$30M to build orchards on Maori land

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.