Rich Listers to turn Ferrero nut orchards into olive groves

Family-owned Ferrero Group, best known for its Ferrero Rocher hazelnut chocolates, Kinder Surprise eggs and Nutella spread, had hoped to sell Dellapool for more than $80 million when it put the property on the market a year ago, abandoning decade-long plans to develop a major hazelnut supply source in Australia.

Ferrero, through its local subsidiaries, had planted 1 million hazelnut trees at Dellapool with plans to harvest about 5000 tonnes of nuts from its NSW operations by 2022. It purchased the former riverside potato farms Dellapool and Arrambee from the Menegazzo family in 2013.

But having provided a $143.5 million loan to fund the development of the NSW hazelnut project, Ferrero began pulling out the trees last year, readying the site for a new owner and a different use. The nut trees, which are not native to Australia, had failed to thrive.

goFARM founder and managing director Liam Lenaghan told The Australian Financial Review the investment firm planned to plant a “super-high-density olive grove” at Dellapool, taking advantage of the investment made by Ferrero in infrastructure, technology and irrigation.

“We plan to plant a couple of thousand olive trees per hectare. It will be a hedge row style orchard rather than big olive trees – we want the fruit, not the wood.”

Tomato, almond expansions

Mr Lenaghan said goFARM was working with global nursery giant Agromillora, a pioneer of the super-high-density olive grove model, on the “optimal layout of and design” of its olive plantation.

“The land has all been cleared. Ferrero have been very good stewards of the property. They have spent many millions removing the hazelnut orchards and used on-farm chippers to spread the wood chips across the farm and incorporate them into the soil,” he said.

Alongside the Dellapool acquisition, goFARM has expanded its tomato and almond-growing operation Sandmount Farms near Katunga in northern Victoria with the acquisition of Sandmount North. It paid more than $30 million for the property, which spans 1556 hectares and has 3211 megalitres of water entitlements.

Including capital expenditure and development costs, goFARM will spend about $150 million on the two new properties.

The sale of Dellapool was handled by CBRE’s John Harrison, Matt Childs and James Auty. LAWD negotiated the sale of Sandmount North.

“We will unlock the full potential of these assets using technology and sustainable water management to deliver both strong financial returns and tangible benefits for regional communities,” Mr Lenaghan said.

Funding for these investments will come from the remaining portion of a $200 million commitment made by $9 billion Qantas Super in May and from family offices and wealthy investors.

Ownership of goFARM is split between Costa Asset Management, the family office of Robert and Adrian Costa (younger brothers of the late Rich Lister Frank Costa), and Mr Lenaghan and his family.

The acquisition of more than 5000 hectares of farmland primed for productivity uplift takes goFARM’s assets under management to $1.3 billion. Its 96,000-hectare portfolio includes 112,000 megalitres of water rights. Mr Lenaghan said water rights would only increase in value because of the Commonwealth buyback scheme.

Qantas Super chief investment officer Andrew Spence said the fund had been impressed by goFARM’s approach to creating value through asset improvement.

“Backing goFARM in these acquisitions aligns with our mission to deliver strong, long-term returns for our members through high-quality investments in sectors poised for growth,” he said.