The Time for Capital Planning Is Nigh: Funding the Expansion of New Zealand’s Kiwifruit Post-Harvest Infrastructure

Strong demand continues to encourage the rapid expansion of New Zealand kiwifruit supply. A predicted NZD 750m of capital expenditure (capex) will be required by 2028 in the post-harvest segment (PHS) to accommodate this expansion. Our base-case assumptions indicate that, in theory, the New Zealand kiwifruit sector could fund this capex itself.

Report summary

The PHS will directly borrow from banks, as well as source new equity, which we believe will need to be more than one-third of the forecast capex.

There are numerous potential sources of equity to which the PHS could turn, but we think growers are the most likely source. However, we expect that a good proportion of grower equity would also come from bank borrowings,” according to Hayden Higgins, Senior Analyst – Horticulture. As such, growers will ultimately have to cover the cost of the infrastructure capex required to pack future crop volumes, both directly and indirectly. Consequently, their own costs will rise.

The post-harvest infrastructure expansion is unlikely to be spread evenly across the current PHS participants, potentially opening the door to new entrants. This is expected to bring competition for both procurement of kiwifruit supply and key resources.