Welcome to 2016
We are back. 2016 is here. Our team is completing a very successful avocado program, the kiwiberry harvest is a few weeks away and before the dust settles we will be heading into our New Zealand kiwifruit harvest. Harvest of pears has been underway for a few weeks already in Australia.
It has been a successful start to the year – our export avocado orchard gate returns are approaching $30 per tray which will be a record for Seeka. In spite of all predictions the dry summer typically associated with the El Nino weather pattern hasn’t eventuated, and the growth of both our kiwiberry and kiwifruit look tremendous. We have been reshaping our estimates as a result.
As we anticipate the forthcoming kiwifruit season and the drive for fruit size, quality and taste, we also recognise the need to have a population of fruit that stores and presents well later in the season. With an anticipated large volume of Hayward fruit, and a dramatically larger volume of Zespri SunGold, the Industry needs fruit which stores well for sale later in the season. In previous years Seeka Growers offered an innovative non-autumn-trunk-girdled pool to its growers. This pool of fruit stored well, delivered lower fruit loss and required less condition checking and reworking than the main pool. However, with the drive for taste, decreasing time premiums and increasing on-orchard costs, the volume of non-autumn-trunk-girdled fruit has dwindled.
Seeka will release its 2016 pricing in the middle of February and part of the pricing formula will be a rebate paid by the corporate focussed on non-trunk-girdled Hayward fruit that is held later in the season. In this way we hope to reward our growers who deliver some of their crop groomed for long term storage and encourage them to deliver us some of this fruit.
Key Updates below:
Capital Capacity Projects well underway
KKP – Seeka has purchased the 1.1 hectares of land between the existing KKP Packhouse and the new Eastern Highway with construction already underway for 1.02M trays of static coolstorage along with a new pre-cooling capacity of 70k trays per day. This build effectively doubles the onsite coolstorage at KKP and consequently appropriate changes are being made to the fruit (truck) flow onto and off the site. Supermac are running this build.
Main Road – Seeka is building extra coolstore capacity at Main Road KatiKati on our existing land at the rear of the site adjacent to the Squash Club. This project will see additional coolstorage of 528k trays of static and 50k trays per day of precooling. Trucking onsite is also being changed to take advantage of new loadout areas which include container docking facilities included in the new build.
Plastic Bins – Seeka has purchased 9000 additional plastic bins ahead of the current season. This will see Oakside 100% plastic [outside of CA bins] and 4000 plastic bins deployed to Huka Pack. We are well on our way to being 100% plastic in 24 months’ time.
Crop Estimates
|
|
Seeka |
Industry |
|
Hayward Conventional |
19.0m |
85.0m |
|
Hayward Organic |
1.0m |
4.0m |
|
Zespri Sungold |
8.0m |
48.5m |
|
Zespri Sweet Green |
210k |
1.5m |
|
Total |
28.21m |
139.0m |
Our estimate of 28.21M trays compares with the 27.5M trays we packed in 2015. Our teams are carefully working through our capacity plan noting that we are also expecting extra shipping in 2016. But we will have spare capacity and we believe that is important in this coming season. Seeka also has recruited 25 more permanent employees in our post-harvest teams.
Shift times have been adjusted with more shifts added and we believe that we have got the optimum configuration to handle the crop ahead of us in 2016.
Insurance Update
The Insurance process around the extraordinary fruit loss associated with the Oakside fire has continued through the break following a face to face meeting held prior to Christmas. The insurance adjusters arranged for a refrigeration engineer to review the Seeka coolchain process including coolstores at Oakside, KCG, Moss , Pioneer, Huka Pack and Totara Street. While he is still completing his report we are not aware that it will contain anything untoward [which is a good thing as it means that the management of the fruit was not likely to be a significant contributing factor in the loss]. We have also provided further outstanding information to the insurance adjusters’ analysts and expect to have further reports back from them next week. Once we have them we expect to hold a meeting with the insurer to resolve the insurance claims. We understand it has taken considerable time and we apologise for that – it has taken a huge effort involving a large amount of work to enable us to reach this stage.
Collaborative Marketing outcomes
Seeka was pleased to have its collaborative marketing applications for Wilkins fruit into Shanghai and Hayward to Malaysia approved, but we are disappointed that our innovative applications to Hainan Island and Urumqi were rejected. The Industry needs innovative collaborative marketing applications to deliver incremental returns to growers. Programs like the Hainan island proposal that combine offshore packing with the use of existing vacant offshore coolstores test conventional thinking and have the potential to add value right across the industry. We can avoid inefficient expensive capital spend in New Zealand and deliver lower costs to growers. We believe the process around collaborative marketing needs to be urgently reviewed, overhauled and modernised, and reset to a fairer process that delivers equitable outcomes while encouraging positive innovation for the good of the industry. All growers would benefit.
Changes in our technical team
We are pleased to announce that Jonathan Dixon has been appointed to lead our Technical Team following Murray Judd’s retirement prior to Christmas. Murray has contributed significantly to Seeka and its growers and in particular through the height of the PSA outbreak. His independent thought and near unique ability to translate complex issues into presentations that everyday people can understand and then convert into action, is much admired. We thank Murray for his efforts, and are also thankful that he remains as a consultant to the industry and Seeka. Jonathan joined Seeka having headed up the technical effort of the Californian Avocado Commission and has more recently led our avocado team. The support team around Jonathan remains in place and Lynnaire Avers has been appointed to lead our avocado business.
Regards
Michael
