Overseas investment decision for case 201520020 - Harbour Edge Avocados Limited

An overseas investment in sensitive land, being the Applicant's acquisition of a freehold interest in 404.6036 hectares of land at 458, 459 & 525 Okahukura Road, Tapora, Auckland.

Consent for the Applicant to give effect to an Agreement for Sales of Shares dated 22 July 2015 through which a company called Southern Paprika Limited, an ‘overseas person’ under the Act to which the Applicant is ‘associated’ under the Act, will become a 50% owner of the Applicant, with the Vendor continuing to own the other 50%.

After the share acquisition, Southern Paprika Limited will become 50% owner of the Applicant.

The Applicant’s purchase of an approximately 405 hectare dairy farm on the Okahukura Peninsula in Tapora on the Kaipara Harbour in Northland is intended to enable the Applicant to progressively convert the Land into an avocado orchard. The Land meets key soil type and climatic criteria for successful, consistent avocado production. The Applicant estimates that 295 hectares (approximately three quarters of the Land) is able to be planted in avocados by the end of FY2020/21.

Once developed, Southern Paprika will sell avocados on the export market as well as domestically, with the Applicant anticipating exporting 90% of all avocados produced on the Land by FY2026/2027. Avocado consumption globally has been growing steadily year on year and there are particular global markets identified as having strong growth opportunity (namely Japan, Korea, India and China).

The remaining parts of the Land not suitable for avocado orchard will eventually be converted to other horticultural uses.

The overseas investment transaction has satisfied the criteria in section 16 of the Overseas Investment Act 2005. The 'substantial and identifiable benefit to New Zealand' criteria were satisfied by particular reference to the following factors:

Overseas Investment Act 2005
17(2)(a)(i) – Jobs
17(2)(a)(iii) – Increased export receipts
17(2)(a)(iv) – Added productivity
17(2)(e) – Walking access

Overseas Investment Regulations 2005
28(e) – Previous investments
28(j) – Oversight and participation by New Zealanders