Fyffes agrees €6m deal to buy pineapple farm

FYFFES, the publicly quoted fresh produce group, has bought a pineapple plantation and related production assets from Agroindustries Golden West in Panama.

The acquisition means that the group will directly produce 50% of the pineapples it markets in its various markets by next year.

The acquisition involves roughly 450 hectares and adds to the group’s existing pineapple farms in Costa Rica.

The total cost of this transaction is expected to amount to $8 million (€6 million), including debt acquired and deferred consideration payments.

Fyffes’ chairman David McCann said the deal was “an important step” to boosting and securing the supply and quality of the group’s Fyffes Gold pineapples.

“The further integration of production, shipping and marketing is a positive development for Fyffes and its customers,” he said.

The fruit distributor reported results for 2008 that were ahead of its own targets and market expectations.

Pre-tax profits for the year ending December, excluding the group’s share of its property spin-off Blackrock International’s results and exceptional items, rose to €31.5m from €10.2m in 2007.

Sales rose by 7% from €708.9m to €758.2m, reflecting contributions from acquisitions made during the year and higher average selling prices in its key banana category.

During 2008 it experienced an unprecedented level of cost inflation, with the costs of fruit, shipping and fuel all much higher, year on year.

The impact of those losses were offset by more favourable average exchange rates due to the relative weakness of the dollar for much of the year.

The group said, when it reported its 2008 figures back in March, it was targeting earnings for 2009 of between €14m and €18m.

It also said that after a modest start to 2009 it had made up some of the lost ground through better pricing structures in the past few months.