The cul­ture of car­ing

Wealthy, healthy and free – a M-aori trust break­ing all norms.

The Orchardist - - Profile - By Denise Landow

Tau­ranga-based Ngai Tukairangi Trust is this coun­try’s largest M-aori grower of ki­wifruit with 100 hectares of Gold and 25ha of Green – mak­ing it one of the top five grow­ers by area.

With pro­duc­tion build­ing up to 2,000,000 trays an­nu­ally the trust sees it­self as an ex­em­plar for other M-aori grow­ers to fol­low. As a for­mal en­tity it’s been in op­er­a­tion for more than 30 years. Just seven years ago it was val­ued at $30 mil­lion but to­day it’s worth more than $126m and the fig­ure is ris­ing.

“When an en­tity gets to be worth around $35m it’s usual prac­tice to evolve to an ac­cepted cor­po­rate struc­ture model,” said its chair, Ratahi Cross. “We’re head­ing up to $150m and we’re still a M-aori trust board. When peo­ple say ‘M-aori trust boards can’t work’ that’s not true be­cause we epit­o­mise that they can.”

Ngai Tukairangi’s an­ces­tral lands are set on the shel­tered and sunny Mat­apihi Penin­sula in Tau­ranga-Moana’s har­bour, but last year saw the sig­nif­i­cant ad­di­tion of four or­chards in Here­taunga, Hawke’s Bay. Those 60ha of Gold more than dou­bled the size of the trust’s ki­wifruit op­er­a­tion, but it’s not stop­ping there. Mem­bers are in­ves­ti­gat­ing the pro­cure­ment of or­chards in other parts of the world with Ratahi say­ing that in Cen­tral Italy’s Latina re­gion, 50ha is cur­rently sell­ing for around $2m. “Latina has a favourable cli­mate for ki­wifruit and the em­ploy­ment re­la­tion­ship be­tween the Ital­ian gov­ern­ment and the in­dus­try is healthy,” he said.

“There are good in­cen­tives to be grow­ing there and Ze­spri will al­low con­ver­sion to G3 for free.”

Trust representatives vis­ited Italy in Septem­ber for an ex­ploratory tour and met with the Ital­ian owners to dis­cuss op­tions re­gard­ing leas­ing land as a solo en­tity or in joint ven­tures with lo­cals. Ratahi said a North­ern Hemi­sphere op­er­a­tion would be good to en­hance Ze­spri’s G3 stock on a 12-month ba­sis, rather than cur­rent the six-month pe­riod. That would meet its vi­sion to sup­ply all year round, and the lo­ca­tion is right at the doorstep of Euro­pean mar­kets.

The trust is long-term in­vestor in ki­wifruit so has to look at the higher yield­ing op­er­a­tions, which are more ex­pen­sive to buy. Its Hawke’s Bay pur­chase was not cheap but the abil­ity to con­vert the four op­er­a­tions into pre­mium or­chards would be achieved more rapidly.

“It would not be un­re­al­is­tic for us to ex­pect an in­come of around $8m a year off the Here­taunga or­chards which is fan­tas­tic earn­ing,” he said.

Back at head­quar­ters in Tau­ranga, this pur­chase al­lowed or­chard man­ager of 30 years, Colin Jenk­ins, to be­come gen­eral man­ager. Newly-em­ployed, An­drew Wood took over the Mat­apihi op­er­a­tions and Richard Pen­treath was given the se­nior or­chard man­ager job in Hawke’s Bay.

MAS­SACRE

The hapu was, in a way, born out of fire. Ngai Tukairangi’s an­ces­tors, based where Tau­ranga’s CBD is now, fled a bloody

mas­sacre by Hau­raki-based tribes more than 100 years ago. The sur­vivors swam across the har­bour to the safety of the Mat­apihi Penin­sula.

About 100 years ago the hapu de­cided to build its own eco­nomic base with large marakai (gar­dens). As well as feed­ing their own peo­ple, these en­trepreneurial grow­ers traded around the Bay of Plenty and be­came rea­son­ably wealthy.

“We were good at both grow­ing and util­is­ing what we had,” he said.

“This penin­sula was our only land so we had to turn it into some­thing good.”

A quick jump to the 1980s and Ratahi’s fore­bears re­alised with their dairy farm­ing ac­tiv­i­ties that ur­ban­i­sa­tion was head­ing their way and their land could eas­ily be re­zoned res­i­den­tial. They be­gan re­search­ing other op­tions.

“Bear in mind the land’s own­er­ship had been frag­mented any­way, af­ter be­ing split by the Na­tive Land Court’s de­ci­sion to par­cel out 10ha lots to fam­i­lies,” he said. “Our fore­bears knew that this frac­tious prac­tice could cre­ate loss of land in sit­u­a­tions where out­siders would of­fer money and end up tak­ing all the best spots.

“Many de­cided to join their blocks to­gether again and cre­ate a good in­dus­try that also safe­guarded against the loss of whanau land.”

Chi­nese goose­ber­ries, as they were then known, had more po­ten­tial to safe­guard the land, rather than be­ing an ac­tual in­come earner.

“We didn’t think it was a great money spin­ner but it was a way of cover­ing our land with green­ery to stop ur­ban sprawl – that’s why we went into ki­wifruit.” At the time, the Gov­ern­ment’s Depart­ment of M-aori Af­fairs sub­sidised M-aori to grow ki­wifruit, so like ev­ery­body else at the time, they grew Hay­ward and ploughed through some pretty bad times.

“Ba­si­cally, New Zealan­ders did not know how to grow ki­wifruit,” he said.

“We were stum­bling around in the dark – pro­duc­ing some re­ally good fruit – and some re­ally bad fruit. We were the first M-aori grower of ki­wifruit in the coun­try, and the first to grow Gold. Un­like our com­peti­tors who grew big solely to max­imise their re­turns, we grew big be­cause we just wanted to keep the land cov­ered.”

Ratahi said the se­cret to Mat­apihi Penin­sula’s pro­duc­tion is the land’s geother­mally-heated and rich vol­canic soil, high sun­shine hours and abun­dance of wa­ter. But the trust didn’t es­cape in­dus­try down­turns and was $2m in debt back in the late 1980s.

“My mum and the older peo­ple had a re­ally scary time,” he said.

“They were fright­ened but we had nowhere to go – we ei­ther stuck with ki­wifruit or pulled it out, which would have us pay­ing back the mil­lions out of their pen­sions and widows’ ben­e­fits, only to spend the rest of their days in debt.”

Around that time, some­thing of a saviour in the form of a young, ea­ger and de­ter­mined or­chard man­ager, Colin Jenk­ins, came along and im­plored the trust to give him a go. Af­ter 30 years, he’s as pro­gres­sive as he was then with Ratahi de­scrib­ing him as a per­fec­tion­ist with phe­nom­e­nal ideas.

“He’s just what we needed,” he said.

“With­out even know­ing, Colin was the fore­run­ner of good man­age­ment in the ki­wifruit in­dus­try. Ev­ery­thing he ever did, and still does, is top level. Peo­ple come here to copy us and get Colin’s ad­vice, right down to whether you cut or crush the tips off buds.”

The trust quickly bounced back and the moun­tain of debt was re­paid within 10 years. By the 2000s, the group was earn­ing healthy in­come and prof­its ac­cu­mu­lated in the bank. “M-aori are con­ser­va­tive, es­pe­cially about spend­ing money; they’d rather see it in the bank, so our bal­ances just grew and grew,” he said.

“We had sev­eral mil­lion just sit­ting there. We were eq­uity wealthy but poor in busi­ness be­cause we didn’t see our­selves as in­vestors.”

Know­ing things had to be turned around, a for­mer chair, Ma­haki El­lis, de­clared the trust would start spend­ing, but he re­mained cau­tious about tak­ing higher risks. The first big spend was the pur­chase the Huka Pak plant at Mt Maun­ganui. This in­volved 19 other M-aori trusts that had al­ways strug­gled to get their own fruit into pack­houses. Ratahi said M-aori grow­ers are unique in that they are early start grow­ers be­cause the only land they hung onto when it was di­vided up was the ‘sun­shine land’, ideal for grow­ing early prod­uct.

“In those days pack­houses were all about mates,” he said.

“You took care of your mates first and ev­ery­body else next – vol­umes were built that way. So we de­cided to build a pack­house for a max­i­mum of five mil­lion trays. We were only about two mil­lion trays so we had to look for partners.”

One of El­lis’ clever ex­pan­sion ideas was to sell Huka Pak to Seeka and by do­ing so, pick up a share­hold­ing.

“This en­abled early start grow­ers to ac­cess post-har­vest fa­cil­i­ties all at the same time be­cause Seeka had a wide va­ri­ety of pack­houses from Te Puna to Te Puke,” Ratahi said.

“In­stead of hav­ing to line up a Huka Pak, they could all get in at the same time.”

Huka Pak has 16 per­cent of Seeka’s share­hold­ing, mak­ing it the largest NZ share­holder. “So overnight, M-aori be­came the largest share­holder of the largest ki­wifruit grower and the sec­ond largest post-har­vest oper­a­tor in the coun­try.The Seeka share­hold­ing also pro­vided a div­i­dend that our share­hold­ers never got be­fore.”

The share­hold­ing guar­an­teed Huka Pak a seat on Seeka’s board, which ex­panded Ngai Tukairangi’s in­flu­ence through

the post-har­vest sec­tor and rep­re­sented a huge growth phase dur­ing El­lis’s ten­ure. His pass­ing eight years ago was the open­ing for Ratahi who is the trust’s long­est serv­ing chair to date, over which time it’s made $100m.

“It’s not too bad, eh? It’s a re­ally good story.”

OWNERS – NOT BEN­E­FI­CIA­RIES

The board and man­age­ment are proud they do things dif­fer­ently and have core prin­ci­ples that guide ev­ery de­ci­sion. The trust has 1650 share­hold­ers and the whole hapu num­bers around 5000. The over-arch­ing pri­or­ity is whanau – the trust is op­er­ated as a fam­ily-run busi­ness, and the care and stew­ard­ship of whanau in­ter­ests and as­sets are han­dled with the utmost care. It’s all about re­spect.

“We don’t call our peo­ple ben­e­fi­cia­ries – they’re the owners,” said Ratahi.

“Even if you are 0.001 per­cent share­holder, you’re an owner. You’re a multi-mil­lion­aire and this is your busi­ness. All I want for our peo­ple is to feel great about them­selves and they’re al­lowed to be be­cause they own this.

“They can say to any­body, as a fact, that they own a $125m busi­ness, which in turn owns the largest share of a $300m busi­ness, the ninth largest share­holder in Ze­spri, which is a $600m busi­ness. Those are mine – I own them!

“They don’t need to dis­close they may be a share­holder of only a few shares. Ir­re­spec­tive of the amount of share­hold­ing you have, you share the good­ness that’s in there – that’s the big­gest gem.”

The board is not one to make rash de­ci­sions and knows its whanau’s eyes are watch­ing ev­ery move. The one day of the year that any board should be fear­ful is the an­nual meet­ing, Ratahi said, “be­cause within our fam­ily, if they’re not happy with you, they will re­place you”. “If the ma­jor­ity of my fam­ily said to me, ‘Ratahi, I’ve had enough of you, it’s time you stepped down’, I would stand down im­me­di­ately be­cause that’s the power there.

“Ev­ery sin­gle one of our whanau should know how this busi­ness works be­cause they’ve got to run it the same way. We are guided by M-aori Tikanga, which is based around col­lec­tive strengths of cus­toms, ethics, thought, en­ergy, and wairua – our spir­i­tual col­lec­tive­ness. These drive us, and they drive our suc­cess.

“There’s noth­ing bet­ter than mak­ing money and hav­ing your fam­ily smile at you at the an­nual meet­ing,” he said.

“It’s got noth­ing to do with money, it’s about be­ing ac­knowl­edged as be­ing ‘a good guy’.”

Ratahi couldn’t be prouder of his board which in­cludes; Dr Riri El­lis, deputy chair, Carlo El­lis, who man­ages the M-aori Ad­vi­sory Group for the Tau­ranga City Coun­cil, Josh Te Kani who is head of op­er­a­tions at Te Ru­nanga o Ngai Te Rangi, Ngawa Hall, who works for Te Puni Kokori as a re­gional man­ager, and He­len Te Kani and Neil Te Kani. Ratahi de­scribes Neil as a great state­man of ki­wifruit for M-aori, with a wealth of knowl­edge. His fa­ther, Wipir­era Te Kani, was a for­mer trust chair and re­spected leader.

“I’ve got a board of fan­tas­tic lead­ers, and be­cause of those fun­da­men­tal val­ues we have, we ac­tu­ally get on with the job, even though as in­di­vid­u­als, we’re re­ally com­pet­i­tive – and that’s a good thing,” he said.

“As an in­di­vid­ual on our board, you present your ideas but ev­ery­one will test those ideas. We thrash them out, and if it’s not good, we’ll throw it out, no mat­ter who you are. I could have an idea, but if it’s rub­bish, it’s rub­bish. You’ve got to have ro­bust de­bate go­ing on.”

FAM­ILY MAGIC

Be­ing a fam­ily is the magic that makes it work, he said.

“Like all fam­i­lies, when broth­ers and sis­ters are around the ta­ble and we scrap like any­thing. But around our board ta­ble, if we all de­cide that some­thing’s worth buy­ing, we all pitch in.We do that more of­ten than not, and that makes the dif­fer­ence.”

One of those great leaps of faith and con­fi­dence was the Here­taunga pur­chase and it re­mains one of this coun­try’s largest or­chard pur­chases.

Ratahi ad­mits the trust went into Hawke’s Bay with some trep­i­da­tion. A num­ber of board mem­bers were ini­tially

“Its Hawke’s Bay pur­chase was not cheap but the abil­ity to con­vert the four op­er­a­tions into pre­mium or­chards would be achieved more rapidly.”

“Ratahi’s team doesn’t be­lieve be­ing so open is giv­ing away se­crets, but that its tried and tested path­ways to suc­cess are things to share to boost de­vel­op­ment else­where.”

op­posed to the pur­chase be­cause it rep­re­sented a huge ex­ten­sion of the trust’s eq­uity-debt ra­tio, and cre­ated a risk port­fo­lio com­prised to­tally of ki­wifruit. The ma­jor­ity cham­pi­oned the fact they were a ‘ki­wifruit fam­ily’ and didn’t grow any­thing else, with the crop mak­ing up 92 per­cent of its busi­ness.

And the trust had a huge im­pact dur­ing Psa’s dark­est hours when it de­cided to buy the old Baylis or­chard on No. 3 Road, Te Puke. “When Psa hit ev­ery­body wanted to sell their or­chards – you couldn’t give them away. How­ever, that’s when we went out and pur­chased, even in those places no­body wanted to touch.” Ratahi re­mem­bers for­mer Ze­spri chief ex­ec­u­tive, Lain Jager, ad­mit­ting the pur­chase halted a lot of flight from the in­dus­try. “That made peo­ple stop and think, ‘hang on a minute – why are they buy­ing up or­chards and still in­vest­ing in the in­dus­try?’” The trust lost all its old Gold, but with money sit­ting in the bank, en­tire or­chards were re­placed with G3 im­me­di­ately.

So why did the trust buy more or­chards at the time?

“Some­times, busi­ness is about the toss of a coin,” he said.

“Be­fore the toss, you chose which side of that coin rep­re­sents a cer­tain path.

“Bear in mind that Green re­ally wasn’t that af­fected by Psa and we had a lot of Green. Or­chards we were look­ing to buy were Green, and it looked hardy, so Green got the head side, while Hort 16A got the tails side. New Gold strains were in de­vel­op­ment but we thought Green was still a good fruit.The coin toss came up heads and we went with it.”

SUR­VIVAL EVENT

“It was a “sur­vival event for us,” he said.

“We did noth­ing else but ki­wifruit, we knew that Gold was no longer good but Green would sus­tain an in­come.

“Un­like main­stream ki­wifruit grow­ers, we weren’t re­liant on ki­wifruit be­ing our num­ber one money earner. As owners we had in­comes of our own from work­ing else­where. “Own­ing the busi­ness as a share­holder meant we weren’t the only owner who had to have all the wor­ries and pains of Psa. As share­hold­ers, we dis­trib­uted that bur­den and that’s a big dif­fer­ence too. In a trust sit­u­a­tion, you’re more likely to sur­vive than an in­di­vid­ual or­chardist.” Ratahi be­lieves M-aori can be­come a colos­sal player in the ki­wifruit in­dus­try. Older or­chardists will re­tire in the fore­see­able fu­ture and their li­censes will be­come avail­able and ex­portable to places such as the East Coast. He pre­dicts li­cences will be re­leased at a lower rate than their cur­rent sale price be­cause many smaller or­chards will be sold rather than handed-down. “Who wants to buy 2ha, which is prob­a­bly in a lit­tle pocket sur­rounded by larger or­chards?” he asked. When owners fi­nally have to sell be­cause of age, buy­ing and trans­fer­ring the li­cences to big­ger blocks makes op­er­a­tional sense. Other­wise those lots may cut out the ki­wifruit and es­tab­lish newer, high-yield­ing and in­ten­sive crops re­quir­ing

less space, such as blue­ber­ries.

EAST COAST PO­TEN­TIAL

Ratahi reck­ons there’s about 2000ha of ex­cel­lent land avail­able for hor­ti­cul­ture on the East Coast. It has a cli­mate which guar­an­tees early start har­vests, usu­ally at weeks 1012, plen­ti­ful wa­ter, well-drained rich soils, a grower-friendly cli­mate and high sun­shine hours.

“We don’t need to over­come the land-own­ing is­sue, but what is needed is the de­vel­op­ment of lo­cal hapu to be­come pro­duc­tive man­agers of their own land in ki­wifruit,” he said.

“We can do that by show­ing them what’s hap­pened here.”

Many East Coast­ers, own­ing as­sets with a col­lec­tive of value of $800m, have vis­ited the Mat­apihi or­chards to learn how the trust has achieved its suc­cess. Ratahi’s team doesn’t be­lieve be­ing so open is giv­ing away se­crets, but that its tried and tested path­ways to suc­cess are things to share to boost de­vel­op­ment else­where.

“That can only be good for you, which can be great for NZ,” he said.

“We’re not talk­ing about in­di­vid­ual wealth here, we’re talk­ing about col­lec­tive in­comes. If you de­velop say $1 of or­chard, down­stream it’s ac­tu­ally worth about $3 in eco­nomic foot­print. A change of mind­set is needed. These peo­ple can be­come wealthy, but they’re think­ing they’re poor.

“An eco­nomic foun­da­tion is about what you eat, how your food is pro­duced, how shel­ter is pro­vided to you – in short, the choices you can make.”

Ratahi calls it the bat­tered peo­ple syn­drome, where it be­comes ‘I de­serve to be bashed’.

“I get a lot of flak about this from my own peo­ple who say, ‘you’re neg­a­tive, that’s not who we are’. That is who we are and I’m not afraid to say that.”

Thou­sands of chil­dren have been ed­u­cated by the trust.

“The share­hold­ers are told they can’t get paid $50,000 but they can cre­ate a $50,000 fam­ily mem­ber through ed­u­ca­tion,” he said.

“We tell peo­ple they might not be able to get money, how­ever, the trust can al­low fam­i­lies to source money as an in­come through ed­u­ca­tion, health and sports grants.

“There are those who earn lots of in­come be­cause they have many shares, through to those with min­i­mal shares, but they all have fam­i­lies who don’t have any shares, and we’ve got to be able to sup­port those peo­ple as well.”

The trust also al­lows for ben­e­fi­cia­ries of owners to source fund­ing for health needs such as hear­ing-aids, glasses and mo­bil­ity chairs.

“We as­pire not only to be­come a source of in­come for our ma­jor share­hold­ers but to be a source of health and well­be­ing for our small share­hold­ers and non-share­hold­ers, so that ev­ery­body can share the wealth,” he said.

“And those who de­serve a big­ger chunk of the money get what they de­serve. It’s their right to – that’s the way busi­ness is.”

GROW­ERS ARE ALL ONE

He be­lieves other grow­ers have re­spect for what the trust does.

“Grow­ers, whether they know it or not, all deep-down feel hor­ti­cul­ture is a fam­ily-ori­ented busi­ness,” he said.

“Ir­re­spec­tive of what one does in hor­ti­cul­ture, be it pump­kins, blue­ber­ries, or ki­wifruit, that same fam­ily con­cept is nat­u­ral and em­bed­ded. When we talk about M-aori grow­ers or Euro­pean grow­ers, there’s ac­tu­ally no dis­tinc­tion. This is an in­dus­try where ev­ery­one will help each other. “But M-aori be­come cul­tur­ally sen­si­tive when we’re deal­ing with ex­ter­nal sources. When M-aori are deal­ing with other M-aori who are not in ki­wifruit, we have a dif­fer­ent way of be­hav­ing. And the same goes when Euro­peans deal with any other cul­ture out­side their in­dus­try.”

The trust is a big fan of the sin­gle-desk model.

“A sin­gle desk pro­vides uni­for­mity of qual­ity, of bar­gain­ing power and of man­age­ment – from vine to plate,” he said

“If any­body tells me they’ve got a bet­ter plan, then I’d like to see it be­cause I haven’t seen one yet.

“One of our pas­sions is see­ing Ze­spri’s suc­cess – I liken Ze­spri to a very vi­cious wife. She’ll pro­tect her chil­dren and her house­hold and for most peo­ple, that’s a good thing. But if you’re at the bash­ing end of it, you shouldn’t have been try­ing to take her house down.” Ze­spri has much to thank M-aori grow­ers for, said Ratahi. They were the most sta­ble group dur­ing the bad times with strength in their con­nect­ed­ness as they were all re­lated and did ev­ery­thing to­gether whereas most other grow­ers were work­ing for them­selves.

“The big­gest chunk of grow­ers united to­gether were ac­tu­ally the M-aori grow­ers, and peo­ple have for­got­ten this,” he said. When Ze­spri share op­tions were of­fered most M-aori grow­ers didn’t buy new shares be­cause they didn’t see the sense in it, how­ever, Ngai Tukairangi did.

“We’ve been with Ze­spri since the begin­ning be­cause we felt that Ze­spri was our baby,” he said.

“Oth­ers may have a dif­fer­ent view but that’s our story and we like it. With M-aori, when you cre­ate some­thing, you’re the last peo­ple out the door. When peo­ple say, turn the lights out, we are usu­ally the peo­ple who turn the lights out. We don’t leave any­thing be­hind.”

ANZ Head of M-aori Busi­ness, David Har­ri­son, left, and Ngai Tukairangi chair­man Ratahi Cross. Pho­tos sup­plied.

Har­vest time – and itʼs all go at the Mat­apihi or­chards. Gen­eral man­ager, ColinJenk­ins and trust chair, Ratahi Cross, have a deepre­spect for each other. Pick­ing time dur­ing 2017ʼs har­vest at Mat­apihi.

Where it all be­gan – a birdʼs eye view of Ngai Tukairangi Trustʼs Bay of Plenty or­chards. Photo credit Ze­spri. Staff from left, An­drew Wood, Reina Dick­son, Colin Jenk­ins, Amanda Ngatai, with Ratahi Cross.

Ngai Tukairangi trustees, from left; Joshua Gear, Riri El­lis, gen­eral man­ager, Colin Jenk­ins, ad­min­is­tra­tion man­ager, Reina Dick­son, Carlo El­lis, Ngawa Hall, Ratahi Cross and He­len Te Kani.

Good or­chard prac­tices are found ev­ery­where at the trust’s op­er­a­tions.

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