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John Hey

BY JOHN HEY

@john_asiafruit

Costa launches sustainability initiative

Leading Australian group pledges to put “sustainable commercial farming” front and centre in its business

Costa launches sustainability initiative

Costa CEO Harry Debney outlined the Sustainable Commercial Farming programme at the group's AGM

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Leading Australian fresh produce grower-marketer Costa announced the launch of its new Sustainable Commercial Farming objective at its annual general meeting in Melbourne yesterday (22 November).

Costa CEO Harry Debney said the initiative marked the group’s “firm, long standing and formal commitment to make sustainable commercial farming a central element of its business model and practices”.

“This [initiative] is to ensure we not only work for the long term to progressively improve the yield and quality of our products through agronomic practices and strategic investment, but we also accept our responsibility for the environment by focusing on issues, including addressing water security, climate change and waste.”

As part of its commitment to sustainability, Costa also unveiled a new Costa logo and brand at the AGM – Well Grown. “We believe [Well Grown] encapsulates what we mean by more sustainable commercial farming,” said Debney. “Innovating to get more yield from every hectare, while striving for more and better products, with fewer inputs and lower environmental impact.”

Costa has established “three pillars” to achieve its overarching objective – environment, economic and people, which are underpinned by ten sustainable commercial farming principles, Debney detailed. “These principles specifically focus on water use and security; climate change; nutritional inputs; biodiversity; production yield; productivity and efficiency; workforce, community; and health and wellbeing.”

Costa has also established a new Agronomy Group chaired by Debney and made up of key horticulturalists from each of the group’s core produce categories. “The group will play a core role in overseeing the Sustainable Commercial Farming strategy, with a particular focus on agronomic skills, practice and knowledge.”

Reycled water, solar farm

Debney flagged water security and climate change as two of the key challenges the industry faces, and he cited examples to illustrate Costa’s commitment to addressing the issues. 

“A case in point, water use efficiency of our glasshouse grown tomatoes compared to field crops is nothing short of stunning,” said Debney. “It takes an average of 216 litres of water to produce one kg of field crop in Bundaberg, Queensland, compared to approximately 49 litres to produce one kg of crop in Costa’s tomato glasshouses.”

During the 2018 financial year, Costa’s tomato business has invested in a major upgrade to its irrigation drain water capture system and storage capacity at its 20ha tomato glasshouse in Guyra, New South Wales. Debney said the upgrade delivered several benefits, including doubling recycled water storage capacity, reduction in fertiliser inputs and greater water security. “This investment is expected to save up to 22.5 megalitres of water per annum and increase our drain water recycling rate from 70 per cent to 85 per cent,” he noted.

Debney said investment in renewable energy sources was also a key priority in tackling climate change. In its first major investment in the sector, Costa has installed a solar farm at its Monarto mushroom facility as part of its expansion of the operation.

“More than 5,000 solar panels have been installed at the Monarto site and these will generate up to 2,000 kilowatts capacity when the site expansion is completed,” he explained. “The capacity will operate during daylight hours and complement power from the grid.”

Protecting cropping also has a key role to play in addressing climate change, Debney added. Having successfully used protective polytunnels for production of berries in Australia, Morocco and China, Costa has been trialling protected citrus production, he noted. At the group’s Riverland South Australia orchards, Costa has erected more than 24ha of permanent net structures over mandarins and persimmons.

 “Although it’s still early days as to measuring the effectiveness of this type of protected cropping, it has reduced water usage of the protected crop by between 10 and 20 per cent,” said Debney. “Other benefits have included reduced fruit damage from winds, which increases the average quality and price as there is a higher percentage of first grade fruit.”

Improving the productivity of Costa’s harvesting is also a key priority, and the group has implemented a customised Harvest Management System to its berry and mushroom categories, which tracks real time harvest data by individual picker. “For the harvesting of berries and it enables more accurate measurement of yield and harvest efficiency by farming block and variety through harvest cycle,” said Debney. “This real time information on field harvest progress also enables the packing operations to prepare more efficiently for incoming fruit.”

Fiscal outlook

Assessing Costa’s financial performance and the outlook for 2019, Debney said operations continued to perform well and were tracking in line with forecasts given when it delivered its full year results in August. “We reconfirm previous guidance that the transitional half year from July to December 2018 will have lower earnings compared to the same period last year,” he said.

First half 2018/19 earnings are expected to be lower due to a number of factors. These include: a lighter 2018 citrus crop, which resulted in an earlier finish to the season; additional farming costs from the expansion of its African Blue (Morocco) and China businesses, whose harvest periods fall in the following six-month period (January to June 2018); higher depreciation and interest charges; and farm cost investment following the acquisition of Nangiloc Colignan Farms’ citrus and grape operations, where harvest commences in January 2019.

While calendar year 2018 earnings will be lower, Debney forecast calendar year 2019 earnings would grow by around 30 per cent, with earnings heavily skewed towards the first half of the year (January to June).

 

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