Craigmore Permanent Crop Partnership approaches close
In 2016, Craigmore Sustainables began fundraising for our new Permanent Crop Partnership with a target of $250m
We are quickly approaching that target and anticipate closing the partnership to new funds in December 2018. The majority of the funds are already allocated to assets under contract for purchase.
The specific opportunity is huge given the expertise our country has in growing and exporting fresh and healthy ‘superfoods’ to the world. New Zealand horticulture is highly competitive in many fruit crops, and importantly, we have the logistical capabilities to ensure high quality fruit arrives in demanding export markets in the very best condition.
The opportunity is also truly global, with demand growing for kiwifruit, apples, avocados among others in both emerging markets, like Southeast Asia, and in traditional markets such as Europe. New Zealand horticulture exports have grown at 7% per annum for 20 years.
Our strategy is to build a diversified business of the best of New Zealand fruit orchards across a range of fruits for which New Zealand already has an established reputation, including kiwifruit, apples and wine grapes, plus emerging crops such as cherries, citrus and avocados.
Investments will include land, trees/vines, buildings and fixed equipment and processing and marketing assets.
A majority of the orchards will be greenfield developments converted by Craigmore from pastoral or arable farming.
Positive land use change has been a focus of Craigmore Sustainables since our initial partnership in 2009 focused on planting marginal hill country into new carbon and timber forests (planting New Zealand’s newest forests during 2010-2012). These forests are now absorbing sufficient carbon dioxide to offset two thirds of the net GHG emissions of a small New Zealand city for the next 15 years.
In a similar fashion, our Permanent Crop business will positively impact regions of New Zealand (Gisborne, Northland, Central Hawkes Bay) through the targeted conversion of lower output farmland into permanent crop horticulture. These projects can be expected to increase long-term local employment and exports per hectare by at least a factor of 10, significantly reduce GHG emissions and nutrient leaching, and enhance biodiversity.
The main barrier to the breadth of land conversion is the regional nature of horticulture (expertise for specific crops tends to be limited to specific regions) and the lack of local equity capital for what are very capital intensive and long-term projects.
In addition, Craigmore is actively looking at opportunities to partner with Māori landowners, and at other, lower impact production techniques, such as organic management.
As with other partnerships launched and managed by Craigmore Sustainables, Permanent Crop Partnership investors must be long-term, passive and accept our strong sustainability values.