ZESPRI’s final shipments of New Zealand Kiwifruit have now been completed, signalling the end of a successful export season for the New Zealand Kiwifruit industry.

ZESPRI General Manager Supply Chain, Sally Gardiner, said that the New Zealand Kiwifruit industry has exported 99.8 million trays of ZESPRI® Kiwifruit (approximately 3.3 billion single pieces of kiwifruit) using 59 charter vessels and 5,616 containers this season. In the December Forecast grower returns are set to increase by NZ$46.8 million to $825.8 million, when compared with last year. “This is a strong result in a very challenging economic environment,” said Sally.

“ZESPRI growers have delivered fruit to meet the premium quality requirements of our international customers, and our post-harvest partners have reacted flexibly in an ever-changing market environment to ensure that fruit is delivered on time, in full, and to specification (DIFOTIS). In fact, this year is the first time ever that our suppliers have exceeded targets set for delivery, achieving DIFOTIS targets of 90 percent or better.”

The Hamburg Sud vessel ‘Cap Manuel’ departed the Port of Tauranga, bound for China, on Thursday 3 December 2009 with the final container shipments of New Zealand ZESPRI® Kiwifruit on board for the 2009 Season. The vessel is scheduled to arrive at the Shanghai and Nansha ports this week.

ZESPRI Shipping Manager, Mike Knowles, commented that this year has seen a unified effort by the industry. “This year we started the shipping season earlier than ever before with a week 12 (22 March) shipment of ZESPRI® GOLD Kiwifruit to Japan. We then managed to secure our largest ever below-deck shipment of ZESPRI® Kiwifruit aboard the Sunbelt Spirit carcarrier in April and loading records were broken at the Port of Tauranga in July. It’s a credit to the whole industry that it has been able to supply such a high volume of export quality fruit again this season,’’ he said.

Sally Gardiner said all New Zealand ZESPRI® Kiwifruit had been shipped and 97 percent has been sold across all varieties and markets. As the New Zealand selling season draws to a close, ZESPRI has recently commenced its Northern Hemisphere selling programme which will run through until March 2010.

ZESPRI General Manager Global Supply, Simon Limmer, said: “ZESPRI is now focused on selling high quality ZESPRI® GOLD and GREEN Kiwifruit grown in the Northern hemisphere, which further strengthens the ZESPRI® Brand and helps secure retail shelf-space for 12 months of the year with key customers in Europe, Japan and East Asia.”

In Europe, around 2.2 million trays of ZESPRI® GOLD Kiwifruit are expected from Italy for allocation in Europe and an additional 1.2 million trays to Asia. This volume represents a 2 percent increase on last year’s production volume. Approximately 138,000 trays of ZESPRI® GOLD Kiwifruit are expected to be procured from France this season which is an increase of more than 100 percent on last year’s 67,000 trays. In addition, approximately 4.5 million trays of ZESPRI® GREEN Kiwifruit, sourced to ZESPRI’s quality standards, will be available from Italy and France.

In Asia, 600,000 trays of ZESPRI® GOLD Class 1 Kiwifruit are expected to be procured from Korea, and approximately 490,000 trays of ZESPRI® GOLD Kiwifruit are expected from Japan.

The duration of the Northern Hemisphere supply season is from harvest and packing in late October to end of November/early December, through to the end of the sales season in early 2010.

December Forecast Holds Steady

The latest New Zealand industry forecast depicts a $46.8 million (or $0.50 per tray) increase in fruit and service payments to growers, when compared with the 2008/09 season, with minimal change from the forecast released in October. This represents a solid forecast in a selling season categorised by uncertainty and financial pressure, and can be attributed to a collaborative industry effort to maintain quality and delivery standards, and a strong in-market advertising and promotional effort.

The particularly strong result for ZESPRI® GOLD Kiwifruit reflects the strong market pricing due to demand exceeding supply, and positive impacts from the Yen/Kiwi exchange rate, given a high portion of the GOLD crop is sold in Japan.

ZESPRI considers the 2025 Productivity Taskforce recommendation to remove the kiwifruit regulations as completely unacceptable. ZESPRI Chairman John Loughlin said the recommendation would lead to a significant productivity drop and a reduction in New Zealand’s export earnings.

“In the last 10 years, the New Zealand kiwifruit industry has doubled in size and value, significantly contributing to the New Zealand economy and delivering wealth to New Zealand kiwifruit growers,” said Mr Loughlin.

Worth over $987 million in export earnings in 2009, and set to reach over $2 billion by 2020, the kiwifruit industry will continue to play a significant role in achieving Horticulture New Zealand’s export earnings target of $10 billion by 2020.

“A change in the industry structure would prevent the realisation of these growth targets and would be a backwards step for the country. New Zealand growers realise the value of our industry structure every single day – growers do not trade in economic theory, they deal in economic reality.”

“The success of the New Zealand Kiwifruit industry is the envy of other primary producers. Deregulation would promote price competition amongst New Zealand exporters which would lead to a drop in export earnings with many orchardists forced to exit the industry – this is not a viable strategy for productivity growth. An example close to home is the apple industry which was deregulated in 2001 - its export earnings have stagnated, remaining at similar levels to 2001 ($339m).”




















Mr Loughlin says the structure of the kiwifruit industry is critical to the continued success of the industry and the horticulture sector. The regulated structure puts ZESPRI as the primary exporter to countries other than Australia. Other companies can export kiwifruit through Collaborative Marketing arrangements, which are independently approved by industry regulator Kiwifruit New Zealand.

The New Zealand Government has clearly stated its position that it will support ZESPRI and the regulated industry structure for as long as they have the support of growers. Deregulation is therefore not on the agenda. “Growers will appreciate the level of confidence this provides for continued investment in orchard productivity, research and innovation, and export market development,” said Mr Loughlin.

ZESPRI International Limited says it is focused on ensuring a successful finish to the New Zealand Kiwifruit selling season, and will not become publicly engaged in the detail of trade policy issues reported in the domestic media this week.

A spokeswoman for ZESPRI, Carol Ward, confirmed that earlier this year unsolicited information had come to the company’s attention which suggested efforts were underway to compromise the New Zealand Government’s trade policy.

“ZESPRI was concerned that the activities that had come to our attention were unhelpful to New Zealand’s national interest and international relations and the Minister has confirmed that. As he has said, it appears that Turners & Growers, having failed to convince New Zealand Kiwifruit growers or the New Zealand Government of the merits of its case, has now turned to seeking to work with foreign governments,” Ms Ward said.

“ZESPRI is grateful for the Minister’s assistance and for his public reconfirmation of the New Zealand Government’s policy that it will support ZESPRI and our SPE marketing arrangements for as long as they have the support of growers. Given the commercial and diplomatic sensitivities of these matters, it is not appropriate for us to provide more detailed public comment.”

At last week’s AGM for the New Zealand Institute of Chartered Accountants, held in Wellington, Mr John Loughlin received the prestigious honour of Fellowship of the New Zealand Institute of Chartered Accountants.

As one of only 24 Members to be conferred a Fellowship this year, John Loughlin of the Hawke’s Bay Branch of the Institute has a long list of achievements to his name.

As Chairman of ZESPRI Group Limited since 2008 and an Independent Director since 2002, John has brought significant value to ZESPRI

“John has been involved with ZESPRI for over seven years and has played a pivotal role in directing the organisation’s growth and success over this period,” said Mr Lain Jager, ZESPRI CEO.

“We are delighted that John has been honoured by the Institute for his achievements and contributions and we are extremely proud to have a person of this calibre as our Chairman,” added Mr Jager.

John’s professional advice and sound judgment has been sought after by many other organisations. John also holds the position of Chairman with Allied Farmers Limited, Allied Nationwide Finance Limited and Tru-Test Corporation Limited. John is a Director of Metlifecare Limited, Port of Napier Limited, Kermadec Property Fund Limited, Taupo Motorsport Park Limited, and Centralines Limited. He is a former Issuer Appointee to NZ Markets Disciplinary Tribunal. 

As well as contributing to the success of many New Zealand businesses over the course of his career, John and his wife have spent the last 16 years developing a vineyard and the award-winning Askerne winery business in Hawke's Bay.

Fellowships from the New Zealand Institute of Chartered Accountants are a high level award, conferred on members who demonstrate excellence and achievement in their field, bringing distinction to the accounting profession and promoting the core values of quality, integrity and expertise.

Members are nominated by their peers in a strictly confidential process and the decision of the Council is handed down at the AGM each year.

At the 2009 AGM, 24 Institute members from New Zealand, Australia and the United Kingdom were recognised for their valued contribution to the accounting profession and honoured with Fellowships.

The New Zealand Institute of Chartered Accountants represents over 32,000 members both in New Zealand and around the world. 

Information about the New Zealand Institute of Chartered Accountants can be found at www.nzica.com/AM/Template.cfm?Section=Home1

The Hon Dr Wayne Mapp, Minister of Research Science and Technology, has announced a $35.7 million dollar investment into a seven-year ZESPRI / Plant & Food Research programme to develop new kiwifruit varieties.

The Foundation for Research, Science and Technology will contribute $15.2 million to the programme with ZESPRI contributing $20.5 million. Plant & Food Research will partner with ZESPRI and the Foundation to form the world’s largest and most significant research and development (R&D) programme into new kiwifruit varieties.

The investment in this consortium demonstrates the government’s commitment to the horticulture sector and to achieving targets for growing New Zealand’s export earnings from horticulture.

The horticulture sector aims to double the value of its earnings to $10 billion per annum by 2020.

“By investing in the most rigorous and exacting kiwifruit R&D programme, we can ensure that new generations of New Zealand Kiwifruit are the best in the world and that their commercial success delivers value and export earnings to New Zealand and New Zealand growers,” said Mr Lain Jager, CEO ZESPRI.

Foundation Chief Executive Murray Bain says the size of the investment is consistent with the importance of the kiwifruit industry to New Zealand.

“We have world leading breeding expertise at Plant & Food Research being matched with ZESPRI’s track record of success with ZESPRI® GOLD Kiwifruit. This long term funding provides a strong platform to produce new cultivars that will be significant export earners for New Zealand.”

The injection of $35.7 million over seven years will enable ZESPRI and Plant & Food Research to significantly up-scale their joint kiwifruit breeding programme.

“By investing in a proven partnership, we are able to make a step increase in the number of new cultivars developed in the breeding programme and introduce cutting edge plant breeding, screening and evaluation technologies to gain greater efficiencies and reduce the time to market,” said Mr Bruce Campbell, COO Plant & Food Research.

ZESPRI® GOLD Kiwifruit, a product of the existing breeding programme, currently worth over $468 million in global revenues annually, is an industry success story and a benchmark for all new cultivar R&D.

The research programme will target development of new varieties differentiated by their appearance, sensory or health attributes.

“As we fill the research pipeline and bring a number of new cultivars to the market, it is realistic to expect that within the term of this consortium, one outstanding cultivar will emerge and be commercially released with forecast sales of NZ$300 million,” said Mr Jager.

By integrating the investment in R&D with a defined and successful pathway to market, New Zealand Kiwifruit growers will benefit from the efficiencies of an integrated industry structure.

Following the signing of the Free Trade Agreement between New Zealand and Malaysia, ZESPRI is attributing much of the New Zealand Kiwifruit industry’s success in Malaysia to collaborative marketing programmes between New Zealand exporters.

Under the Kiwifruit Export Regulations 1999, any person or company can undertake collaborative marketing with ZESPRI, if approved to do so by industry regulator Kiwifruit New Zealand.

ZESPRI Director of Corporate and Grower Services, Carol Ward, said that collaborative marketing programmes helped develop Malaysia as a market 10 years ago and today almost half of New Zealand Kiwifruit sales into Malaysia were through collaborative marketing programmes.

“Forty-six percent of the industry’s total Malaysian sales of 822,000 trays are sold through collaborative marketing programmes,” said Ms Ward. “In addition, 30 percent of Indonesian sales, and 100 percent of sales into the Philippines are through collaborative marketing programmes.”

“For the Malaysia market, there are three exporters of New Zealand Kiwifruit – ZESPRI, Te Awanui HukaPak and Fruitlynx Marketing Limited. They work in collaboration on budgets, forecasting, performance reporting, logistics and customer relations.”

Tracey Burns, Export Manager, from fresh produce company Fruitlynx Marketing Limited, part of Freshmax NZ, said: “We work alongside ZESPRI and HukaPak, who are all focused on boosting kiwifruit sales in that part of the world and cooperating for the good of New Zealand Kiwifruit growers.

“Our Malaysian distributor was importing quite a lot of Chilean kiwifruit as part of their substantial fruit import business, but a few years ago we identified an opportunity to boost the category with a premium kiwifruit offering, supported by high quality advertising and promotion of ZESPRI-branded kiwifruit. As a result of gaining retailer support, our volumes have increased significantly – with our GREEN sales growing by 44 percent this past year.”

With the FTA signed, ZESPRI is planning to add to its team of local distributors and marketing agencies by appointing a fulltime local ZESPRI Marketing Manager to step up its programme to educate Malaysians about the nutritional goodness of ZESPRI® Kiwifruit.

Sir Brian Elwood, Chairman of Kiwifruit New Zealand (KNZ), the regulating body responsible for administering the Kiwifruit Export Regulations 1999 and approving collaborative marketing programmes, said in a recent letter to growers that: “KNZ must be satisfied that growers will be ‘better off’ as a result of a collaborative marketing arrangement which it approves.”

“There are currently 12 exporters of New Zealand-grown kiwifruit to countries other than Australia (about 20 if Australia is included). Historically, about 80 percent of all collaborative marketing applications are approved by Kiwifruit New Zealand as meeting the regulatory requirements.”

Kuala Lumpur, Malaysia: ZESPRI, the world’s largest marketer of Kiwifruit, today welcomed the signing of the Free Trade Agreement between New Zealand and Malaysia.

Speaking from the FTA signing in Kuala Lumpur, ZESPRI CEO, Lain Jager, said Malaysia had grown to be one of the company’s most important markets in South East Asia, with an annual turnover of $8 million.

“Kiwifruit is New Zealand’s 7th largest export to Malaysia and today’s FTA signing is an exciting step towards strengthening NZ-Malaysia trade opportunities for ZESPRI and for New Zealand.

“Malaysia presents significant future growth opportunities for our industry and we already have plans to boost our staff presence here to help educate Malaysian consumers about the nutritional benefits of ZESPRI® Kiwifruit. The elimination of the 15 percent tariff paid on kiwifruit from 2010 makes this market even more attractive. I congratulate the New Zealand Government for securing such a positive outcome for our industry.”

Innovative trade and consumer marketing to a growing population of health conscious Malaysians has helped grow ZESPRI® Kiwifruit volumes in Malaysia in 2007, 2008 and 2009.

“Sales have grown over 80 percent in the past two years and next year we’re aiming to sell over 1,000,000 trays through our strong local distribution partners. ZESPRI® Kiwifruit are now available throughout the country in large supermarket chains such as Giant, TESCO, JUSCO and Carrefour.”

Mr Jager said kiwifruit consumption is relatively low in Malaysia, as it is not grown locally and therefore has not traditionally been part of the diet. “ZESPRI® GREEN Kiwifruit is still preferred but Malaysians are starting to get to know the sweeter taste of ZESPRI® GOLD Kiwifruit with sales up over 100 percent in 2009. As the specific nutritional benefits become more widely known, we anticipate further double digit sales growth.”

Following his visit to Kuala Lumpur, Lain will be speaking at the second Japan New Zealand Partnership Forum in Tokyo, which will bring together senior Japanese and New Zealand government officials and business leaders.

The announcement of a Free Trade Agreement with Malaysia follows the signing earlier this year of an FTA between the South East Asian Nations, Australia and New Zealand (AANZFTA). Tariff reductions resulting from that agreement will also help ZESPRI’s growth plans for Indonesia, Vietnam and the Philippines.

In its latest industry forecast, ZESPRI has announced a $48 million increase in payments to growers, compared with last season, despite a challenging market.

The company anticipates that final payments will be $827 million ($8.06 per tray), compared with $779 million ($7.59 per tray) last year. This is an increase of $22.3 million (or $0.08 per tray) over the forecast released in August, and represents an increase in payments for GREEN and GOLD Kiwifruit, with no change for GREEN ORGANIC.

Chief Executive Lain Jager says the forecast reflects positive impacts from reduced costs (particularly fuel) and improved foreign exchange movements compared with last season, which have helped offset the pricing impacts of a tough sales environment on GREEN and GREEN ORGANIC.

“It’s important to note that this is only a forecast and we have a way to go in most markets. At this stage GREEN pricing and sales volumes are tracking as expected as we work our way to a positive close for the GREEN season, and this has allowed us to marginally lift per-tray and per-hectare returns for GREEN growers in this latest forecast. At $6.91 the return is $0.07 down on last year but on a positive note for growers, good fruit quality with lower onshore fruit loss and fruit handling costs, have resulted in an extra 19 cents compared with the August forecast, for growers at Orchard Gate Return level. This delivers average forecast Orchard Gate Returns (net of post-harvest costs) of $29,033 per hectare, or about $1,000 down compared with last year.

The world fruit market has been severely impacted by the global recession this year with many produce growers globally experiencing much lower returns than in previous seasons. “The relative stability of ZESPRI’s result in this environment can be attributed to a number of factors, including a strong marketing campaign focused on health, vitality and nutrition; a weaker New Zealand dollar against ZESPRI’s key trading currencies; and an outstanding performance by growers and post-harvest operators to deliver shipments in specification and on time.”

The integrated industry structure enabled the industry to proactively manage supply with commercial decisions taken early by ZESPRI and growers regarding the size profile and volume of GREEN Kiwifruit. “We asked growers to thin their fruit in order to optimize the size profile and we worked with growers to leave some lower quality crops on the vine at the start of the season,” said Lain. “The crop management early in the season was about optimising market allocations and grower returns and those who know our industry and fruit business understand that. It’s about allocating and phasing fruit supply to genuinely meet demand requirements and optimising fruit quality for both the trade and consumers.”

“This year has been about reacting flexibly and commercially in a difficult and dynamic market and we needed to reduce volumes and reduce price in some markets to sell through the crop in an orderly manner. Our strategy was to start strongly in all markets and align pricing appropriately to ensure that our high quality offering was perceived as being good value in a year of uncertainty and financial pressure for consumers.”

For GREEN ORGANIC, per-tray returns are forecast to be down by 5 percent from last year to $8.81 per tray, with no change from the August Forecast. “GREEN ORGANIC growers are feeling the impacts of the global recession more than our other categories,” said Lain. “This demonstrates a short-term shift by less-frequent organic consumers towards conventional products at cheaper pricing.”

“It is important to note that this positive market performance does not take away from the fact that GREEN returns have not been where they need to be over recent seasons and this year has been another challenging season.”

Lain Jager will discuss the 3-year outlook for each category with growers at meetings being held throughout the country in November. “Despite the challenges of an increasing world supply of Hayward, we see some real opportunities for the GREEN business over the next three years.”

The GOLD forecast is a completely different story to GREEN and reflects the returns possible from a new cultivar for which ZESPRI holds the Plant Variety Rights. GOLD Fruit and Service Payments are set to be $11.99 per tray, compared with $9.70 last season.

“This is an extraordinary result in a challenging year,” said Lain. “It reflects the superb quality of the fruit, and the fact that we’re seeing strong repurchase patterns by consumers as they begin to prefer GOLD to other fruits. This year, demand exceeded supply which led to strong market pricing and an early close to the season. The forecast return is also reflective of the positive Yen/Kiwi exchange, given a high portion of the GOLD crop is sold in Japan.

Chairman John Loughlin said: “While the year is not done yet, the October forecast represents a satisfactory result in a year where many fruit growers around the world have been devastated by a difficult market, supply and demand imbalances, and weak selling.”

Over 200 students, teachers and community group representatives were entertained this
month by local singer / songwriter, Luke Thompson, as the 2009 ZESPRI® YouthBank
Ambassador.

The ZESPRI® YouthBank awards ceremonies, held in Tauranga and Ohope this month,
provided the students with the opportunity to present funding to their chosen recipients
while being rewarded for their participation in the programme with inspirational words
from the ambassador.

Luke delivered a heartfelt speech about the importance of being able to give a little back
in any way you can. “Your riches in life will come from your friends, family and
experiences, not from your possessions,” he said. Luke appealed to the students to
follow their dreams and ideas and to think about what they really want to do as they
come to the end of their school years and enter a new phase in their lives. Luke also
rewarded the students with a sneak preview of songs from his new album and a
collection of his older songs.

One student, Amy Taylor from Mount Maunganui College, commented that she had
learned so much from the programme such as team work, speech writing and public
speaking. “I also learned that even the smallest gestures of giving can make the world of
difference to those in need. It was really cool that we got to meet and have photos with
Luke – he is a good singer and his music is fun.”

ZESPRI® YouthBank is a community sponsorship scheme where 12 Bay of Plenty
secondary schools receive $2,000 each to allocate to non-profit youth-related projects in
their community. With a maximum grant allowable of $500 per recipient, the students
take responsibility for promoting the scheme, assessing each application against criteria
they’ve developed and selecting the successful recipients.

This year’s recipients took the opportunity to thank Luke, ZESPRI and organisers New
Zeal Foundation for being involved in a programme that really makes a difference in
their communities and outlined what they would use the money for.

ZESPRI’s Director of Corporate and Grower Services, Carol Ward, spoke to students
about the importance of being aware of the communities around them and was moved
by the diversity of the organisations receiving funding. “It’s a tribute to the students.
They have obviously put a lot of thought into who their recipients will be with funding
provided to initiatives from school orchards, to clothes purchases for the children that
come through Women’s Refuge, to youth training in the Order of Saint Johns. It’s such
an honour to be involved in this programme and see our Bay of Plenty communities
benefit in so many ways.”

This year over 88 students were involved in ZESPRI® YouthBank, investing in their
communities by donating funds to 57 non-profit organisations. The secondary schools
involved were: Edgecumbe College, Trident High School, Whakatane High School,
Opotiki College, Te Puke High School, Aquinas College, Bethlehem College, Mount
Maunganui College, Otumoetai College, Tauranga Boys College, Tauranga Girls College
and Katikati College.

The schools worked closely throughout the year with programme administrators, New
Zeal Foundation, who developed the YouthBank concept in 2003. New Zeal’s Graham
Hare works with the student committees throughout the process, assisting with selection
criteria and ensuring that all recipients are registered charitable trusts.

“It was a fantastic sight to see the sense of accomplishment on the students’ faces and
the gratitude from recipients. All who are involved in the programme should feel very
proud of the achievements this year,” said Graham.

In a visit to the Bay of Plenty this week for a series of meetings with Tauranga MP Simon Bridges, Nikki Kaye MP for Auckland Central, took time out to visit the kiwifruit industry and meet with ZESPRI employees.

ZESPRI CEO Lain Jager welcomed Nikki and Simon, saying that he “was delighted to host them and is fully supportive of MPs getting closer to industry in order to fully understand the value that is delivered to New Zealand”. Lain was also encouraged by their support for ZESPRI and the industry structure. Simon Bridges reiterated his support for ZESPRI and the industry structure, informing the group that he had shared his personal views with Minister Carter and the Prime Minister.

During discussions with ZESPRI and NZKGI representatives, Simon and Nikki had the opportunity to learn more about the kiwifruit industry, which employs over 20,000 full time and seasonal workers, and contributes approximately 20% to the Bay of Plenty GDP. With over 100 million trays of ZESPRI® Kiwifruit shipped to international markets, ZESPRI’s focus is on high quality kiwifruit, innovation and consumer marketing, to enable premium returns to flow back to growers.

Nikki and Simon also took the opportunity to meet with local kiwifruit growers and to tour a packhouse.

Mahaki Ellis, Chairman of the Ngai Tukairangi Trust and Te Awanui Huka Pak Ltd., voiced his firm support of the SPE to Nikki and Simon, stating that “as a purely commercial operation that supports a large number of Maori workers, any change to the industry eats immediately into the bottom line and I certainly don’t want to see that happen”.

Mahaki explained to Nikki and Simon what business was like under a multi-exporter industry structure prior to the introduction of the SPE and spoke passionately of his concern that a return to those days would signal the demise of the industry and undermine all the hard work put into the orchards by growers.

Simon responded by saying that he understood that the power rests with the growers and that their voices needed to be heard loudly. He encouraged them to talk to other growers. Nikki and Simon both commented on the importance of the kiwifruit industry to the Bay of Plenty as well as to New Zealand as a whole, impressed by current achievements and the potential for the future.

During a short tour of the Te Awanui Huka Pak packhouse, Nikki and Simon were visibly impressed with the scale of the 24 hour operations, the volume of fruit that is moved in a day, employment numbers and the technology employed to grade the fruit.

Te Awanui Huka Pak is amongst the largest single site kiwifruit packhouse with a production potential of over 5 million trays.

The New Zealand Kiwifruit season has passed the half way mark and 100 percent of the ZESPRI® Kiwifruit crop has been picked and packed.

ZESPRI CEO Lain Jager describes this season as one of the most promising yet challenging years for kiwifruit. “ZESPRI® Kiwifruit are delicious this season and the quality of the fruit is well above last year. On the back of a strong and early start to the season we have achieved solid sales volumes in all markets to date. Although we have passed the significant half way mark in a strong position, there are still challenges ahead,” said Mr Jager.

“The economic environment will continue to affect consumer spending and we will need to work harder and smarter to ensure that ZESPRI® Kiwifruit continue to maintain strong sales as competing summer fruit volumes increase,” he added.

Shipping:

Of this year’s crop of ZESPRI® Kiwifruit, just over 65 percent has already been shipped to international markets and is being actively marketed at a retail level. Shipping volumes are 3 percent ahead of shipping volumes for the same time last year.

Export charter shipments of ZESPRI® GOLD Kiwifruit, which historically has an earlier season than ZESPRI® GREEN Kiwifruit, have completed. The final 1.3 million trays of export charter ZESPRI® GOLD Kiwifruit left the Port of Tauranga last week bound for Asian markets.

The Regulus, a Fresh Carriers Company vessel, departed the Port of Tauranga carrying the remaining export charter ZESPRI® GOLD Kiwifruit to Tokyo and Osaka in Japan and Pusan in Korea. It holds around 4,618 pallets of kiwifruit under deck and 36 40-foot containers (each containing 20 pallets) of kiwifruit on deck. The shipment is due to arrive in Tokyo on the 16th of August 2009.

Shipping of ZESPRI® GREEN Kiwifruit will continue through to November 2009, with ships departing on a regular basis for Asia and Europe.

To date, 18 Asian charter vessels, 23 European and 2 North American vessels have departed New Zealand carrying ZESPRI® Kiwifruit. Continual improvements in packing and loading have provided efficiencies and contribute to reduced overall shipping costs.

Fruit Quality:

The quality and taste of this season’s ZESPRI® GREEN and GOLD Kiwifruit is outstanding. The GOLD has a more intense sweetness and the GREEN tang is unmistakable. Superior fruit quality compared to competitor products allows ZESPRI to achieve price premiums for its kiwifruit in nearly all markets.

Marketing Activities:

In-market wholesale and retail sales of ZESPRI® GREEN and GOLD Kiwifruit has been buoyed by a strong ZESPRI® Brand presence in each market. Television advertising, print campaigns, outdoor displays, product sampling and in-store promotional activities are in full swing across Japan, Europe, East Asia, South East Asia and North America. Innovative consumer promotions and competitions continue to drive sales volumes over competitive products and incoming summer fruits.

NB: While all exporter charter shipments of ZESPRI® GOLD Kiwifruit are now complete, a small volume of ZESPRI® GOLD Kiwifruit trays has been allocated for sale and will be shipped in containers by the end of August.

The ZESPRI Annual General Meeting, held today in Tauranga, attracted over 500 grower shareholders and interested parties.

Grower shareholders came to listen to ZESPRI Directors and executive team members present the financial performance of the company over the past 12 months and to hear about how ZESPRI will maximise grower returns in the challenging year ahead.

Chairman John Loughlin and CEO Lain Jager presented the 2008/09 highlights in the context of the past 10 years of ZESPRI history. ZESPRI has successfully doubled the size of the market and the export earnings with a compound annual growth rate (CAGR) of 8%.

The 2008/09 season celebrated the record breaking production achievement of 100 million trays of New Zealand Kiwifruit and fruit and service payments to the industry of $800 million. A brilliant result for growers in the current economic climate. This translates directly into a final dividend payment for growers next month of 56 cents per share, which brings the full year dividend to 98.41 cents per share; up 22 percent on last year’s dividend and again represents 100 percent of available profits.

Highlights of the meeting included:

• Growers voiced their overwhelming support for the industry structure and its importance for the future. There was strong criticism of recent initiatives by 1% shareholder Turners & Growers, whose representative at the meeting declined an offer from the Chairman to speak; 
•  Industry and grower excitement about the ZESPRI and Plant & Food Research New Cultivar Breeding and Evaluation Programme and the allocation of trial sites across the NZ growing regions;
• An announcement regarding the expansion of the new cultivar breeding and evaluation programme, requiring an additional 13.5 ha across NZ. This follows promising results from orchard, supply chain and consumer trials of the four most advanced varieties under evaluation. Leading pre-commercial grower block trial sites have been selected and grafting of the budwood will now take place. This was received with much excitement and enthusiasm from growers; and
• A proposal to the industry that the net ZESPRI commission should be further reduced by approximately $10 million annually to around 7% of net sales. ZESPRI’s current commission as a percentage of net revenue is 7.7% of net sales and has reduced from approximately 11% in 1999. The proposal for a further reduction recognises the need to equitably share the superior returns earned from the industry’s structure between growers and shareholders.

One key agenda item was the election of Directors to the ZESPRI Board following the retirement, by rotation, of three Directors – Keith Thorpe, Tony de Farias and Graham Cathie. Keith Thorpe, a Director for the past six years and Graham Cathie, a Director for the past eight years, both advised that they would not be seeking re-election and officially completed their term at the AGM.

The following appointments have been confirmed:
Vacancy 1 - Ray Sharp
Vacancy 2 - Tony de Farias
Vacancy 3 - Tony Marks

The ZESPRI Chairman, John Loughlin, officially welcomes the Directors to the Board. “On behalf of the ZESPRI Board and executive team, we look forward to working together to progress a number of key initiatives including the ZESPRI new cultivar program and market expansion over the coming years,” said Mr Loughlin.

2009 AGM Chairman and CEO Speeches

One hundred percent of the New Zealand-grown ZESPRI® Kiwifruit crop has been picked and packed and over 50 percent has been shipped to overseas markets to date. The kiwifruit industry’s supply chain partners have pulled together by breaking records loading two vessels at unprecedented speed this month.

ZESPRI® Kiwifruit was loaded onto Seatrade-operated reefer vessel Hansa Lubeck, in 16.5 hours using an eight pallet lifting cage. Historically 24 hours has been the benchmark so this was an outstanding result and a remarkable achievement for the industry. The Fresh Carriers Corporation-operated Asian Brier, which loads only two pallets at a time, was loaded in 21.5 hours, a week later which is another record load.

Ian Mearns, General Manager of Tauranga Kiwifruit Logistics Limited, the company which coordinates the New Zealand ship loading operations, commented:

“This is an outstanding effort by the whole industry - the growers, coolstores, transport companies, stevedores and ZESPRI. I attribute this result to a number of things including, product availability, additional buffer store space at the Port of Tauranga and the stevedores’ general performance. Everyone seems to be energised and motivated to be working harder than ever-before which is great to see. We really rolled-up our sleeves and worked together to get the job done. It is a good example of all parties, irrespective of which company you represent, working together with a common focus.”

Sally Gardiner, ZESPRI Supply Chain General Manager, remarked that streamlining of some processes had contributed to a smooth operation this season. “Most notably we have enhanced shipping documentation, planning and order execution, data and process. These improvements ensure that the industry is ready and willing to constantly evolve where possible in order to deliver the fruit to the markets in full, on time and maximise returns for kiwifruit growers.”

The final shipment of ZESPRI® GOLD Kiwifruit is expected to leave the Port of Tauranga in the first week of August. As the season for ZESPRI® GREEN Kiwifruit is much longer, shipping continues for ZESPRI® GREEN Kiwifruit through to November. The final ZESPRI® GREEN Kiwifruit shipment has been scheduled to depart the Port of Tauranga mid-November, bound for Asia.

ZESPRI International Limited will this week review the NERA report on industry issues reported in media today.

Carol Ward, ZESPRI’s Director – Corporate and Grower Services, said the company would be interested to see what value, if any, it might offer in terms of improving the industry’s productivity, market penetration and presence, and profitability.

However, Ms Ward said the suggestion to deregulate the kiwifruit industry was not supported by growers, the post-harvest sector, the company’s international marketing experts or government, and was therefore not on the agenda.

She said ZESPRI would be happy for Turners & Growers Limited, who currently account for less than 1 percent of the industry, to develop additional collaborative marketing proposals if they could be shown to increase overall wealth to New Zealand generally and New Zealand Kiwifruit growers specifically.

Ms Ward said the collaborative marketing mechanism was already used successfully by Turners & Growers for its Pacific export operations and by around a dozen other companies. More than 70 percent of collaborative marketing applications are approved by the industry’s regulator and most were financially successful, she said.

Like any ZESPRI supplier and shareholder, Turners & Growers had a role to play in the kiwifruit industry, but a 1 percent player cannot expect to determine policy for the whole industry.

ZESPRI International Limited was awarded Best Logistics Strategy for China at last night’s New Zealand China Trade Association (NZCTA) award ceremony.

The Best Logistics Strategy for China Award was hotly contested and the calibre of finalists was high.

Accepting the award on behalf of all New Zealand Kiwifruit growers, ZESPRI Director Corporate and Grower Services Carol Ward, acknowledged the important role that China makes to ZESPRI’s current and future growth strategy.

“These awards recognise the value of trade partnerships with China and foster stronger ties between our two countries. It is an honour and a privilege for ZESPRI to be recognised for our work in China.

“China currently accounts for six percent of ZESPRI® Kiwifruit sales and is a key market for growth. Based on current growth rates, it is realistic to anticipate that within a 10-year timeframe, China and Hong Kong could form up to 20 percent of our total business,” said Ms Ward.

A critical component of ensuring success in a market as diverse and complex as China, is ZESPRI’s comprehensive logistics and distribution strategy, recognised by the NZCTA as best in class.

The logistics strategy incorporates numerous partners including local New Zealand Kiwifruit growers, packhouses and coolstores, shipping and transport companies, and a network of wholesale and retail distribution outlets in China.

Coordinating the timely delivery of ZESPRI® Kiwifruit into the China market is particularly critical at the start of the New Zealand Kiwifruit season. Supported by an innovative local marketing strategy, early sales of New Zealand grown kiwifruit provide a strong platform for continued sales growth across the season.

The demonstrated efficiency of the China logistics strategy has already reaped rewards for ZESPRI and New Zealand Kiwifruit growers. Sales volumes in the 2008/09 year were 28 percent up on the 2007/08 year. ZESPRI’s distribution network across China is set to expand even further.

“ZESPRI’s success in China and the recognition of this success by the New Zealand China Trade Association Award, is reflective of both the strength of our current marketing structure and ZESPRI’s strong performance within that structure,” said Mr Peter Ombler, President New Zealand Kiwifruit Growers Incorporated.

The announcement today of the National Government funding initiative, which will herald an investment of an estimated $30 million for primary sector activities, has been warmly welcomed by ZESPRI.

ZESPRI CEO Lain Jager commended the government on the Primary Growth Partnership initiative saying, “This investment strategy reinforces the Government’s commitment to innovation as a strategic platform for the growth of New Zealand industry”.

“New Zealand has an enviable reputation for innovation and stellar performance within the primary sector. Additional financial support for research and development initiatives will stimulate economic growth and the realization of even greater opportunities on the international stage,” said Mr Jager.

ZESPRI’s own investment strategies for innovation in the kiwifruit industry have contributed significantly to the NZ economy. Over the last 10 years the kiwifruit industry has doubled in its export value to $780 million p.a., representing a compound annual growth rate (CAGR) of approximately 7 percent. This growth rate is expected to continue.

The growth of the kiwifruit industry has been driven largely by innovation in orchard practices and the development of new cultivars. ZESPRI currently commands a premium position in the global market for New Zealand kiwifruit and is able to maintain this through an intimate understanding of customers and consumer needs.

The opportunity to partner with the government for additional innovation and investment opportunities is expected to deliver numerous benefits; continued improvements to fruit quality, taste and health benefits, as well as the development and future introduction of new kiwifruit varieties.

ZESPRI will seek to work closely with the government to partner in investment projects and implement initiatives which will enhance orchard productivity and deliver profits directly to more than 3,000 New Zealand kiwifruit growers, in order to support the continued growth and success of the industry.

When singer song writer, Luke Thompson, learned of the ZESPRI® YouthBank programme he was blown away there was such a programme available to young people. So when ZESPRI approached Luke to be the 2009 Ambassador for the programme he jumped on board wholeheartedly.

He sees it as a great chance to give a little back to the community he has grown up in. “What an incredible honour to have the opportunity to work with young people and see them grow from this experience. I’m a big fan of seeing young people involved in ‘real projects’, this is good stuff.” Lukes thoughts on giving what you can to your community are “it’s ‘normal’, it doesn’t have to be money, its time, its effort and it’s using your talent, whatever that might be, to make a difference to someone.”

ZESPRI® YouthBank is a programme, administered by the New Zeal Foundation in which 12 colleges throughout the Bay Of Plenty participate. Each school establishes a committee of students along with a teacher to supervise, and together they seek Not for Profit Organisations that need promotion and a little monetary assistance. The committees have a total of $2,000.00 to allocate with only a few criterion from ZESPRI and New Zeal, the recipient organisation will be a registered charitable entity and the maximum $500.00 grant must be to support a youth related project. Ultimately at least four Not for Profit organisations will benefit through each school.

Over the seven years the ZESPRI® YouthBank programme has run it has seen assistance being given to some 350 Youth focussed Not for Profits, while 100’s of students have learned skills to take with them into the future. These students will work as a team, promoting and marketing, developing strategies, and most importantly they will see what it means to make a difference in their own community.

Over the next few weeks each school will be asking the various Not for Profit Organisations to approach them with why they could benefit from being a recipient. Please see below a list of participating schools and their contacts.

ZESPRI and New Zeal see Luke as a great fit for the programme, a local celebrity who can relate to the Bay Of Plenty youth community and is so willing to give his time and talents to promote it. Luke will be on tour in Australia until the end of July and will return to New Zealand to motivate and contribute at the presentation evenings held in August. His Debut Album Here On The Ground is in stores now.

ZESPRI today announced the indicative range of returns growers could expect for the 2009/10 season, following a strong performance for the 2008/09 year.

The forecast returns for ZESPRI® GREEN Kiwifruit are expected to hold steady against last year while ZESPRI® GOLD Kiwifruit returns continue their upward trend.

	Indicative Returns 2009/10 (Per tray, excluding loyalty premium)	2008/09 Actuals
ZESPRI® GREEN Kiwifruit	$6.70 to $7.20	$6.98
ZESPRI® GREEN ORGANIC Kiwifruit	$8.70 to $9.20	$9.27
ZESPRI® GOLD Kiwifruit	$11.20 to $11.70	$9.70

The ZESPRI Board also expect to pay 15 cents per tray loyalty payment in the 2009/10 Season.

Chief Executive Lain Jager said the forecast returns reflect the different markets for ZESPRI® GREEN and ZESPRI® GOLD Kiwifruit.

“Due to the global economic environment, we are not seeing the usual year on year growth for ZESPRI® GREEN Kiwifruit, the largest category in our portfolio, with demand at about the same level as last year and weaker pricing in fruit markets generally. Obviously ZESPRI is not immune to market conditions but it is important to note that ZESPRI® GREEN and GREEN ORGANIC Kiwifruit continue to maintain a significant price premium over the competitor fruit reflecting our quality offering.”

Mr Jager said that we can expect a greater supply of competitor products this year, and there has been an overhang of domestic kiwifruit in some markets.

“Traditionally at this time of the year, the northern hemisphere kiwifruit sales have finished, leaving a clear run for New Zealand ZESPRI® Kiwifruit. This year however there is still Italian kiwifruit in the market in Europe and domestic kiwifruit on retail shelves in Japan.”

On the positive side, Chief Financial Officer Mervyn Dallas said that a 53 percent decrease in oil prices and more favourable foreign exchange rates in the key GREEN markets had helped offset the reduction in pricing.

The story for ZESPRI® GOLD Kiwifruit was quite different, he said. The indicative returns for GOLD reflect the success of this product since its launch ten years ago. It has established an entirely new, premium category and its flavour profile targets a unique set of consumers who prefer a sweeter more tropical taste. Demand is growing year on year and this season exceeds supply, meaning ZESPRI® GOLD Kiwifruit has been able to maintain pricing levels in local currencies. The range of indicative returns is expected to increase by $1.50 to $2.00 on last year.

The ZESPRI® GREEN ORGANIC Kiwifruit indicative returns reflect the difficult market conditions for the organic category and an increase in supply volumes.

Mr Jager said that sales have started solidly in all markets but obviously it is still very early in the season to be forecasting returns in a global environment characterised by significant volatility. He also cautioned there is potential for the New Zealand dollar to strengthen during the year which may also impact returns.

The recent hailstorm which struck some crops in Te Puke, Opotiki and Whakatane on 11 May 2009 will impact on the forecast, he said. However this should be covered within the current range of indicative returns.

Financial results for the year ended 31 March 2009

The indicative returns forecast comes as ZESPRI announced its results for the year ending 31 March 2009, a year which saw the company over-deliver on its promise to growers of increased returns.

Chairman John Loughlin said that in June 2008 incoming Chief Executive Lain Jager promised growers that ZESPRI would deliver at least 65 cents per tray above the previous year’s average return per tray.

“The ZESPRI Team has done a very good of job to exceed this promise. ZESPRI has increased returns by 76 cents on average across all pools, with total fruit and service payments (excluding the loyalty premium) of $7.59 per tray supplied. This is an increase of 11 percent on the previous year.”

ZESPRI reported a consolidated net profit after tax of $23.9 million for the year ended 31 March 2009, compared with $19.7 million the year prior. This 21 percent increase on the previous period is due to the increase in global kiwifruit sales.

With oil prices at record highs of US$798 per tonne during 2008, New Zealand-sourced freight costs increased by $26.9 million. The bulk of ZESPRI’s shipping occurred during the peak in oil prices, resulting in an average per tonne rate of US$667 for the season, up from US$389 in the prior year. The movement in exchange rates had a significant impact over the previous year, leading to an increase of $52.8 million in returns to growers.

Net global kiwifruit sales increased 25 percent from $1.164 billion in 2007/08 to $1.451 billion in 2008/09. New Zealand-sourced kiwifruit volumes sold increased by 8 percent to a record 100 million trays. This increase was due to average orchard yields increasing by 6 percent, along with improved size profiles and increased pricing.

Chief Executive Lain Jager said that ZESPRI generated record returns in its key markets.

“Europe remained our largest market, with record sales of 60 million trays of kiwifruit which is a tremendous achievement for the ZESPRI Europe Team. The European market experienced increased demand for both ZESPRI® GREEN and ZESPRI® GOLD Kiwifruit. The emerging markets of China, South East Asia and North America showed the strongest year-on-year performances, growing from 10.8 million trays to 13.7 million trays. These markets currently account for over 14 percent of the total New Zealand crop sold and will remain very important for the future growth of the business.”

The company intends to declare a final dividend for payment in August 2009 of 56 cents per fully paid share, in addition to the interim dividend (paid in December 2008) of 35 cents per share. A special dividend of 7.41 cents was paid in March 2009, this being the company’s 50 percent share of the proceeds from the ZESPRI® GOLD Kiwifruit licence tender. This brings the total dividend for the 2008/09 year to 98.41 cents per share, representing 100 percent of available profits.

Mr Jager said that he is positive about ZESPRI’s ability to continue to grow strongly. “This growth will come from increased consumer penetration, strong growth in developing and emerging markets, new cultivars and investment in innovation.”

Mr Loughlin said maintaining the industry structure is essential to ensure future growth. “The integrated structure of our industry underpins our future growth strategy and is clearly in the best interests of New Zealand Kiwifruit growers, the kiwifruit category globally and the broader New Zealand economy.”

ZESPRI has today advised the absolute figure for the carbon footprint of ZESPRI® Kiwifruit exported to Europe. This is in response to numerous enquiries following the announcement of the carbon equivalent emissions throughout the lifecycle of ZESPRI® Kiwifruit.

The study, which measured the carbon footprint across the entire lifecycle of New Zealand Kiwifruit, was conducted in association with the New Zealand Ministry of Agriculture & Forestry (MAF), Landcare Research, Massey University, Plant & Food Research and AgriLINK. ZESPRI was selected as the lead partner for the horticulture sector.

The methodology used in the study parallels the UK’s PAS 2050 standard, launched in November 2008 and widely viewed as the most robust carbon emission measurement tool available for retail-based food products.1 This project focused on developing the carbon footprint measurement methodology and is expected to contribute to any final methodology being introduced to global standards authorities.

There is potential for confusion to arise should figures derived using other methodologies be compared and contrasted with ZESPRI’s. To demonstrate this point, information provided in the literature review for this study presented figures for tomatoes from Sweden, Denmark, Netherlands and Spain with significant variation in results, ranging from 0.8 - 5.6 kg CO2 eq/kg fruit. A study in the US investigating rice excluded carbon emissions relating to the transport from retailer to consumer and presented a figure of 6.4kg CO2 eq/kg.

When reviewing the ZESPRI® Kiwifruit carbon footprint number it is important to remember that there is no current, globally accepted methodology for measuring carbon footprints. However ZESPRI wanted to be pro-active and at least start the process with the most robust and accepted measurement tool. The number is therefore an estimate only and subject to change over time.

The study found that ZESPRI® Kiwifruit shipped and consumed in Europe contributes 1.74kg of carbon equivalents per 1.0kg of kiwifruit across its lifecycle from orchard to consumer.

It also advised that emissions at each stage of the lifecycle of ZESPRI® Kiwifruit destined for Europe:

• Orchard operations make up 17 percent of total emissions for EU exports;
• Packhouse and Coolstore processes account for 11 percent of total emissions;
• Shipping accounts for 41 percent of total emissions;
• Repacking and Retailer emissions amount to 9 percent of total emissions;
• Consumer consumption and disposal comprises 22 percent of total emissions.

ZESPRI is now working with the kiwifruit industry on a series of initiatives to reduce its carbon footprint, focused on Orchard, Packhouse & Coolstore and Transport.

As part of ZESPRI’s ongoing commitment to sustainability, ZESPRI has undertaken a comprehensive and robust study to measure the carbon footprint across the lifecycle of New Zealand Kiwifruit.

This study was conducted in association with the New Zealand Ministry of Agriculture & Forestry (MAF), Landcare Research, Massey University, Plant & Food Research (formerly HortResearch) and AgriLINK, with ZESPRI selected as the lead partner for the horticulture sector.

ZESPRI is the first kiwifruit marketer globally to use a measurement methodology which aligns with the UK’s PAS 2050, widely viewed as the most robust carbon emission measurement tool available.

Lain Jager, ZESPRI CEO, says this research highlights ZESPRI’s focus on sustainability.

“It’s critical that ZESPRI continues to set high sustainability performance standards and we take this responsibility very seriously. We’re fortunate to be working with global experts who have helped us to better understand our performance using a robust measurement tool, so we’re now in a position to make improvements in areas where we can have the most impact. For us the focus on sustainability, including developing a best practice approach to carbon efficiency, is a key part of our environmental responsibility and builds naturally on the initiatives introduced over the past 20 years that have seen the New Zealand Kiwifruit industry and ZESPRI take a leadership role in product quality, and food safety,” said Mr Jager.

In assessing carbon footprint, the study investigated each part of the supply chain, including Orchard Operations, Packhouse and Coolstore processes, Transport, Repacking and Retailer emissions as well as Consumer Consumption and Disposal.



The carbon footprint study has given ZESPRI a comprehensive understanding of the emissions at each stage of the lifecycle of ZESPRI® Kiwifruit:

• Orchard operations make up 17% of total emissions for EU exports;
• Packhouse and Coolstore processes account for 11% of total emissions;
• Shipping accounts for 41% of total emissions;
• Repacking and Retailer emissions amount to 9% of total emissions;
• Consumer consumption and disposal comprises 22% of total emissions.

*The study has been based on a ZESPRI® Kiwifruit destined for Europe.

The Minister for Agriculture, Forestry David Carter, says ZESPRI’s footprint study is a clear demonstration of New Zealand’s ongoing commitment to addressing climate change through innovative and sustainable practices.

“This study brought together government, primary sector and academic researchers to apply an internationally recognised carbon footprint methodology to leading primary producers. This methodology is now able to be used by producers and suppliers across New Zealand to assess current business practices and set in place changes that will ensure New Zealand retains a global leadership position in sustainability.”

Mr Jager says ZESPRI takes seriously its commitment to producing sustainable fruit.

“We are working with the kiwifruit industry on a series of initiatives to reduce our carbon footprint focused on the three key stages of the kiwifruit lifecycle that we have control over; Orchard, Packhouse & Coolstore and Transport.”

Industry-wide initiatives include:

Orchard:

• Climate change adaptation – adjusting on-orchard practices to accommodate the changing environment. For example, one grower has converted a natural gully into two lakes which now serve as an efficient irrigation system for his orchard;
• Focus Orchard Network – sharing best practice to optimise orchard product quality, yield and efficiencies.

Packhouse and Coolstore:

• Waste utilisation – turning kiwifruit waste into bio-plastics which can be used for packaging;
• Lean Manufacturing - streamlining processes, reducing waste, increasing efficiency in the packhouse.

Transport:

• Pack Optimisation - allowing a greater quantity of fruit to be shipped at one time without compromising quality;
• Slow-steaming ships – reducing a ship’s speed by 2km/h at certain points in the season lowers diesel use by 17%;
• The potential future use of SkySails – harnessing the wind’s energy by flying a sail 100–300m off the front of cargo ships, reducing carbon emissions and lowering operating costs.

By working with supply chain partners to identify areas for improvement, set initiatives in place and measure the impact of improvements as they are made, ZESPRI is leading the horticulture sector.

Note to Editors: The methodology used for the measurement of the carbon footprint parallels the UK PAS 2050 standard launched in November 2008 which is widely viewed as best practice.

The 2009 New Zealand kiwifruit season kicked off this week with the first of the ZESPRI® GOLD Kiwifruit shipments sent to Japan, ahead of schedule, while ZESPRI® GREEN Kiwifruit growers have started picking their quality fruit.

“We’re delighted with the quality of this early season harvest – the crop is clean with good sized fruit and excellent taste characteristics,” says Lain Jager, ZESPRI’s CEO.

“Our marketing teams in Asia and Europe plan to capitalise on the early start to the season with aggressive marketing campaigns, and our customers and consumers are eagerly anticipating the arrival of great tasting, high quality, healthy New Zealand Kiwifruit,” says Mr Jager.

The first shipment to Japan of 560 pallets, or 140,000 trays of ZESPRI® GOLD Kiwifruit, will arrive in Kobe, Japan on 6 April after being shipped from Gisborne on the MV Sasanqua. This is almost two weeks ahead of the 2008 season start date.

The first kiwifruit to leave New Zealand is sharing a boat with a consignment of late season squash. The opportunity to share loads provides cost efficiencies and is environmentally responsible, highlighting ZESPRI’s ongoing commitment to the environment.

The first shipments of ZESPRI® Kiwifruit are scheduled to arrive in China mid-April and in Europe at the end of April, in plenty of time to capitalise on the early season marketing programmes. The promotions will focus on the health and nutritional benefits of ZESPRI® Kiwifruit, supported by consumer competitions and nutritional campaigns in schools.

ZESPRI has secured the Sunbelt Spirit, a refrigerated cargo carrier for the largest ever single shipment of ZESPRI® Kiwifruit, below deck to Europe, due to arrive at the beginning of May. The ship will hold 7,300 pallets (approximately 69.5 million pieces) of ZESPRI® Kiwifruit, meaning more fruit can be exported at one time, cutting down on transit times whilst offering improved refrigeration efficiencies.

“ZESPRI is in a unique position of being one of the few fruit exporters globally who could coordinate this kind of volume to move out of one port,” says Mike Knowles, ZESPRI Shipping Manager.

Consumer demand for top quality ZESPRI® GREEN, GOLD and ORGANIC Kiwifruit is very high. In particular, demand for ZESPRI® GOLD Kiwifruit has increased significantly in the Asian markets and the demand for ZESPRI® GREEN Kiwifruit has been increasing year on year.

“ZESPRI has grown its presence in Europe, China, Japan and North America, and over the next two years we predict total volumes to grow by a further 10 million trays. Thanks to improved foreign exchange rates, reduced oil prices and a very strong 2009 crop we are well placed for a successful season,” says Mr Jager.

The early start to the season is great news for kiwifruit connoisseurs around the world and the New Zealand economy alike.

Around 25,000 people, mostly seasonal workers, will be employed by the New Zealand Kiwifruit industry to harvest, pack and ship millions of ZESPRI® GREEN, GOLD and ORGANIC Kiwifruit over the coming months, boosting the local and domestic economy.

“The kiwifruit industry is a key economic driver in the Bay of Plenty and generates revenues and flow-on revenues of around $2 billion annually, contributing 19 per cent to the region’s gross domestic product,” said Peter Ombler, President of New Zealand Kiwifruit Growers Incorporated.

“We are confident that a combination of an early start to the season, the high quality of the fruit and new export markets will bode well for a strong season for Bay growers,” said Mr Ombler.

A free trade agreement (FTA) with Korea could return $33 million a year to New Zealand Kiwifruit growers, ZESPRI said today following the government’s announcement of formal negotiations between the two nations.

The Korea announcement is hot on the heels of last week’s signing of free trade agreements between the South East Asian nations, Australia and New Zealand (AANZFTA).

ZESPRI Group Chairman John Loughlin met with the Republic of Korea President His Excellency Mr Lee Myung-Bak on Tuesday during his visit to New Zealand. Mr Loughlin said the company strongly supports the government’s move towards reaching an FTA with the Republic of Korea.

“Korea is a very important market for ZESPRI. New Zealand exports around 24,000 tonnes of ZESPRI® GREEN and ZESPRI® GOLD Kiwifruit to Korea each year. In 2008, this market was worth $100m to New Zealand kiwifruit growers.”

Mr Loughlin said that Korea’s current tariff on New Zealand kiwifruit is the highest in the world at 45 percent. This translates into a cost of $33.3 million each year, or $8,000 per grower.

He said ZESPRI has invested heavily in the Korean market over the past six years and has earned a reputation as a responsible marketer of quality fruit.

“In addition to spending more than US$30million on advertising and promotion in Korea, we have partnered with local kiwifruit growers on the island of Jeju to produce ZESPRI® GOLD Kiwifruit, under licence, for the Korean market.”

Mr Loughlin explained that a free trade agreement would secure New Zealand Kiwifruit’s premium position in the Korean market during the New Zealand off-season.

“Chile, one of our competitors in Korea, has a free trade agreement which will see its tariffs reducing to zero by 2014. ZESPRI has a superior quality product and marketing and service support, but unless we are able to remove the tariff our ability to service this market becomes unsustainable. With a free trade agreement of our own, New Zealand Kiwifruit can compete on a level playing field and win in the market on the basis of our premium quality fruit.”

The announcement of negotiations between New Zealand and Korea follows last week’s signing of an FTA between the South East Asian Nations, Australia and New Zealand (AANZFTA). Tariff reductions resulting from that agreement will make markets like Indonesia, Malaysia, Vietnam and the Philippines even more attractive and will deliver increases in net returns to the New Zealand kiwifruit industry, Mr Loughlin said.

“We congratulate the New Zealand government on securing these deals, which will deliver positive long term benefits to the economy and ZESPRI growers,” he said.

ZESPRI® GREEN and ZESPRI® GOLD Kiwifruit may strengthen the body’s natural defences for everyday protection, according to studies published this week in Proceedings of the Nutrition Society of New Zealand.

ZESPRI® Kiwifruit have been found to boost the body’s immune system, improve digestive health and muscle performance, and reduce inflammation and cell damage.

This latest research, part of ZESPRI’s science programme to demonstrate the health benefits of kiwifruit, supports previous studies that show kiwifruit can help strengthen natural defences for everyday protection.

The new studies have found that ZESPRI® GREEN and ZESPRI® GOLD Kiwifruit may provide the following benefits:

• Enhances the body’s natural immune response, allowing it to fight off colds, the flu and other illnesses
• Reduces inflammation which is associated with long-term diseases such as arthritis, cancer, heart disease, diabetes and obesity
• Assist in achieving the optimum balance between good and bad bacteria in the intestines
• Protect against cancer associated enzymes in the lower digestive tract
• Protect muscles against exercise-related oxidative stress

ZESPRI® Kiwifruit is full of nutrients, with high levels of vitamins C and E, anti-oxidants and fibre. It is considered to be one of the new ‘superfruits’ because of its added benefits to the body over and above basic nutrition.

“We all know that consuming fruit is good for us, but we wanted to know if kiwifruit in particular has a beneficial effect on the body’s natural defence system,” says Lynley Drummond, Health Science Manager at ZESPRI International Limited.

“These studies are an exciting step forward and support growing evidence that ZESPRI® Kiwifruit can strengthen the immune system and protect the body in many ways.”

The three studies published this week in Proceedings of the Nutrition Society of New Zealand, were conducted in New Zealand at the New Zealand Institute for Plant and Food Research and Massey University.

Other evidence highlighting ZESPRI® Kiwifruit’s natural health protection qualities includes studies published earlier this year that found mice consuming kiwifruit extract had stronger immune responses compared to the placebo group. Levels of protective immunity cells, which identify and destroy harmful foreign bodies, were elevated in groups fed kiwifruit.

ZESPRI is a grower owned cooperative of New Zealand kiwifruit growers, with the aim of ensuring top quality ZESPRI® GREEN and GOLD Kiwifruit are provided to consumers around the world, all year round.

Lain Jager has been appointed Chief Executive of ZESPRI Group Limited, effective immediately, following five months as Acting CEO and previous ZESPRI experience as Human Resources Manager and General Manager Supply Chain.

ZESPRI Chairman John Loughlin said the Board appointed Lain after an extensive five-month recruitment process. “We followed a robust process which resulted in a good quality shortlist of candidates,” said Mr Loughlin. “Lain has grown and developed in the role of Acting CEO in the past five months, and the Board is delighted to confirm that our industry will continue to benefit from his experience, skillset and dedication.”

Following a career in various human resources roles, Mr Jager joined ZESPRI in 1999 as Human Resources Manager and was promoted to General Manager Supply Chain in July 2004. His ZESPRI experience includes responsibility for human resources, communications, grower relations, corporate strategy, supply chain and innovation. He was appointed Acting CEO on 1 July 2008, following the departure of Tony Nowell.

“I’m delighted to have it confirmed that I will continue to be a part of the ZESPRI community which I’ve been involved with for the past 10 years,” said Mr Jager. “Real strength exists in our supply chain and this starts with our dedicated grower base and flows through to our loyal customers and consumers. I’m privileged to be surrounded by a significant depth of expertise and experience, both within ZESPRI and within our industry, and I’m looking forward to the opportunities and challenges that lie ahead.”

“Final returns for the 2008/09 Season are shaping up well and I believe we’re well positioned for future growth. But we can expect some challenges along the way as the global economic situation unfolds. I am determined that we retain our regulated industry structure, that we unlock the value within our GREEN business, and that we continue to build demand for our kiwifruit through new cultivars, brand strength, 12-month supply and product differentiation.”

The Shanghai High Court has ruled in favour of ZESPRI in its case against copycat brand Znishio and has ordered the infringing company Nantong Xishu Fruit Trade Company Limited to pay RMB 300,000 (approx NZ$80,000) in compensation to ZESPRI, as well as to destroy all infringing kiwifruit labels and packaging.

ZESPRI’s General Counsel Murray Denyer said that this was an outstanding result, and one that was gaining wide publicity in China through media reporting.  “ZESPRI works closely with New Zealand Trade and Enterprise (NZTE), the New Zealand Ministry of Foreign Affairs and Trade and other monitoring and enforcement agencies in all of our markets to ensure our intellectual property is protected,” said Mr Denyer. 

“Following reports from NZTE about significant volumes of copycat Znishio branded fruit in the Shanghai markets in 2007, our lawyers in China investigated and collected evidence which they then presented to local enforcement agencies.  Within 24 hours of the evidence being presented, the Chinese authorities then conducted a raid of premises where Znishio fruit was stored. This resulted in the confiscation of product and marketing materials.” 

The evidence seized in the raid was then used to take court action against Nantong Xishu Fruit Trade Company, the company behind the Znishio branded fruit in the second half of 2007.  The case was heard in the Shanghai No.1 Intermediate Court in early 2008, and in June 2008 that court ruled in ZESPRI’s favour, ordering Nantong Xishu to pay RMB300,000 in compensation to ZESPRI, and ordering the company to destroy all infringing labels and packaging.  Nantong Xishu appealed the court’s ruling, and the Shanghai High Court has now heard the appeal and upheld the lower Court’s original judgement.”

Mr Denyer said that ZESPRI would be working with its Chinese lawyers to ensure the judgment was enforced.  “This is a great result,” he said.  “As well as effectively shutting down this particular infringer, the publicity this decision is getting in China will hopefully be an effective deterrent against other would-be copycats.

“We’ll continue to work with our offshore partners to monitor infringements such as this and take action as is necessary to protect the significant value we have developed in the ZESPRI® Brand.”

ZESPRI International Limited announced today that the 100 millionth ZESPRI tray is being shipped this week, marking a record season for the New Zealand kiwifruit industry.

Acting Chief Executive Lain Jager said this is the first time in the history of the New Zealand kiwifruit industry that this many trays are being exported during one season. “This milestone is attributable to the dedication, expertise and commitment of over 25,000 people involved in the New Zealand kiwifruit industry,” said Lain.

As well as carrying the 100 millionth ZESPRI tray, the departure of the M.V. Antwerp to Japan this week signifies the end of shipping for the 2008/09 season.

“By all accounts this has been an outstanding year so far – starting with an excellent production season where growers delivered fruit to meet ZESPRI’s premium quality requirements,” said Lain. “Our industry partners pulled together with ZESPRI employees to successfully manage the increased volume and we’re confident of a positive finish to the season. Our industry’s unrelenting focus on quality and serving our customers, along with integration and innovation, will underwrite our continued success in the future.”

A celebration was held at ZESPRI today to acknowledge the roles of ZESPRI employees, ZESPRI kiwifruit growers (represented by the New Zealand Kiwifruit Growers Association), Kiwifruit New Zealand (regulatory authority), the Port of Tauranga and ZESPRI’s other shipping partners in reaching this milestone.

Lain Jager introduced Grant and Adele Fowlie, the growers of the 100 millionth ZESPRI tray, who own a 10-hectare ZESPRI® GREEN Kiwifruit orchard and 3 hectares of ZESPRI® GOLD Kiwifruit in Te Puke. “We think it’s wonderful that ZESPRI can continue to export high volumes of fruit, and still maintain good returns for growers,” said Grant Fowlie. “We are proud to be the grower of the 100 millionth ZESPRI tray and recognise ZESPRI and the industry for this hugely admirable feat.”

Alister Hawkey, Chairman of G6 Kiwi Supply Limited and supplier of the pallet that contained the 100 millionth ZESPRI tray, was presented with a commemorative plaque recognising G6 Kiwi’s contribution. “G6 Kiwi is proud to deliver to ZESPRI the 100 millionth tray for export and congratulate ZESPRI and the industry in achieving this milestone. This has collectively been a tremendous effort from growers, post-harvest operators, suppliers and ZESPRI.”

“As the world’s leading marketer of kiwifruit, ZESPRI and the industry should feel immensely proud of its brand, its service and its fruit quality. G6 Kiwi looks forward to continuing to supply a premium product and service to ZESPRI and its customers worldwide,” said Alister Hawkey.

Each of ZESPRI’s other six kiwifruit supply partners also received a commemorative plaque recognising their contribution towards this milestone.

The ZESPRI® Brand was launched in 1997 and is now recognised as the world leader in premium quality kiwifruit. ZESPRI manages 30 percent of internationally traded kiwifruit, supplies 52 countries and represents over 3,000 New Zealand growers of ZESPRI® GREEN, ZESPRI® GOLD and ZESPRI® GREEN and GOLD ORGANIC Kiwifruit.

Did you know:

• 100 million trays of ZESPRI® Kiwifruit would be enough to fill 92 Olympic-sized swimming pools
• If placed end-on-end 100 million trays of ZESPRI® Kiwifruit would wrap around the world five times
• The 2008 season shipped more than double the volume of premium quality ZESPRI® Kiwifruit than it did 10 years ago

ZESPRI Group Ltd Chairman Craig Greenlees has announced his decision to step down after six years in the role. The Board this morning elected independent director of six years and former Richmond Ltd CEO John Loughlin as his replacement. Peter McBride will be deputy chairman, after six years as a director.

Mr Greenlees said he had decided to make this year his last as chairman and had advised the Board at its first meeting following the AGM. He will continue as a director of ZESPRI Group Ltd and also G6 Kiwi Ltd.

“I am enormously proud of the progress ZESPRI has made under my chairmanship over the last six years,” said Mr Greenlees. “We have moved well beyond the industry crisis of the late-1990s and are now, in my view, New Zealand’s most successful international marketing business and perhaps the only horticultural-product marketer in the world to achieve a genuine premium from our brands. That is because of the unity of the industry, the strong grower support we have achieved and the New Zealand Government’s commitment to our Single Point of Entry (SPE) marketing system."

“I am very pleased that the company is now ready to move into another strong growth phase after more challenging market environments over the last two years, and believe it is the right time for new leadership at Board and Executive level to secure those gains. It is also a good time for an independent director to take over the chairmanship at a time of industry consolidation, particularly in the post-harvest sector.”

Mr Loughlin said that it was an honour to be asked by the Board to take up the chairmanship. “I am tremendously excited about ZESPRI’s prospects,” he said. “It has very strong brands, outstanding grower loyalty, world-class executive and marketing talent, excellent research and development capability and is able to act strategically in the world marketplace thanks to its SPE system. "

“I am looking forward to meeting with employees today, and growers during the two-week roadshow starting on Monday, to outline the particular perspective I will bring as chairman, being initially from outside the kiwifruit industry. I am pleased to have Peter McBride as my deputy given his deep links, history and knowledge of this industry over his entire career.”

Mr Loughlin said the Board was continuing the process to appoint a permanent CEO following the resignation of Tony Nowell in June.

“The Board believes strongly that we are moving into a new growth phase and the next stage of the company’s development as a 12-month global supplier. It is the right time to secure the new leadership at Board and Executive level to serve the company and its growers and shareholders over the next five years and beyond.”

Four very promising new kiwifruit test varieties from ZESPRI are being placed in 30 hectares of pre-commercial grower block trials this year, following an extensive process of evaluation.

The four new varieties have been naturally bred by ZESPRI’s exclusive breeding partner HortResearch. They represent the many years both companies have dedicated to building knowledge and understanding of kiwifruit’s natural diversity and consumer promise.

Acting Chief Executive Lain Jager said the decision to release these new varieties to grower trials was not taken lightly. “Breeding, selecting, evaluating and releasing new kiwifruit varieties requires decades of commitment. The four new varieties that growers will be trialling have been under assessment for the past six to seven years, and form part of a 25-year research programme.”

Attributes that ZESPRI looks for as part of its programme with HortResearch include superior fruit size, attractive appearance, a long storage and shelf life, high nutritional content and most importantly, exceptional taste. Mr Jager said the trial varieties include both GREEN and GOLD and have a combination of the desired attributes.

Mr Jager said that to wear the ZESPRI® Brand, prospective varieties must be economically viable to produce and market. “Before the new varieties are taken to pre-commercial grower trials, smaller trial sites were established to allow for rigorous supply chain and consumer testing. This continued until we were satisfied we had  very promising new test varieties that have a high likelihood of meeting the exacting standards of our growers, customers and consumers.”

ldquo;We would only ever release varieties to the industry if we were certain of their commercial viability. We are confident that our new varieties are best in class and if they perform as expected in the pre-commercial trials, one or more could be commercially released to the New Zealand industry as early as 2010.”

Over the past five years the New Zealand kiwifruit industry has invested $8.1 million in new varieties and ZESPRI’s programme with HortResearch.  This breeding program is now the world’s largest, with over 50,000 seedlings currently under evaluation. Given the size of the programme, ZESPRI expects to be in a position to release further world-leading varieties for ZESPRI pre-commercial trials every few years.  This will provide a large pool of well tested new varieties that will ensure ZESPRI always has the premier varieties in every kiwifruit product category.

HortResearch acting Chief Executive Dr Bruce Campbell said HortResearch was excited to see new varieties moving closer to commercialisation.

“It is pleasing to see the fruits of so much hard work emerging as products that will really excite the consumer, ” he says.

The overwhelming achievement of ZESPRI® GOLD Kiwifruit, which now represents a quarter of ZESPRI’s $1 billion business and is by far the most successful new kiwifruit in the market, demonstrates the success of the ZESPRI / HortResearch breeding programme.

ZESPRI believes in an entirely natural breeding programme, using natural processes which have been used for decades to produce new varieties. The ZESPRI / HortResearch breeding programme does not use genetic engineering.

At ZESPRI’s Annual General Meeting, held in Tauranga today, Chairman Craig Greenlees highlighted strong market performance in the year ending 31 March 2008, despite a significant crop increase.

“Total sales volumes and revenues were up in each of our key markets, a significant accomplishment with New Zealand crop volumes increasing by 15 percent over the prior year.”

Despite this achievement, Mr Greenlees said the impacts of foreign exchange, increased price-led competition and rising costs, particularly fuel and labour, severely impacted grower returns. “Although we delivered a highly credible market return, it just didn’t translate into what went into growers’ pockets.”

Mr Greenlees said he remained optimistic about the indicative per-tray returns announced in May, despite further fuel increases since then. “If we are successful in increasing average per-tray returns by at least 65 cents, on another significant increase in volumes, then that truly will be an excellent result.”

Acting Chief Executive Lain Jager used the Annual Meeting as an opportunity to focus on what was needed to improve GREEN Kiwifruit returns, which in the past season were down by 17 percent. “Our analysis showed that the highest earning 25 percent of GREEN growers’ returned on average at least three times more per hectare than the average grower,” said Mr Jager. “Alarmingly, almost 40 percent of GREEN growers had a net orchard return of below zero. Clearly, many of our GREEN growers did not have a sustainable business in 2007.”

The answer, he says, lies in ZESPRI’s historical recipe for prosperity, combined with an urgent focus on core business and innovation. “It requires a relentless commercial and market-focused approach. There is no room for complacency, only excellence and ever-increasing productivity will cut it.”

Resolutions passed

Shareholders appointed Dr Mark Bayly as a ZESPRI director, to replace Graham Drury who is standing down after five years in the role. 

Dr Bayly is an experienced director with significant executive experience, having worked as a marketing and management consultant for large international organisations including Vodafone, AIB (Ireland’s largest bank), Ogilvy Group Ireland, Baileys Irish Cream and Pepsi & 7up. Dr Bayly has also worked with Saatchi & Saatchi in Auckland and Dublin and Hesketh Henry Barristers and Solicitors.

Dr Bayly and his family own a 5.5 hectare GREEN orchard, is a member of the industry’s GREEN Development Group and is a director of Pacific View Pack & Cool Limited and Kiwifruit New Zealand.

Dr Bayly has a PhD (Law and Business), a Master of Business Studies (Hons) in Strategic Management and Planning, Master of Commercial Law (Hons), a Bachelor of Science and a Bachelor of Commerce.

“I’ve been active within the New Zealand kiwifruit industry in different capacities and understand the business well,” said Dr Bayly. “Through my appointment as a ZESPRI director I can contribute to the exporting and international marketing of kiwifruit. Part of my role will be to strive to retain the industry’s single point of entry structure. This, combined with building and maintaining high prices in markets and eliminating unnecessary cost and complexity, is critical if we are to improve returns and profitability to growers.”

Shareholders also re-elected Craig Greenlees and David Pilkington, who were both unopposed. 

The AGM passed six resolutions including endorsement of the use of capital to fund the export of processed kiwifruit products that are no longer in the form of kiwifruit. This was passed by 99 percent, with approval provided until 2010.

A shareholder resolution, which proposed that the Board review the voting entitlement of shareholders to consider whether it should be changed to each shareholder having one vote, received 30 percent approval, which did not meet the 50 percent required.  

Annual General Meeting Speech 2008, Lain Jager, Acting CEO
Annual General Meeting Speech 2008, Craig Greenlees, Chairman

A new study published this week in Food and Agricultural Immunology adds to the growing body of evidence that kiwifruit may help boost the body’s natural defence mechanisms.

Lynley Drummond, Health Science Manager at ZESPRI International, based in New Zealand, said “This study provides more promising evidence that kiwifruit can help improve the body’s natural defence response.”

The study (conducted by scientists at Bioactives Research New Zealand) showed that mice consuming kiwifruit extract – an extract of both ZESPRI® GOLD and ZESPRI® GREEN Kiwifruit – had a far better immune response to two types of vaccination, both in the levels of antibodies produced against the vaccinations in blood and surface cells, and in the levels of protective innate immunity cells, which the body uses to identify and destroy harmful processes in the body. This was compared to mice in the placebo group.

“We all know that consuming fruit regularly is good for us, but we wanted to know if kiwifruit in particular, could have a beneficial effect on the body’s defence system,” said Ms Drummond. “What we found in this study seems to indicate that it does, at least in a well-researched animal model and these findings complement those of a earlier study (conducted by scientists at The Horticulture and Food Research Institute of New Zealand and AgResearch) published in Nutrition Research April (2008) which also demonstrated a positive effect of ZESPRI® GOLD Kiwifruit on immune responses.”

Together both studies provide strong evidence that kiwifruit may have a positive effect on the immune system. The next steps are to confirm these findings in human clinical trials.

Possible reasons for the outstanding effect of ZESPRI® GOLD Kiwifruit on natural defence mechanisms include:

• The high vitamin content. ZESPRI® GOLD Kiwifruit are high in vitamin C and vitamin E, compared to most other fruit.
• The high antioxidant content - in particular the amounts and unique balance of carotenoid antioxidants. These compounds have previously been shown to boost natural levels of resistance. 
• The high soluble fibre content, important for healthy gut function, which is one of the body’s most important areas for natural defence.

These publications signal the beginning of ZESPRI International Limited’s new kiwifruit health research platform – Natural Protection - and there is a body of science underway to support this platform.

ZESPRI Group Ltd CEO Tony Nowell has tendered his resignation to the ZESPRI Board, effective from 30 June 2008, and Lain Jager, ZESPRI’s General Manager Supply Chain, has been appointed acting CEO, effective from 1 July, the company’s chairman, Craig Greenlees, announced today.

Mr Nowell wishes to focus more widely on the development of the broader New Zealand food industry, the country’s growing international trade opportunities and personal community interests.

“ZESPRI has achieved a decade of extraordinary growth in revenues and returns since 1998 thanks to its great team, its superb product and its outstanding brand, together with its single point of entry marketing system,” Mr Nowell said today.

“In the last 15 months, I have enjoyed my role in putting in place the structural and personnel changes within the company that will position it well to replicate that record of success in the decade ahead.

“The skilled and capable senior management team now in place will continue to execute the company’s clear strategic direction and achieve the challenging objectives its board and growers/shareholders have set.

Mr Greenlees thanked Mr Nowell for his service over the last 15 months and said the Board believed he had achieved important changes within the business over that time. He said an extensive search for a new CEO would begin immediately and the Board looked forward to working with Mr Jager in his new role as acting CEO.

Mr Jager said it was a privilege for anyone to be part of the ZESPRI community as he had been for 10 years.

“I feel an enormous responsibility to build on the relationships from grower to consumer that are at the heart of the ZESPRI business, and have agreed three priorities as acting CEO with the Board:
1. Deliver returns to growers in 2008/09 of at least 65 cents above last year’s average per-tray return
2. Further develop the executive and management capability of the ZESPRI team
3. Secure tangible gains by a truly integrating the supply chain from cool-store to customer, including the onshore industry in New Zealand

“These priorities are challenging in the context of low returns last season and increasing costs through the value chain but they are essential to deliver on the strategic plan against which the entire ZESPRI team is accountable to our growers and shareholders,” he said.

ZESPRI today announced an indicative range of grower returns forecast for the 2008/09 season, which will be keenly welcomed by the New Zealand kiwifruit industry.

Fruit and service payments per tray supplied (excluding the loyalty premium) are forecast to increase by a range of $0.45 to $0.85 per tray for ZESPRI® GREEN Kiwifruit, $0.55 to $0.95 per tray for ZESPRI® GREEN ORGANIC Kiwifruit and $0.50 to $0.90 per tray for ZESPRI® GOLD Kiwifruit. 

Indicative Amounts for 2008 / 09		2007 / 08 Actuals
ZESPRI® GREEN	$6.75 to $7.15	$6.30
ZESPRI® GREEN ORGANIC	$8.70 to $9.10	$8.15
ZESPRI® GOLD	$9.30 to $9.70	$8.81

The ZESPRI Board is aiming to deliver a loyalty premium per class 1 tray of $0.15 for the 2008/09 season, compared with $0.10 for the 2007/08 season. The loyalty premium is paid to growers who are party to ZESPRI’s three-year rolling contract.

Chief Executive Tony Nowell said the forecast improved return and loyalty premium would be welcomed, particularly from GREEN growers who have been hardest hit by the impacts of foreign exchange movements in 2007/08. “Average fruit and service payments per tray last year were down by 14 percent on the prior year. The increase in forecast payments for the 2008/09 season is attributable to improved in-market pricing, size profile and foreign exchange situation, but is offset to some degree by increased shipping costs. Improvements to the size profile of this year’s crop reflects considerable effort by growers to match the optimum market profile signalled by ZESPRI.”

Mr Nowell also said the industry had managed an exceptional start to the current season with another record crop of good quality, great tasting, early fruit arriving into an encouraging market environment. “We’re extremely encouraged by the positive start to this season with fruit being harvested, packed and loaded with minimal constraints,” he said. “This again reflects the efforts of growers and post-harvest suppliers towards best-practise harvesting and packing to meet ZESPRI’s premium quality standards.”

President of New Zealand Kiwifruit Growers, Graham Wiggins, congratulated growers on increasing fruit size profile and improving picking quality, noting that apart from the reducing exchange rate these were key reasons for the forecast return increasing. “I am encouraged by the increase in fruit and service payments but recognise that growers’ on-orchard and post-harvest costs have risen significantly,” said Graham. “The whole industry must continue the industry’s war on costs to drive for extra value and cost efficiencies on-orchard and throughout the supply chain.”

Financial results for the year ended 31 March 2008

The turnaround in returns comes as ZESPRI announces its final season results for the year ending 31 March 2008. ZESPRI reported a consolidated net profit after tax of $19.7 million for the year ended 31 March 2008, compared with $22.1 million the prior year. This 11 percent reduction on the previous period is due mainly to a structural change in ZESPRI’s margin. From 1 April 2007, ZESPRI lowered the margin it takes on net sales from 7 percent to 6 percent, and on the net return to suppliers from 7 percent to 6 percent. The profit before tax was favourably impacted by $4.7 million of income from the sale of ZESPRI® GOLD Kiwifruit licences.

Foreign exchange movements had a significant impact over the prior year, removing $80 million or $0.80 per tray from grower returns. ZESPRI’s hedging policy helped to some extent, but the continued strengthening of the New Zealand Dollar during 2007/08 impacted heavily on ZESPRI’s US Dollar and Japanese Yen income streams.

Net global kiwifruit sales increased 3 percent from $1.125 billion in 2006/07 to $1.164 billion in 2007/08. Fruit and service payments (including the loyalty premium) increased by 1 percent from $654.3 million to $660.5 million. When spread over the larger crop, this equated to a 14 percent reduction in per-tray fruit and service payments, from $8.07 to $6.93 per tray supplied.
New Zealand-sourced kiwifruit volumes sold increased by 15 percent to 92.4 million trays from 80.1 million trays in 2006/07. This larger-than-normal variance was partly due to the high fruit loss volumes experience during the 2006/07 season.

Tony Nowell said that despite the challenges of the past season, ZESPRI generated record returns in its key markets. “Record sales volumes and returns were generated in Japan, Korea, Taiwan, Hong Kong, Singapore, Malaysia and China. Europe sold record volumes of kiwifruit and generated a record market contribution in total but, with intense price competition from Chile along with a smaller size profile compared with the prior season, contribution per tray was lower than for the previous year.”

Mr Nowell said costs across our industry are increasing, particularly from fuel, freight and wage increases, and foreign exchange impacts over the past year have dragged down five-year average returns significantly. “Healthy returns will be driven by ZESPRI-controlled revenue growth, a disciplined focus on expenditure right across our industry and the adoption of best-practise orchard management techniques,” he said. “ZESPRI has implemented a number of efficiencies for the 2008 season and we remain focused on initiatives to add further value and reduce costs. We will continue to work with our supply partners and growers to encourage industry-wide adoption of practises that will drive improved returns for growers.”

The Company intends to declare a final dividend for payment in August 2008 of 33 cents per fully paid share, in addition to the interim dividend (paid in December 2007) of 35 cents per share. A special dividend of 12.67 cents was paid in March 2008, this being the company’s 50 percent share of the proceeds from the sale of GOLD licences. This brings the total dividend for the 2007/08 year to 80.67 cents per share, compared with 82 cents in 2007/08, both representing 100 percent of available profits.

The world’s best kiwifruit is now on its way to meet the high demand of discerning Japanese consumers with the departure of the Sampaquita 1 from the Port of Tauranga this week.

The industry has harvested and packed more than double the volume of ZESPRI® GREEN and GOLD Kiwifruit, compared with this time last season. General Manager Supply Chain, Lain Jager, said his team has planned an aggressive early shipping schedule with 15 percent more trays scheduled to be shipped by early May.

“We’re expecting another large crop this year to be exported within the same 30-week window,” said Mr Jager. “Our focus right now is on managing a smooth export operation from the orchard through packing and transport, to ensure the fruit arrives in the best possible condition and meets the quality expectations of our customers.”

A new system for managing supplier orders, receipting inventory at the onshore ports and controlling the vessel loading process went live this week, after work by ZESPRI, service providers and industry partners over the past eight months. Lain Jager said the previous wharf system was built over 15 years ago to manage the flow of information between suppliers, ZESPRI and the Port, as part of ZESPRI’s orchard to retail traceability system.

“Our industry has advanced significantly since the early 1990s to now manage almost 100 million trays, and the old system was simply not coping. By replacing it with a solution using our existing SAP infrastructure we have improved process efficiencies and data quality, and created a strong platform to support future growth. The project team has completed an impressive amount of work designing and building the new system, and the implementation has gone smoothly with the first ship of the season being loaded successfully this week.”

Dry weather conditions have helped bring this season’s harvest forward and will be critical to ensure successful picking and vessel loading over the next two months. Another important factor is a steady supply of labour for picking and packing. Chief Executive of NZ Kiwifruit Growers Incorporated, Mike Chapman, said a labour shortage has been declared in the Bay of Plenty, where 80 per cent of ZESPRI’s kiwifruit is grown.

“Under recently-amended immigration policies, workers can move more freely between employers and regions in areas where a labour shortage has been declared,” said Mr Chapman. This helps revive the harvest trail and should see workers moving from apples to kiwifruit as our picking starts.” He said he was hopeful that sufficient numbers of workers will be available for the season.

The first trays of ZESPRI® GREEN and ZESPRI® GOLD Kiwifruit were successfully loaded on the Sampaquita 1 in Gisborne and Tauranga this week, destined for Tokyo and Kobe, with a further 14 vessels scheduled for departure this month.

The first ships are scheduled to arrive in Asian and European ports to capitalise on the early season marketing programmes. The promotions will include television commercials, billboards and magazine advertising, in-store promotions and consumer competitions, nutritional campaigns in schools and strong public relations activities focusing on the health and nutrition values of ZESPRI® Kiwifruit.

Ideal weather conditions and excellent fruit quality are heralding a superb 2007 season start for the New Zealand Kiwifruit industry. Kiwifruit growing region throughout the North Island are abuzz as picking gangs move through orchards and packhouse activity ramps up. "We got away to an early start this season and we're slightly ahead of where we were at this time last year with almost 8 million trays of ZESPRI® GREEN and GOLD Kiwifruit packed so far, compared with around 7 million in 2006," said Lain Jager, General Manager Supply Chain.

"In addition, fruit quality is exceeding expectations with good taste characteristics.  Our marketing teams in Asia and Europe are gearing up for product to start arriving next week, and our customers and consumers are eagerly anticipating the arrival of great tasting, high quality New Zealand Kiwifruit."

The post-harvest sector is in full swing and for many the investment in efficiency improvements is starting to pay off.  "We've got a full team on-board now and commenced full day and night shifts this week," said Jams Trevelyan, Operations Manager for Te Puke-based Trevelyan's Pack & Cool. "We've been able to get a lot more volume through earlier than we did last year and we're pleasantly surprised about the good quality of fruit coming through."

Trevelyan's are one of many post-harvest facilities to have invested significantly in additional resources to improve efficiencies. "Our new campground and backpackers have been well received and our new coolstorage facilities are coming on stream now," said Mr Trevelyan. "With over 550 people plus contractors, and with a culturally diverse workforce of over 10 different nationalities, the challenge for us now is to ensure we continue to work efficiently to maintain the high standards that our customers expect."

One way ZESPRI builds customer expectations is through its inbound tour programme.  A key aspect of the overall marketing mix, the programme helps enhance customer loyalty by connecting key customers with New Zealand's unique environment and the people who produce and handle ZESPRI® Kiwifruit.

In the past few months ZESPRI, the post-harvest sector and kiwifruit growers have hosted a large number of influential international customers, with many commenting on the high quality of the fruit on the vines, creating positive market anticipation for early fruit.

The first of the early fruit departed New Zealand's shores for Tokyo aboard the Asian Lavender on Tuesday last week, and ten more ships are set to depart over the next two weeks destined for ZESPRI's key markets of Japan, Europe, South Korea, Taiwan and Hong Kong.  Included in this group is the maiden voyage of the MV Star Best, an impressive new reefer vessel which will depart for Zeebrugge, Belgium, on Saturday 14 April, laden with thousands of pallets of high quality New Zealand Kiwifruit.

ZESPRI Shipping Manager Mike Knowles said, "This is the first year we've been able to dispatch two ships to Europe this early in the season, and we're delighted that one of these will be the brand new MV Star Best." Mr Knowles said the MV Star Best is the third of four new specialised refrigerated vessels that Star Reefers is building, the first of which, the MV Star First, was used by ZESPRI last season to cut down the transit time to market and improve refrigeration efficiencies.

The first ships are set to arrive in Europe and Asia to capitalise on the early season marketing programmes. The promotions will include television commercials, billboards and magazine advertising, in-store promotions and consumers competitions, nutritional campaigns in schools and strong public relations focusing of the health and nutrition values of ZESPRI® Kiwifruit.