WA agribusiness player Alterra continues to strengthen its offering with the ASX-listed company reaching an exclusive technical partner agreement with horticultural expert Tyson Bennett and his Perth-based company Chemicals Direct.
Mr Bennett specialises in the outperformance of high-value tree crops through the systematic enhancement of plant physiology and the use of plant growth regulators.
Chemicals Direct supplies its proprietary plant growth regulators and canopy management services to producers in Australia and 21 other countries.
Its systems and technology are used primarily to manage high-value crops such as avocados, mangos, stone fruit, citrus and table grapes.
Alterra said Mr Bennett and his company had developed a suite of canopy management techniques and products that control excessive vegetative growth, ensure uniform flowering and minimising the risk of trees producing large crops one year and producing little or none the next year.
These techniques and products also allow producers to tailor fruit size, enhance product quality and improve water use efficiency.
Notably, the ability to control the tree canopy permits the adoption of high-density, high-performance systems and automation.
High-density fruit tree systems are becoming increasingly popular as the demand for permanent crops rises.
A study by the NSW Department of Primary Industries in 2017 found that a high-density citrus tree orchard with 952 trees per hectare produced a cumulative cash flow of nearly $120,000 per hectare in the twentieth year whilst a traditional orchard with 440 trees per hectare produced a cash flow of about $80,000.
Under the agreement, Mr Bennett will provide business development services for three years while Chemicals Direct will provide products and services to Alterra on a preferred basis.
The company will also have research partner status with Chemicals Direct, which enables information sharing and collaboration as well as preferred rates for Chemical’s products.
In addition, Alterra will be paid a royalty or rebate for products sold into new markets it develops for Chemicals Direct.
Alterra Managing Director Oliver Barnes said:“The engagement of Tyson Bennett as a Technical Partner places Alterra at the forefront of high-density, high-performance production systems for permanent tree crops.”
“Capturing Tyson’s knowledge and experience inhouse greatly enhances Alterra’s ability to optimise production cost curves and unlock maximum value from assets in its development portfolio.”
“Our alignment with Chemicals Direct, and its international network in the horticultural sector provides the company with valuable insight into the various operating systems and latest technologies adopted across a broad range of crops and geographical locations.”
Alterra has been developing a pipeline of potential project opportunities with existing land and water owners in WA.
Its three-phase business model begins with the company screening opportunities and carrying out research, detailed feasibility and modelling work.
Once an opportunity has been identified as economically viable, Alterra will move on to the next phase and invest between 5% to 25% of the equity required for the project and raise the balance from investors.
During this phase, the company will receive establishment and management fees during the development of the asset and performance fees once the asset is monetised.
Alterra will then enter into the annuity income phase under which it will charge the new owner an annual management fee with a market review every five years.
The company’s target sectors include high-value tree crops such as those covered by the technical partnership with Mr Bennett, intensive dairy and other irrigated cropping opportunities in Western Australia.
By Matt Birney
