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Mainland has sold 650 hectares of land to an Australian investor and intends to use the deal to fund expansion in a market screaming for eggs.
The Overseas Investment Office has approved the sale of 650 hectares of land owned by Mainland Poultry to Australian property investor CorVal Partners.
The sale will help fund Mainland’s expansion efforts. Mainland is owned by Indus Valley, which operates the egg operation under the Zeagold brand.
The sale was for nine parcels of land spread across sites in Otago, Canterbury and Waikato.
According to a Land Information New Zealand (LINZ) decision, CorVal Partners would lease the land back to Mainland on separate triple net leases for initial terms of 30 years.
Chief executive of Zeagold Nutrition John McKay said the sale and leaseback allowed the business to continue investing strongly in New Zealand egg production alongside a highly aligned capital partner.
McKay did not confirm the value of the deal.
New Zealand has been plagued by an egg shortage, with Egg Producers Federation director Michael Brooks saying in May the country had about 3.5 million egg laying hens, but needed about 3.8 million to assure a constant supply of eggs.
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“To get laying hen numbers up would take months, because a chick that hatched today would not lay eggs for another four or five months,” he said.
McKay said the sale and leaseback deal included 11 properties, covering egg-laying farms, grading and processing facilities, distribution centres and feed mills.
“Our strategy will be to continue to invest in new cage-free farms and technology producing a good range of high quality, affordable nutrition for New Zealanders.
“We will continue to farm and serve our customers as we always have, with renewed focus on growing our farm network with the construction of the new Huirimu free-range egg farm in Wharepapa and allocating capital to future farms,” McKay said.
The LINZ decision said Mainland “wishes to release the capital tied up in the ownership of the land to support a greater level of growth in the business.
“The land is currently used for all aspects of shell egg and animal feed production and distribution. The Applicant (CorVal Partners) intends to fund the next stage of the vendor’s development of the Huirimu site.
“The investment is intended to create New Zealand’s largest free-range egg laying facility with capacity for 240,000 laying hens and 80,000 rearing hens.
“The main benefits to New Zealand are likely to include at least $12 million in capital expenditure developing the Huirimu site, the creation of 40 full-time positions for an 18-month period, during the construction of the next phase of development on the Huirimu site and additional environmental protections in respect of the Huirimu site, the Hillgrove site and the Orini site,” LINZ said in the decision.
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