Global Development Panel, Adelaide May 2017 PMA Hort Connections Conference –
Overview of Costa Business Model Optimised portfolio of selected fresh produce categories: o #1 market position in attractive core categories, backed by vertically integrated farming, packing and marketing operations o Focus on IP and innovation for differentiation – own IP portfolio and network of global relationships o Manage agricultural risk – eg. protected cropping , diverse portfolio, geographical dispersal o 52 week production via geographic reach, varietal mix and agronomic expertise Business Divisions Produce International Costa Farms & Logistics (CF&L) Genetics Farms Bananas Berries Mushrooms Tomatoes Citrus Avocados Berry farming Logistics licensing African Blue Driscoll’s Polar Fresh (Morocco JV) Australia JV JV (49%)²; China JV (50%) ² (50%) (70%) 2 1
Our Australian locations #1 citrus producer in Australia, #1 grower in the growing oranges, mandarins, domestic blueberry and lemons, limes & tangelos. raspberry market, and a world leader in Exports to Japan, California, blueberry genetics China, SE Asia and Middle East and breeding #1 composter, grower #1 grape marketer in and pre-packer of Australia and exports to over NT mushrooms in 20 countries. Australia QLD #1 position in the #1 marketer and ripener of WA domestic snacking avocados in Australia, tomato market, using sourced from growers across state of the art Australia and New Zealand. SA glasshouse Building integrated operations facilities NSW Significant producer in Costa operations Australia, supplying Mushrooms Cavendish and Lady VIC Berries Finger bananas Citrus Tomatoes Avocados Bananas Complementary wholesale Grapes TAS Costa Farms marketing operation and cold- Logistics storage logistics platform Polar Fresh Business Support Center Costa operations include c.3,500 planted hectares of farmland, 30 hectares of glasshouse and six mushroom facilities throughout Australia. Further 252ha of blueberries planted in Morocco, and initial establishment of farming in China 2
International Expansion o Grow our business by seeking opportunities beyond the domestic market. o Utilise our well demonstrated world class IP, including blueberry genetics. o Devote the necessary human resources, including agronomic skills to these projects. o Leverage these valuable elements to build an international business which will become a key profit and growth driver into the future. 3
International Expansion 4
Morocco o African Blue Joint Venture formed in 2007. o Backed by Costa blueberry varieties from Corindi (Aus). o Customer supply flexibility – branded, private label, bulk o At the end of FY2017 African Blue, plus third party growers, will have +350 hectares of blueberries, under protective tunnels. China o Joint Venture formed with Driscoll’s in 2016. o Established two farms so far, with blueberry and raspberry plantings. Aiming for 100 hectares over next 18 months. o Management team mix of local and Australian staff. o Market reception has been very positive on small initial volumes. 5
Key market drivers Morocco o UK blueberry market grew by 28% in 2016. o European demand is growing as consumer preferences change. o Season is six weeks ahead of main Spanish growing regions. Potential to expand season spread. Substrate plantings at Zauoia farm, Morocco o Replacing plants in Morocco after 12 years instead of 8 years. o Highest yield globally. o In three years time (2020) will have +500 ha’s of blueberries. Larache blueberry farm, Morocco 6
o Europe is just waking up to blueberries! o Customer Supply Flexibility o Spread Season (Jan – June) o + 12/15 k Tonnes Morocco – the future Frozen Bulk Private Label Branded 7
Key market drivers China o Demand fuelled by burgeoning middle class, which now numbers 100m+. o Projected demand growth for blueberries to be in excess of 20% p.a. o ‘Super fruits’ gaining market share due to increasing income levels and recognition of nutritional value of berries o Quarter of our sales by e-commerce Initial berry farm at Shiping, Yunnan Province, China 8
o And they love our BERRIES! o 1.5bn people the opportunity o By 2023 + 1000Ha? China – the future 9
Discussion
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