Strong Results in Tough Year as Psa Recovery Pathway Begins

Media Release - 19 July 2012

​Zespri’s 2012 Annual Meeting marked record global sales in one of the most difficult years for the New Zealand kiwifruit industry and looked ahead as the industry takes its first significant steps along the Psa recovery pathway.

Zespri Chairman John Loughlin said in the 2011/12 season - while the industry was rightly focused on the impact of Psa on orchard survival, incomes and the value of assets - Zespri had its hands full selling a record volume crop in a challenging global market.

The New Zealand-grown 2011 crop of 109 million trays was sold against a backdrop of sluggish demand in the key markets of Japan and Europe and in the face of intense competition from Chilean producers in most markets.

“In the face of these challenges, our market teams had to be disciplined to maintain Zespri’s premium market position and sell the record crop in an orderly manner. Maintaining this discipline resulted in global revenue increasing by 7.2 percent, or by over $100 million, to $1.62 billion in 2011/12,” Mr Loughlin said.

 Mr Loughlin said while the record sales returns were pleasing, Zespri would continue to focus on lifting returns to Green growers, who continue to be challenged by increasing competition and volatile foreign exchange rates.

 Zespri CEO Lain Jager said a particular highlight of the 2011/12 season was the performance of markets in Asia, especially Korea, China, Taiwan and Southeast Asia.

“Each of these markets was characterised by strong growth, both in sales volumes and market returns. These results underline how important growth in Asia and other rapidly developing markets is for the future of the industry,” Mr Jager said.

Mr Jager said developing new and emerging markets was one of four strands to Zespri’s long-term growth strategy, the others being health marketing, developing new varieties and supply chain development.

 Mr Loughlin said the future for the New Zealand kiwifruit industry was bright. However, there were some critical challenges to surmount in coming months as the industry embarked on the Psa recovery pathway.

 The industry is currently undertaking grafting of over 2000 hectares of existing orchard to a newly-commercialised Zespri licensed variety known as Gold3. Gold3 has shown greater tolerance to the vine-killing disease Psa, compared to the original Zespri Gold variety known as Hort16A.

“Gold3 is the cornerstone of a potential recovery pathway but the pathway will not be successful without an unrelenting focus on managing orchards to minimise Psa risk. This spring will be a critical period for vines grafted this winter as the Psa-infection risk peaks,” Mr Loughlin said.

 Mr Loughlin said the Zespri Board was committed to significant ongoing investment to support the long-term success of the recovery pathway.

“Should the recovery pathway be successful, Zespri and the wider kiwifruit industry will then face the positive challenge of having to manage rapidly increasing Gold volumes. Our long-term growth strategy is clear and maintaining our focus on that and our response to Psa will cement the future of the New Zealand kiwifruit industry,” Mr Loughlin said.

 Outcomes of the meeting included:

  • Two Directors – Antony de Farias and Anthony Marks – retired by normal rotation. Both directors were re-elected uncontested.
  • A third vacant Director position was contested by Nathan Flowerday and Raymond Sharp. Grower shareholders elected Nathan Flowerday to the position.
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