Murray River Organics has sold part of its Nangiloc property to a Costa Group subsidiary for $4.5 million it announced today (23 September).
The 390 hectare site includes 113ha of planted conventional citrus and wine grapes. The land is part of MRO’s 3040ha property.
MRG managing director Valentina Tripp said the funds would be used to pay down debt and increase focus on growth of its branded portfolio.
MRO has had an impressive year with new product releases. It launched a range of organic, plant-based mylk chocolate, a pantry staples range, and a breakfast cereal range it launched into Coles and Woolworths.
Costa Group’s 1HCY20 results reported a revenue growth of 6.8 per cent from 1HCY19 to $612.4 million despite a mixed performance in its produce sector, which was impacted by factors including drought, bushfires and COVID-19 challenges.
Final settlement is subject to the registration of a subdivision plan which is expected to be completed by early 2021. Costa will take over operations and management until the parcel is sold, with the property leased to Costa until the sale is finalised.
Tripp said the company has taken the strategic decision to reduce its exposure from non-core farming assets in its portfolio, while accelerating investment in NPD, marketing and branding to increase its share of the organics industry.
The remaining 2650ha is subject to a feasibility study, Project Magnum, which is looking at optimum crop combinations and a possible desalination plant.
The study was commissioned in 2019 to develop plans for the vacant organic certified land. It looked at extending organic farming and came up with a short list of potential crops.
Phase 1 commenced in October 2019 with a pilot program to grow low-THC cannabis organically and resulted in a successful harvest of approximately 21 tonnes of high-quality seeds. MRG plans to sow its first organic oat crops under pivot irrigation next April which will be used in our Organic Muesli.
Phase 2 of the plan is in the feasibility stage and will determine the optimum combination of crops focusing on dried vine, almonds, dates and pistachios.
Ensuring long term security of access to economically priced water is the focus of the next phase of development.
The project team is reviewing alternative water access solutions including a potential localised water desalination plant on the balance of the Nangiloc property. This proposed solution involves accessing ground water and reducing its salinity content to make it suitable for irrigation at economically viable rates. The scoping study is undertaking further financial and technical analysis and is securing regulatory approvals to proceed to the next stage.