The global investment management firm Kolberg Kravis Roberts announced today an investment of over$100 million in Sundrop Farms Holdings ltd., an agribusiness set up in 2009 in Port of Augusta, South Australia which has devised a groundbreaking solar-sea water technology system bringing sustainable scale vegetable productions to the arid region.
The investment, shelled from KKR’s to be directed to the holding company for business and operations purposes, as well as to a 20 hectare glasshouse to nurture 15,000 tons of vegetables and fruits annually for Australian consumers is expected to scale up a hundredfold productions in a pesticide-free, carbon-neutral and freshwater free environment, alongside a research and development center.
“KKR looks to invest in and partner with companies that provide solutions to environmental and societal challenges. Sundrop Farms epitomizes this effort, and we are delighted to work with this experienced and knowledgeable team to pursue new growth opportunities in Australia and internationally,” said Justin Reizes, head of KKR Australia.
“The use of sea water and sunlight sets us aside from our competitors in the greenhouse industry which are heavily reliant on fresh water and fossil fuels,” said Philipp Saumweber, Sundrop Farms chief executive officer.
“We grow food where land is too arid for farming, fresh water is in short supply and domestic food security is a concern. Farming with typical agricultural inputs would be unsustainable in these regions so Sundrop uses renewable energy to heat, power and water its crops”, explained Saumweber.
The environmentally friendly and sustainable technology involved is, according to Saumweber, also leveraging the economic performance of the company as removing fossil fuel dependence from operations significantly reduces cost, in turn enabling the company to sell their produce at fixed prices and attracting more competitive distribution agreements.
The capital injection enabled the company to seal an unprecedented ten-year retail agreement with Australian supermarket giant Coles, with first truss tomatoes to be sold on the market by 2016. No further details were available on the arrangement.
“This is the first time we have signed a contract of this length for Australian-grown fresh produce
and we are delighted it will be supporting the creation of 300 new jobs and investment in South
Australia,” said Coles managing director, John Durkan.
The Port Augusta facilities’ expansion is expected to bring 100 new jobs during construction phase, due to start in January, and 200 jobs to the community at start of operations, with the new professional discipline entailed, which will be supported by intense training from Sundrop and its’ partners.
KKR and Sundrop Farms Holdings Limited will be working at entering markets such as the Middle East’s, and other markets which are long-term supply constrained agricultural markets.
The deal is to involve John Holland Group, Aalsborg CSP and Van der Hoeven as constructors of the new facilities.