TG Global, the fruit marketing firm controlled by Germany's BayWa, wants to sell its food processing subsidiary TG Foods as the apple processing business has been hurt by a decline in fruit volumes and apple juice concentrate prices.
The company reviewed the unit's operations and determined that it's non-core and consequently should be either sold, rationalised or closed, it said on Monday.
'Despite the best efforts of TG Foods' management and staff, the business has struggled to counter the current impact of the significant decline in the volume of fruit for processing in New Zealand and the continued worldwide decline in the commodity price of apple juice concentrate,' chief executive Alastair Hulbert said.
Depending on the timing and outcome, TG may incur a significant after-tax loss due to a write-down in the net book value of TG Foods' assets and other associated costs, it said. At this stage the negative impact to the TG Group is estimated to be about $14 million.
It noted, however, any negative impact will be largely offset by a fair value gain of approximately $14m from TG Group's investment in Grandview Brokerage, a joint venture in the US that will improve its access to the American market.
TG Foods has the capacity to process up to 200,000 metric tonnes of apples and other fruit at its two manufacturing sites, one in each of Hastings and Nelson.
Source: skynews.com.au
