No hazelnuts in Australia: Ferrero gives up 70 million dollars of unproductive agricultural investments
Well-known Alba confectionery company Ferrero has abandoned a ten-year project to develop a major hazelnut production in the Riverina in NSW, after putting its 2,665.71-hectare Dellapool aggregation near Narrandera on the market for more than $80 million.
Up to 1 million hazelnuts, worth around $70 million, will be removed from the property, which will be offered as a clean slate, without any cultivation, also because the hazelnuts had never seriously gone into production. That's where the big estate is located
The second confectionery group in the world after Mars, the Ferrero Group is best known for its Ferrero Rocher hazelnut chocolates, Nutella spread and the famous Kinder eggs.
The estate has a great advantage, which made it choose: a large availability of water for irrigation, but this was not enough to guarantee its success.
The family-run business, which reported annual revenue of €14 billion ($23.5 billion) in 2022, has acquired two large riverside potato farms, Dellapool and Arrambee from the family's former Rich Listers Menegazzo (owners of the meat and livestock giant Stanbroke) in 2013.
The acquisition was part of a $70 million investment, which included planting 1 million hazelnuts by 2018. Ferrero hoped to harvest around 5,000 tonnes of hazelnuts from its NSW operations by 2022, reducing reliance on growers external for dried fruit for its sweets.
Hazelnuts produce their first crop after about three years, but can take 10-15 years to reach full maturity. However, even after three years, the Ferrero Group remained empty-handed, even if it did not report what went wrong.
Financial accounts filed by Ferrero's Australian subsidiary, Agri Australias, for the year ending 31 August 2002 show that the company generated revenues of just $96,000 and recorded an after-tax loss of $5 million, equivalent to a similar loss recorded the previous year. So there is simply no hazelnut production.
The hazelnut is not a native plant of Australia and from the beginning it had been difficult to find a variety that could take root locally. Evidently Australia is not Piedmont , although some characteristics of the area, one of the most temperate in Australia, do not appear, superficially, very different, with winters that can even experience snow. Too bad that, however, the local flora is completely different. For hazelnuts, Ferrero, which also produces in Australia, will have to turn to production imported from other crops.
A key ingredient of the offering is 11,361 megatyres of groundwater and surface water rights. There is also a large on-farm water storage dam of approximately 500 megalitres as well as extensive structural developments including offices, residential accommodation and multi-purpose agricultural sheds.
Harrison said the combination could attract corporate and institutional investors seeking large-scale development assets with extensive river boundaries and significant water rights.
“The Dellapool aggregation has been extensively developed with state-of-the-art irrigation infrastructure, allowing flexibility in the potential production of various permanent horticultural plantations.”
The Ferrero Group's decision not to proceed with its NSW project represents a major blow to the creation of a commercial-scale hazelnut growing industry in Australia, which may have many things, but hazelnuts does not.
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The article No hazelnuts in Australia: Ferrero gives up 70 million dollars of unproductive agricultural investments comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/niente-nocciole-in-australia-ferrero-rinuncia-a-70-milioni-di-dollari-di-investimenti-agricoli-improduttivi/ on Fri, 17 Nov 2023 10:00:38 +0000.