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Mike Knowles



Zespri to trial four new varieties

Company's annual general meeting focuses on boosting industry performance in the face of rising costs

Zespri to trial four new varieties

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Leading global kiwifruit marketer Zespri is trialling what it describes as four "very promising" new varieties which, if successful, could be made available to growers within two years.

The Zespri board agreed this week to begin the grower block trials on 30ha of land in New Zealand. Announcing the plans at the company's annual general meeting in Tauranga yesterday, acting chief executive Lain Jager said he expected the company's varietal development programme to be in a position to release further cultivars for grower trials "every few years".

Zespri faces growing competition from an increasing volume of kiwifruit worldwide and from companies looking to develop new varieties of the fruit – most notably New Zealand company Enza, which now markets its own varieties of red, green and gold kiwifruit.

But Mr Jager said the company would not rush into releasing new cultivars. "We have heard the noise, and want to urge growers that we're not releasing cultivars where we have no understanding of their commercial viability," he said. "We are confident that our varieties are best in class and, if they perform as expected, they could be commercially released to the New Zealand industry as early as 2010."

Mr Jager used the AGM as an opportunity to focus on necessary improvements to returns for Zespri Green kiwifruit, which have fallen 17 per cent year-on-year during the past season. "Our analysis showed that the highest earning 25 per cent of Green growers returned on average at least three times per hectare than the average grower," he explained. "Alarmingly, almost 40 per cent of Green growers had a net orchard return of below zero. Clearly, many of them did not have a sustainable business in 2007."

However, despite increasing global volumes, unfavourable exchange rates and rising costs, Zespri continued to grow the volume of product sold in its core markets during 2007, said Mr Jager. Chairman Craig Greenlees also pointed to 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 volumes increasing by 15 per cent over the prior year," he commented.

Despite this achievement, Mr Greenlees said the impacts of foreign exchange, increased price-led competition and rising costs – particularly for 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 subsequent increases in the fuel price. "It requires a relentless commercial and market-focused approach," he said. "There is no room for complacency, only excellence and ever-increasing productivity will cut it."

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