Fresh produce exporter T&G Global is hoping a joint venture with another international supplier will strengthen its business in the United States.
Fruit. Photo: RNZ / Alexander Robertson
The company - formerly known as Turners and Growers - is aiming to beef up its its marketing and distribution business in the US.
T&G has just reported a two-thirds increases in its full year profit and said it had been working for some years to seal the deal with Vancouver-based partner, Grandview Brokerage (GBL), which was the owner of the Oppenheimer Group.
T&G chief strategy officer Tim Clarkson said the deal would strenghten the company's North American and international businesses, which was expected to improve export revenues and profits over time.
However, he said it would not lead to any cost savings, as the companies would be looking to expand its international business.
"Both business are growing and so we are going to acutally need more people into the industry," he said.
The joint venture arrangement would see T&G increase its stake in the joint venture's United States distribution and marketing business, Oppy US, to slightly more than 39 percent, from 15 percent, with GBL owning the balance, for $11.4 million.
T&G would reduce its interest in the David Oppenheimer Transport business to 6 percent from 15 percent, transfering the 9 percent balance to GBL, for $2m.
It would also sell half its stake in its U.S. export business, Delicia North America, to GBL for $8.6 m, giving each partner 50 percent.
The deal is worth $22m in total, with T&G paying $800,000 to complete the transaction.
Mr Clarkson said the deal would play a vital role in the marketing distribution of T&G's Jazz, Envy and Pacific Rose apple brands.
"We need to be giving the customer the best produce year round and by bringing this partnership together we are able to do that," he said.