulture and OPAC. 

“The benefits of this programme are more than just financial. It will enable owners to reconnect with their whenua and support them to achieve their long-term aspirations for their land.”

For example, as part of the redevelopment of their land and the building of the orchard, owners of Whai Orchards, established on Te Uretureture, Matakana, have set up a Maori reservation to restore historic pa sites and established an Urupa (cemetery). 

“Kiwifruit is a thriving industry with a very positive, long-term growth projectory. It’s also a fruit for which growers can delegate the services for production and marketing to others, which is critical for owners who are not kiwifruit growers already.” 

Planting on Matakana Island.

Te Tumu Paeroa has identified 10 blocks of land in the Bay of Plenty and Gisborne, which have the characteristics that would make it a successful kiwifruit orchard, including a suitable climate, high quality soils, flat land and access to water and supporting services. 

Te Tumu Paeroa is currently engaging with trustees and land owners to ensure they have the knowledge needed to make an informed decision about participating in the programme.

“We expect to be able to name the land blocks in a few months’ time when building is set to begin.” 

Te Tumu Paeroa is an independent, professional trustee organisation providing services to Maori land owners. It manages 100,000 hectares of Maori land, 2000 trusts, and over $100m in client funds on behalf of 85,000 owners. Its vision is to support owners to use their land to its fullest potential – creating a legacy for this generation and the generations that follow. 

Quayside Holdingsis the investment arm of the Bay of Plenty Regional Council established in 1991.

It is, via a subsidiary, the majority shareholder of the Port of Tauranga Limited and an issuer of securities on the New Zealand Exchange.

Quayside has a diversified investment portfolio which includes property, shares and kiwifruit orchards.

Quayside continues to seek new regional opportunities for investment with which to further diversify its income base.

 

 


COMMENTS

Papamoaner,

Posted on 24-04-2017 09:58 | By R. Bell

In 2015 the investments made by Quayside Holdings (Port of TGA,) mainly, but many others, returned a rate saving per ratepayer of $130. Your right about councils world wide, much more enlightened an d professional. Robin Bell.
Councils invest

Posted on 23-04-2017 14:54 | By Papamoaner

I see whakatane council have just bought a motor camp. Profits from that will help to reduce rates. This is quite common in other countries these days too. Creating an investment arm like Quayside seems to me to be a safer way for councils to invest. I haven’t checked, but from memory there is a company down south called Watercare that is owned by a council or councils. Also, A large shareholder in Wellington airport is the WCC - a big investment that keeps rates down by making substantial profits.
The Maori connection,

Posted on 23-04-2017 11:28 | By R. Bell

is behind roadkills false claim that the D.F.Cs demise was caused by significant Maori land involvement. The D.F.C demise was primarily caused by highly risky investment in property development in urban areas. Mconnel Dowell, Richmond Smart Group, Pacer Kerridge, etc. Over investment in Deer, Goats Etc. Maori involvement was minimal. The investment by Quayside Holdings in this JOINT venture, is well within risk management parameters. Robin Bell.
Roadkill is jumping the gun

Posted on 22-04-2017 18:30 | By Papamoaner

He mentions core business and mandate. Both are encumbant upon Quayside. to perform good investments for the shareholders (the regional council).We have yet to see if that has been achieved because it’s early days. If the investment yields a good return, some individuals might have to eat humble pie. Let’s wait and see before going off half cocked.
@ Papamoaner

Posted on 22-04-2017 11:47 | By Roadkill

Off he mark on that one, there is no way a compnay100% owned by BRC has a mandate to plant money into a no core activity, non infrastructure and no security. To be clear here one of the significant reasons that DFC went broke was because loans on tribal lands were not repaid and the lands could not be sold. Get the picture ... this is way off the radar and completely stupid fiscally. Where is the good part?
@Murray Guy

Posted on 21-04-2017 19:23 | By Papamoaner

But it’s not ratepayers money now Murray. Quayside is the regional council’s investment arm. Any gains from the investment will become ratepayer’s money again. (back to shareholders). Similarly losses. If "ratepayers money" was directly used to fund this project, as people on here erroneously seem to think, then it would be a grant, not an investment. Quayside are simply carrying out their core business and have presumably done due diligence. Looks pretty good to me mate.
This money belongs to and is invested on behalf of the BOPRC Ratepayer

Posted on 20-04-2017 21:30 | By Murray.Guy

This money belongs to, is invested on behalf of the BOPRC Ratepayer, well the ’belongs to’ is correct! We’re not privy to critical information such as the projected return on our investment, associated risks so it’s impossible to make an informed response. $30 million is a serious dollop of our ’cash’ BUT I’d rather it be used to actually enhance the long-term prospects of Maori land than invested in a local museum or similar as some are advocating. This is money that could be used to reduce the rating requirement. Be under no illusion, the Bay of Plenty Regional Council ratepayers, mum & dad home owners, are the investors (providing the subsidy). Begs the question, the purpose of the BOPRC, it’s core functions, the purposes to which it’s income can be used (regardless of the original source of that income).
@ Papamoaner

Posted on 20-04-2017 21:03 | By Roadkill

You need help, any one investing money in BRC is a lender or bank, the money that BRC has is generally speaking "Rates" or the results of previous spends from rates or taxation of some form. So then these funds are public monies, no question! What is amazing is that this scheme is even happening.
ASSUMING

Posted on 20-04-2017 20:11 | By waiknot

That a suitable financial return for the risk taken is achieved, I like the idea. If the regional councils support makes more land in the region productive, provides more employment and increased productivity in the region. It has to be a win.
Papamoaner

Posted on 20-04-2017 18:20 | By NZer

How many regional councils do you know of that are funded by investors? Councils are funded by ratepayers mate.....
@ Fonzie

Posted on 20-04-2017 17:13 | By Papamoaner

My impression is that the money comes from investors, not public money of any sort.
This on the face of it looks like a win win

Posted on 20-04-2017 14:44 | By Fonzie

But is it ? Public funds of the Regional council are being put up on a commercial venture as an unsecured loan which is probably why normal lending institutions wont touch it. Is this the function of BoP regional council ? Where are the safeguards for this public money and what are the real risks and returns to our assets ? Would they do this with other landowners ? So many questions
Good luck to all

Posted on 20-04-2017 13:09 | By R. Bell

concerned. The future is bright indeed.

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