Aussie Industry Growth Forecasts

The Australian protected cropping industry is primed for major expansions over 2016-2020. In recent weeks, new start-up Nectar Farms announced plans to invest A$120m over the next four years, creating employment for about 1000 workers in two regional locations. These projects represent a combined glassshouse production area of 80ha and expected to add A$125m p.a. to the regional economy.

According to the company’s principal, Nectar Farms aims to become the leading protected cropping horticulture company in Australia, which in turn will support the country’s food security, promote regional communities through employment, training and innvoation, protect the environment through clean energy and smart technology, and deliver on the promise of Australia as the food bowl to Asia. When complete, the two sites will represent 50% of current large-scale tomato growing glasshouses in Australia.

Also in the mix of major expansions is the Costa Group, Ausralia’s largest grower–marketer of fruits and vegetables who recently announced plans to increase its production area of blueberries, raspberries, blackberries and strawberries, all under protected cropping. The vast majority of new berries will be grown in substrate using technology developed by Costa. The berry growth plan is valued at A$80m over four years, to be funded through cash flow and existing debt facilities. The plan consists of 11 individual projects, including investments in Far North Queensland and Corindi, NSW. This continued growth will cement Costa as the leading technology and market leader in fresh berry production through to 2020. Costa also have major berry production expansions underway in Morrocco and China. Additionally, Costa is a major grower-marketer of truss tomatoes. The company recently completed a 10ha expansion at its Guyra, NSW, glasshouse facility, which is now in full production.

Another coming expansion is a new 2ha state-of-the-art glasshouse in Leongatha North, Victoria. Freshzest, one of Australia’s largest fresh culinary herb growers, currently has 7000 square metres of greenhouses at nearby Pound Creek, and a 1ha glasshouse near Lismore, NSW. This A$4.5m/ha expansion will go before the local shire council in coming weeks and if approved will create 30 permament jobs.

Other expansions in the pipeline include Australian Fresh Leaf Herbs, which is ramping up from 28,000 to 100,000 metre square over the next three to five years.

Unlike many developed countries, no-one can put a precise value on the Australian protected cropping industry, because there is no mandatory system of data collection. There is a statutory agricultural consus conducted by the Australian Bureau of Statistics (ABS) every five years, but it does not capture specific industry information such as area under protected cropping production, commodities grown, farm-gate value, or number of people employed in the industry. Nor are there stats on foreign investment and foreign workers.

The best guess of industry size and value comes from Protected Cropping Australia (PCA), the peak industry body established in 1990 by commercial growers and allied trades. There are no government hand-outs here, where the industry is viewed as self-reliant and creating its own success. The PCA estimates the industry is valued at around A$1.8 billion at the farm gate per annum and equivalent to 20% of the value of total vegetable and cut flower production in Australia (RIRDC report HSA-9A). It is estimated that more than 10,000 people are employed directly in greenhouse horticulture throughout Australia, with the industry expanding at between 4-6% per annum. The PCA estimates the average return on investment is between 5% and 10%, and the potential return on investment for high technology greenhouse vegetable enterprises is around 20-25% per annum. This information is primarily drawn from industry experts involved with various crops and commercial projects.

The next four years may see these estimated stats dramatically revised!  Ω

Steven Carruthers

PH&G March 2016 / Issue 165