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BayWa set to invest in Latin America

Company prepared to back NZ subsidiary Turners & Growers' new strategy by securing additional fruit supply

BayWa set to invest in Latin America

Enza T&G chairman and BayWa chief executive Klaus-Josef Lutz

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NZ fresh produce company Enza / Turners & Growers (T&G) is aiming to invest in the Latin American fruit sector over the coming 12 months as it seeks to expand its sourcing programmes for table grapes, kiwifruit and apples.

Speaking to eurofruit, T&G chairman Klaus-Josef Lutz said the region was very much on the company's radar following the adoption of a new international commercial strategy focused primarily on those core products.

"At this point in time we're talking about Latin America," he explained when asked where BayWa, T&G's majority shareholder, would look to secure new supply as part of that strategy. "It will not be such a surprise if we do something over there."

While declining to go into detail, Lutz suggested that some kind of supply deal in Peru for table grapes, and perhaps also Chile, would be top of the company's shopping list.

"For grape production, Peru especially will be significant. We are working on two levels: first, how can we make sure we get adequate volumes and quality; and second, does it make sense to create joint ventures with either local growers or traders - people who are already more skilled in the grape industry and who have more experience than we have right now."

Lutz also revealed that BayWa had given serious consideration to buying a South African fruit company back in 2011, before it turned its attention to New Zealand and the eventual purchase of T&G.

"We did some research in South Africa nearly three years ago to see if that would be an interesting market to take over a trading company," he said. "First of all, we didn't find the adequate target and secondly I think we have to wait. We are a very conservative and shy company and we check the markets very carefully [to see] what's going to happen in South Africa after Nelson Mandela passed away."

He continued: "The question is, how stable will South Africa be, or do we have a second Zimbabwe? We never invest in countries where we see we are at the egde and that's getting more critical. Nevertheless, South Africa is of course a very important growing area and we are sourcing down in South Africa."

For BayWa, the future for its affiliated growers in Europe, meanwhile, is to consolidate their position in domestic markets while exploring new avenues outside the continent.

German apple growers, for example, could eventually find a reliable alternative outlet in Asian markets such as China and India, for example, said Lutz.

"The priority is to achieve commercial stability through supply chain management, logistics, productivity increase and of course new varieties which have to obey the special taste demands in Asia," he said. "I see the future growth more abroad than in Europe."

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