Efic finance helps food export business grow
With Efic’s loan Western Australia-based Oz Varieties was able to continue to fund its blueberry breeding program and build on its Australian IP revenue.
According to Roger Horak, Founder of Oz Varieties, blueberries are the next big ticket when it comes to fruit production and innovation.
Historically Roger’s business, United Exports, has focused on the commercialisation of the Oz Peach breeding program which focuses on low-chill varieties of peaches and nectarines, and earned a global reputation for excellence in early season stone-fruit varietal selection. With an established stone-fruit business in place, Roger started looking at opportunities for growth.
The blueberry story started in 2006 when Roger met Dave Mazzardis, who had bred the Oz Peach varieties and had already been working on his blueberry genetics. Roger invested in a blueberry breeding program with Dave who focused on developing new varieties of blueberries that would thrive in new low chill environments around the world.
“What Dave had already bred and achieved when I met him was amazing, so we entered into an agreement to continue to develop varieties for global markets,” said Roger.
“In 2009 we started developing and trialling the blueberry varieties. The first commercial planting of blueberries was in 2013, which was when we established Oz Varieties,” said Roger.
Roger explains that the business model is based on the intellectual property (IP) of the new varieties of blueberries that are being developed and sold on a royalty fee basis to blueberry farm operations around the world.
Our main challenge has been how to increase our income stream from our fruit production to further invest in developing new blueberry varieties that will continue to bring royalty income to Australia,” explained Roger.
“It costs in the region of about $50k per variety to do the initial registration and protection, and then there are ongoing costs. Plant Breeder’s Rights is slightly different to patent filing, there are ongoing costs; you need to keep reference plants and DNA, and fingerprinting of the plant varieties to be able to prove your claims.”
The business started looking at the latest machinery available that would substantially increase blueberry production output at their packing facility, enabling it to better meet the burgeoning demand for blueberries in its key markets and fund its plant breeding program.
“These highly technical machines automate the process of sorting and packing blueberries. This automation will improve volume, reduce wastage, and increase efficiency by automatically segregating blueberries by quality, weight, colour, and size (which is currently done by hand).”
Having found the machines, the business needed asset finance to purchase them. With their asset finance contact unable to provide the support needed, Oz Varieties contacted Efic.
Efic was able to provide Oz Varieties with a A$1.1 million loan to support the purchase of the new packing machines.
“We’ve now taken our production efficiency from 70-80 per cent to as high as 98-99 per cent. There have been massive improvements that these machines have made.”
“There’s an extra 30 per cent of fruit that we are now earning income on. Every year that 30 per cent will make massive impact on funding our plant breeding program and increasing royalty returns to Australia,” said Roger.
“Being able to export our IP and take it global is critical in making our plant breeding program viable.”
“Without Efic our business growth would have been severely impacted. Efic’s help means we had the ability to improve our efficiencies and make the business that much more commercial. It’s been fantastic.
We’re definitely planning to further our relationship,” said Roger.
For Oz Varieties the future is blueberries. Roger said, “We’re definitely regarded as being at the forefront of innovation when it comes to our breeding program. So we will continue to make improvements and build on the IP we have.”
Need tips to help you grow your food and beverage business internationally? Download Efic’s free Growing Australia’s food & beverage exports eBook today. Call Efic on 1800 093 724 or visit www.efic.gov.au.