Food and beverage stories
Cherry pioneer says it’s time
Australia’s biggest cherry grower and biggest cherry exporter, Reid Fruits, was offered for sale in July by Expressions of Interest.
Managing Director, Tim Reid, 64, is looking to retire after a stellar career reinventing a family apple farm to create the present booming international business and playing a lead role in opening Asian doors to horticultural exports from Tasmania.
Reid Fruits has 136ha of cherries under cultivation, with current production representing almost 10 per cent of Australia’s entire cherry crop.
The business accounts for nearly 20 per cent of the nation’s cherry exports and Reid Fruits is the biggest Australian cherry exporter into Japan, the Republic of Korea, Thailand and India.
“Reid Fruits has developed a phenomenal reputation in Asia for the quality of our cherries,” Mr Reid said.
“We have our main orchards in the Derwent Valley and in recent years have developed a late-harvest, 36ha orchard at Jericho, which includes 4ha of orchard under a retractable roof.”
The company has recently invested $4.5 million in the Jericho operation and is planning a $3 million upgrade of its packing facility in Huonville.
“The business is now at a stage where we will grow two or three-fold in terms of production,” Mr Reid told the ABC.
“Now is the ideal time for a new owner to come on board and drive the growth opportunities we have created.”
Reid Fruits celebrated its 160th anniversary in 2016.
Mr Reid has dedicated 50 years of his life to the business after starting as a 15-year-old schoolboy stacking boxes part-time in a Huon Valley apple shed.
“My wife and I have reached the stage of life where we think there are other things we'd like to pursue, a bit of time to ourselves. We've worked very hard for a long time.
“There comes a time to step off the treadmill, and I think, for Deborah and I, it’s really good timing now,” he said.
The Reids have four daughters, but Mr Reid said "the girls have all pursued their own careers and they’re happy with their own lots in life.”
Mr Reid was named AM in the Order of Australia and Australian Export Hero in 2007 and Australian Farmer of the Year and Australian Rural Leader of the Year in 2013.
He worked tirelessly in the 1980s and 1990s to overcome Asian barriers to Tasmanian horticultural products, travelling as a focussed and popular member of several State-organised trade missions to North Asia, as well as making many of his own visits.
He oversaw two reinventions of Reid Fruits during his 48 years in fulltime employment.
“In the 1970s we lost the UK market and planted new apple varieties for Asian markets,” he said.
“Then in the late 1990s we transitioned our business to cherries, moving into the Derwent Valley in 2000 with our first cherry orchard.”
He told the ABC he was proud of the contribution the overall cherry industry was making to the Tasmanian economy.
“The amount of money the cherry industry brings into and invests in the State is significant … through agricultural merchandise, packaging, engineering services and farming services … and for the majority, the money we earn is reinvested in the continued growth of our businesses,” he said.
Mr Reid expects the EoI process to be finalised in November and said a buyer could emerge from anywhere.
“China’s a possibility, but I think if there’s a foreign investor it’s more likely to come out of the UK or Europe; North America,” he said.
If an overseas buyer prevails and the price is above a $15 million limit the deal will need Foreign Investment Review Board (FIRB) approval.
It’s unlikely the business would fail to attract bids over the FIRB threshold.
“If we don’t get a reasonable bid for the company, we will keep it going because the market-growth opportunity for the entire industry is very good,” he said.
“The demand for Australian cherries internationally is predicted to have an accumulative annual growth of 31 per cent for 2016-21.
“The market for high-quality, wonderful tasting Tasmanian fruit is already there.
“But the health attributes of cherries and their juice is only just being realised and that will create further opportunities for growth in the Asian market.”
Ernst and Young, who were involved in the sale of the Kidman cattle empire to Gina Rinehart and her Chinese partners, will broker the sale.
“If we don’t get a reasonable offer for the business, we'll look at restructuring the management level, my level, looking at a new CEO and we'll continue the business on for God knows how long,” Mr Reid said.
Tasmania’s biggest berry business, run by the Costa Group, was also placed on the market in July.
Chairman Frank Costa, 76, said: “We don’t have what I would consider the correct strength in the family coming on to take over such a big organisation now. So you’ve got a decision to make and it’s best to make it when you're in control and you're still able to do things as required and we think the timing is pretty good right now.”
The Costa Group, whose extensive national fruit interests include citrus production in the Murray-Darling, has expanded its berry cultivation in north-west Tasmania in recent years, acquiring existing operations and increasing plantings of strawberries, raspberries and blackberries.
Mr Costa said the market for fresh fruit was growing, particularly in Asia, and the company was in a strong position.
Image courtesy of Reid Fruits
1 August 2017, Edition 186