Scales Corporation has agreed to sell two Hawke’s Bay apple orchards to a Craigmore Sustainables fund of overseas investors for $34 million, subject to Overseas Investment Office approval.
The Te Papa and Blyth orchards total 186 hectares of planted area.
Applicable fruit, of varieties not specified but thought to be Fuji and Royal Gala, will be supplied for packing and marketing to the Scales subsidiary Mr Apple, one of the largest orchard businesses in New Zealand.
In addition, to assist with orchard transition, Blyth orchard will be leased back to Mr Apple until the end of the 2027 season and Mr Apple will provide short-term management services for the Te Papa orchard.
Scales managing director Andy Borland said the sale of two orchards will have a $4 million earnings reduction, but the Scales purchase from Bostock announced in May has added $10-$12m in the medium term.
Scales bought 240ha of owned and leased Bostock orchards with a high concentration of Dazzle variety, to lift its proportion of premium varieties like Dazzle, Posy and Pink Lady.
During 2023, in a season drastically effected by Cyclone Gabrielle, Mr Apple made $15m earnings, but in prior years the range had been $40-$50m.
