Limoneira enters into JV with Argentine citrus company
U.S.-headquartered Limoneira has entered into a joint venture with Argentine citrus company FGF Trapani, in a deal that will see the acquisition of hundreds of hectares of farmland and the creation of a new subsidiary in the world’s top lemon-exporting country.
The company on Monday announced it had entered into an agreement with FGF, a multigenerational grower-exporter which owns over 3,200 acres of lemons and oranges in the provinces of Salta, Jujuy and Tucuman as well as a juice processing facility in the province of Tucuman.
As part of the agreement, Limoneira will create a subsidiary in Argentina under the name Limoneira Argentina S.A.U. and will acquire 25% of the parcels of Finca Santa Clara – approximately 1,200 acres of planted lemons – upfront with an additional 25% to be acquired over a three-year period.
Limoneira Argentina and FGF’s agreement will operate under the name Trapani Fresh, with Limoneira Argentina as the managing partner and responsible for all fresh fruit sales, holding a 51% interest and FGF holding a 49% interest.
The agreement is expected to close in the middle of March 2019. FGF Trapani will maintain 100% ownership and control of the juice processing facilities and operations.
“It’s very exciting for us to expand our global footprint into Argentina and thereby strengthen our ability to become a 365-day, 24/7 global supplier of fresh citrus to our valued customers around the world,” said Alex Teague, senior vice president of Limoneira.
He said the relationship would provide Limoneira with access to new markets and distribution networks, increase production and technical capacity and also reduce the impact on operating results.
Harold Edwards, president and CEO of Limoneira, said: “We are excited to add FGF’s rich supply of citrus to our global production and increase our competitive position. Our two companies have a long history with a combined 205 years in the business and this joint venture is bringing together years of industry knowledge and expertise.
“We expect the deal to be accretive in the fiscal year 2019 and we will provide more information on our first quarter call in early March.”