Bay of Plenty Business News June/July 2019

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12 BAY OF PLENTY BUSINESS NEWS June/July 2019 Italian expert praises NZ stink bug approach A visiting Italian biosecurity expert has praised New Zealand’s efforts to deal with a stink bug incursion before it happens, putting this country “on another planet” to his homeland. By RICHARD RENNIE Professor Claudio Ioriatti, from the Italian agricultural and horticultural research centre Fondazione Edmund Mach in Torino, recently visited Tauranga as part of an AgMARDT (Agricultural and Marketing Research and Development Trust) sponsored trip. Ioriatti has worked closely with Plant and Food Research staff for 25 years on both countries’ mutual biosecurity issues. The professor said the brown marmorated stink bug was the worst insect incursion northern Italy has experienced in recent years - and this in a country that has averaged two new alien species a year for the past 20 years. It first appeared in significant numbers in 2012, with the region’s plentiful and productive orchards providing a varied food source to thrive, while dwellings offer over-wintering habitat. “The estimated cost now to orchardists and growers in my region Trentino is 150 million Euro a year, so you can under- Every team needs a coach Behind every successful sports team is an experienced coach and business is no different. BeeNZ know this to be true and have partnered with Ingham Mora from the beginning. BeeNZ developed from creating an opportunity out of a problem. In 2005, Julie and David Hayes purchased beehives to pollinate their orchards and by 2015, they had grown to 1200 hives and an MPI certified honey extraction facility. It was at this time they decided to design and build a purpose-built honey processing and packing facility, launch their own premium honey brand and begin exporting their product. The Hayes benefited from the solid value and support they received from Ingham Mora through their business journey from orchards to honey. Since the start of 2019, BeeNZ has participated in financial awareness training with Ingham Mora which has really helped them focus and better understand the big picture around their business and financials. “Having those resources as part of their offerings takes Ingham Mora from just being an accountancy firm to a fully immersed financial and business development partner for our business”. BeeNZ are also tapping into the seminars and coaching services on offer at Ingham Mora as BeeNZ places significant value on the up-skilling and development of their team. If – like BeeNZ - your business needs a coach and direction for the future, give our stand why growers want to control it.” Ministry for Primary Industries estimates are that a stink bug incursion into New Zealand could cost this country $4.2 billion in lost earnings by 2030. To date only isolated numbers of the bugs have been detected. It means when - rather than if - the bug arrives you are in a very good position to deal to it. - Claudio Ioriatti In Italy chemical controls for the bug are limited to only two spray options, and these can only be applied in minimal amounts due to fruit retailer restrictions on spray use. Ioriatti said the silver lining of the bug’s presence was that it moved into urban dwellings over winter, drawing broader attention to its presence, and with that the community desire to do something about its control. He and his colleagues have developed a smartphone app for people to report bug infestations, including taking a photo and loading in location data to make tracking incursions in real time possible. Pheromone traps have proven relatively poor at trapping the bugs. Most orchards now have to be draped in protective netting, proven to be the most effective means of keeping the bugs out as they migrate back to ripening fruit over late spring-summer. But orchardists are also conscious they operate in a heavily touristic environment, where perceptions of Italian countryside do not always accommodate unsightly artificial netting. “We are selling our landscape to five million visitors a year here. Tourism is 15 percent of our region’s income, so using the netting is really something we would like to avoid.” The challenge to researchers like Ioriatti is compounded by Italian laws that prevent the introduction of a non-native species to control an embedded pest like the stink bug. New Zealand authorities have approved the introduction of a known stink bug parasite, the Samurai wasp, which can be released immediately should team a call to discuss how we can futureproof your business model, identify and solve issues and achieve the results you want. Level 2, 60 Durham Street Tauranga 3144 07 927 1200 www.inghammora.co.nz Professor Claudio Ioriatti: recently addressed biosecurity experts in Tauranga. Photo/Richard Rennie. a stink bug outbreak occur here. “It means when - rather than if - the bug arrives you are in a very good position to deal to it,” he said. “We are required to find a native enemy in Italy and have a parasite species, but unfortunately the parasitism rate is only 17 percent - it’s too low.” Researchers are studying their options, which also Strong growth in volume and value across all kiwifruit categories in the completed season has resulted in Zespri reporting operating revenue from global sales and licence release revenue exceeding $3 billion for the first time. Zespri chair Bruce Cameron says growers and their communities are benefiting from increasing demand for Zespri kiwifruit and from the industry’s growth to drive and meet that demand. “Consumers around the world are increasingly embracing healthier products and want more of our kiwifruit because they know it is a convenient way to get their daily nutrition and because it tastes great,” said Cameron. The results reflect continued strong international demand, with Zespri selling a total of 167.2 million trays of kiwifruit in 2018/19, a 21 percent increase on the 138.6 million trays sold in the previous season. Revenue generated by global kiwifruit sales and Sun- Gold licence release increased by 26 percent to $3.14 billion. Total fruit and service payments (including the loyalty premium) to New Zealand growers was up 24 percent to $1.82 billion, while average orchard gate returns to growers increased by 6 percent to $63,622 per hectare for Green Kiwifruit, by 28 percent to $145,991 per hectare for SunGold, by 40 percent to $73,350 for Green Organic and by 14% to $44,549 per hectare for Sweet Green. Cameron said increased volumes of both Green and SunGold Kiwifruit Zespri sold last season had driven record average returns per hectare for both categories. While Sun- Gold also returned record levels per tray, Green returns per tray were down slightly because of higher-than-expected volumes which led to an extended sales window and associated increases in quality costs. “The sustained growth of the industry is really encouraging and the increase in average returns is helping growers meet increasing operational costs including labour,” he said. “Zespri’s ongoing success include the use of Sterile Insect Technique. This involves releasing overwhelming numbers of sterile male insects into the wild to mate with females, with no offspring produced. “This is a potential tool for us as we await the opportunity [to introduce] the right parasite.” Ioriatti said he was deeply impressed by the level of biosecurity awareness projects like the Better Border Biosecurity project launched in Tauranga has brought, and the ability of policymakers, communities and scientists to work together on biosecurity issues. “Sooner or later the stink bug will arrive here, but you can use this time you have to take a sustainable approach to deal with the incursion.” Zespri operating revenue exceeds $3 billion reflects the important partnerships we have and continue to build with our customers, distributors, post-harvest operators and growers, and is a strong endorsement of our 12-month supply strategy and ambition to market the world’s leading portfolio of kiwifruit year-round.” Licence revenue and royalties boost earnings Zespri’s net profit after tax increased to $179.8 million from $101.8 million in 2017/18, reflecting the strong season results This was boosted by revenue from the ongoing SunGold licence release programme and increased revenue from new cultivar royalties. Gross revenue of $192.6 million was generated by the 2018/19 round of SunGold licence release – the second in a five-year programme of annually releasing 700ha of SunGold conventional and 50 ha of Sun- Gold organic licence to New Zealand growers (subject to annual review). Zespri charges a royalty of three percent to licensed growers, which is split between Zespri and Plant & Food Research. Zespri’s share of royalties was $28.4 million, an increase of 37 percent from the previous year, reflecting both higher volumes and value earned on sales this season. The total dividend per share in the 2018/19 financial year is expected to be $0.92 versus $0.50 in 2017/18. These dividend figures take into account the impacts of the targeted share issue/buy-back and three-fortwo share split transactions during the financial year which were aimed to better align the ownership of shares with Zespri growers. Outlook for 2019/20 Zespri chief executive officer Dan Mathieson said strong growth was forecast again this year. “We’re very pleased with the progress made in the 2018/19 season, but as always we’re focused on doing better, delivering the world’s best kiwifruit to consumers and creating more “We’re also broadening our sales channels and getting closer to the consumer to help us understand what they want and what we can do better.” - Dan Mathieson value for our growers, and all of our partners. Our ambition is to help drive greater value through growing new markets and increase our penetration in existing ones.” Mathieson said Zespri was continuing to see strong growth in its largest markets, including Japan, China and Spain, and making real progress in newer ones like the US. “We’re also broadening our sales channels and getting closer to the consumer to help us understand what they want and what we can do better, and focusing on improving our environmental and social impact which is an important part of our purpose and brandled strategy,” he said. Zespri is expected to release additional details on its 2018/19 season when its annual report is released in late June. - By DAVID PORTER
Packhouse takes lead with robotics As the kiwifruit picking season met its frenetic peak in late May, Apata Group managers were busy monitoring key robotic technology just commissioned to help deal with the growing challenge of staffing in the sector. By RICHARD RENNIE This season marked a significant first for some state-of-the-art technology installed by Apata Group, one of the region’s leading post-harvest operators. It is the culmination of more than $15 million spent in the past few years upgrading its packing facilities. Production manager Hans van Leeuwen said close liaison between two key European fruit sorting and packaging companies - Maf Roda of France and Niverplast of the Netherlands - has delivered Apata with some bespoke equipment. The technology was the first of its kind in kiwifruit processing anywhere in the world, he said. “Some of this technology has been employed in other areas, like apple packing, but they are very excited about the opportunities on offer here in New Zealand with kiwifruit.” The company’s Mends Lane pack-house east of Te Puke has had two high speed sorting systems running for the past three years, each capable of checking and grading 7000 trays an hour. Using leading-edge near infra-red camera technology, the lines photograph each piece of fruit with a dozen different light spectrums, determining quality parameters including brix levels, dry matter and flesh colour. Algorithms can then calculate what grade that fruit is, based on the behaviour of the light spectrums hitting the fruit. Weigh technology can weigh 60 fruit a second 30 times for weight accuracy to one tenth of a gram, before splitting it off onto packing benches. For us it is a case of focusing on what we can do on the floor, and re-allocating that finite resource of people to picking. - Stuart Weston However, in light of growing crop volumes and evertightening labour supply, the company was looking to push automation and robotics further down the packing line, into the labour intensive areas of folding, packing and sealing fruit cartons. In past weeks van Leeuwen and his colleagues have been overseeing the commissioning of a Maf Roda robotic packing machine. In what van Leeuwen said was a world first, the machine has been developed to pick up the required number of kiwifruit via air suction and gently place them in their single layered flat tray, in amounts ranging from 24-34 per tray. “Our best packer will do three trays a minute, the machine will do 22.” Meantime the larger 10kg bulk boxes are now also packed by robotic box fillers, which allocate the correct weight of fruit, level it off and seal the box up before finally placing a full traceability label on its side. “Even the labelling, which may seem a simple enough job, is hard to do manually in a repetitive consistent way. It is some of these small changes that soon add up.” Van Leeuwen said the two key priorities for robotic use were to increase packing speed within the typically limited space constraints that every pack-house had. Apata Group production manager Hans van Leeuwen, and site manager Nav Singh at the company’s Mends Lane packhouse. Photo/Richard Rennie. Improving productivity “We are finding these machines offer us a compact footprint. And while it is early days, productivity is promising.” He and Apata Group chief executive officer Stuart Weston stressed the technology was not putting staff out of work, but rather giving the company the opportunity to reallocate the positions. “For every worker in the orchard there are 2.5 in the pack house. So for us it is a case of focusing on what we can do on the floor, and re-allocating that finite resource of people to picking,” said Weston. Automation is playing out in two arenas within the industry at present, within pack houses and on orchards with the design and construction of autonomous harvesting platforms developed by Tauranga company Robotics Plus. Weston said all post-harvest processors are facing the same issues of labour constraints, with the overheads in securing and housing labour quite prohibitive. “We are told we will need about another 6000 in coming years, and no one really seems to know where we would get them from, and where we would even house them.” He said the industry had three key capital-intensive areas competing for funding as fruit volumes continue to grow. These are automation, staff accommodation and cool store facilities. “This pack house [Mends Lane] is something of a beta test bed for new technology,” said Weston. “If we can get the pack house operating on a true 24/7 basis using this technology, we stand to increase its productivity by 50 percent.” BEWARE OF FOREIGN IMITATIONS. There’s no shortage of great ideas in New Zealand. But for an innovative bunch, we’re not the best at realising the full potential of our innovations, particularly when exporting them. At James & Wells, we can identify your competitive edge, offer business strategies for specific markets and help you own and leverage your intellectual property to ensure no one steals the fruit of your labour. www.jaws.co.nz | +64 7 928 4470
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Bay of Plenty Business News June/July 2019

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