The Crossings (Marlborough) Ltd
Registered Office Address
Level 1
127 Hardy St
Nelson
Directors
WILLS, John
MILLAR, Michael John
History
Incorporated: 01-APR-1999
Major Shareholders
Website
www.thecrossings.co.nz
News
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Wednesday, 19 July 2000, Press Release
MAJOR DEVELOPMENT TO CAPITALISE ON INTERNATIONAL DEMAND FOR NEW ZEALAND WINES
A major new wine company is to be formed, to capitalise on international demand for quality
New Zealand wines, based on three vineyards in the prime Awatere Valley near Blenheim. The
new company, The Crossings (Marlborough) Limited, expects to have 140 hectares (345 acres) of
planted vineyard and be capable of producing around 70,000 cases of wine per annum. The
company intends to purchase the existing Medway and Brackenfield Vineyards in the Awatere
Valley in exchange for shares in the new company and will also develop a third Awatere
vineyard (The Crossings) to produce premium wine for export markets.
The company expects to produce around 630,000 litres by 2005 putting it into the second
category (200,000 - 2 million litres) of New Zealand wine producers.
"This new venture gives investors the opportunity to get into a larger New Zealand wine
company with a strong export focus, at an early stage," Mr Grant Uridge, executive manager of
Farmers' Mutual Group, said today. "The investment also offers the partners of the Medway and
Brackenfield Vineyard the opportunity to consolidate their current investment into a new
venture at the value-added end of the wine industry," according to Mr Uridge. "By combining
the current vineyards with the new property, we will have scale of operation necessary to
develop our own wines and access international markets."
The investment offer is conditional upon a majority of the Medway and Brackenfield partners
endorsing the proposals on 28 July and an additional $1.4 million being raised by first
allotment. An offer of up to $7.0 million in additional shares will be made to partners and a
subsequent public offer for any remaining shares will be made on 21 August.
"When production from the third vineyard comes on stream in 2004, the company expects to
establish its own winery. However, in the development stage and until it secures a sufficient
volume of sales, we plan to use contracted wine making facilities."
The partners of the two existing vineyard partnerships are being offered Ordinary Shares and
Convertible Preference Shares in the new company or a combination of the two, in exchange for
the sale of the existing vineyards to the new company. The partners also have the opportunity
to purchase additional shares in the company at a preferential rate of 90 cents per share,
however there is no requirement for any partner to put in any money in addition to their
existing investment.
The two existing vineyards, Medway and Brackenfield were formed in 1996 and 1997 as
investment partnerships. They are now well-established and have 70 and 200 investors
respectively. Medway Vineyard, comprising 44 hectares, is planted predominantly in Sauvignon
Blanc and Chardonnay and produced its first harvest in 1998. Brackenfield, with 33 hectares
planted in Sauvignon Blanc and Pinot Noir, will first produce in 2001. The third vineyard,
The Crossings, will comprise 63 hectares planted mainly in Sauvignon Blanc and Pinot Noir.
The Awatere Valley has all the natural characteristics needed to produce top quality wines in
the distinctive New Zealand style - low rainfall, the average is approximately 780 mm per
annum, and high sunshine hours, between 2,100 and 2,400, which is higher than the 2,000 hour
New Zealand average.
The three vineyard sites have free draining, fine soils, which produce lower vigour vines
with naturally opening canopies to assist with vine balance, important for high quality grape
production. While supplementary irrigation is needed during the long dry ripening periods,
all three vineyards have current water rights.
Because some 90 per cent of the company's wine is intended for export, the company has made
arrangements with International Wine Associates (IWA), a Californian firm specialising in
global marketing and distribution. IWA will help establish marketing and distribution
relationships for the company's wine in export markets. The Crossing's ability to attract a
major distribution partner is enhanced by the scale of the proposed operation and the ability
of the three vineyards to produce high quality wine. This enables the new company to focus on
export markets and take advantage of the interest and growing demand for premium New Zealand
wine.
Except possibly for direct sales to its shareholders, the company does not intend to enter
the domestic wine market.
Demand for 'new world' wine producing countries such as New Zealand, grew from 6 per cent to
17 per cent from 1992 to 1997 and demand for quality New Zealand wines is exceeding supply.
Over the decade 1989 to 1999 the New Zealand Wine Institute statistics show export volume
increase of 540 per cent and 980 per cent in value. This growth has continued through 2000
and export sales in May reached $150.9 million. The Institute projects that annual wine
exports will nearly double to reach $275 million by 2003.
Sir Allan Wright will chair the Board of the new company with the other directors being John
Comerford, Ken Franklin, Ron Gibson, Graham Hull and Tim Herrick.
The investment promoters are Farmers' Mutual Investment Services, a division of the
specialist rural financial services company Farmers' Mutual Group, and Investment Services
Limited, who will act as investment manager. "The Crossings provides an opportunity for
investors to become involved in the value added end of New Zealand's wine industry and
benefit from growing international interest in and demand for quality New Zealand wines,"
says Grant Uridge.
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