Two Fyffes spin-off companies have formed a 50:50 joint venture between them to buy some Dublin land.
Total Produce and Blackrock International Land formed the joint venture, that last week agreed to buy 135 acres of land in Dublin for €25 million (£17.3m).
The lands are located at The Ward in north County Dublin, close to the new N2 motorway.
Just over 36a of the land is zoned for agri-business use, 20a of which have been targeted for the initial development of new facilities for Total Produce, and replacement premises for its existing operations in central Dublin. Under the joint venture agreement, Total Produce has an option to acquire these 20a at cost, but this option has to be exercised during a maximum period of 10 years from completion of the transaction.
The remaining 99a, which also adjoin Blackrock’s existing 120a holding at Corrstown, Co. Dublin, are well placed to take advantage of the significant development expected to take place in this area of north Dublin over the next few years.
Blackrock and Total Produce have each contributed €12.5m to the acquisition cost. Three representatives from each company have been appointed to the board of the joint venture company, including Robert Knox, managing director of Blackrock, and Rory Byrne, chief executive of Total Produce.
The vendors of the lands are subsidiaries of Balkan Investment Company, a firm controlled by former Fyffes director Neil McCann, which owns 6.38 per cent of the share capital of Blackrock and 10.6 per cent of the share capital of Total Produce. The joint venture agreement and the agreements for the purchase of the lands have been negotiated at arm’s length.
Commenting on the transaction, Total Produce’s Byrne said: “This strategic landholding is ideally located, close to all the main distribution routes that serve both Dublin and the rest of Ireland.
“The purchase gives Total Produce access to the necessary land to relocate our existing operations in central Dublin, to provide essential additional capacity for our customers and, ultimately, to consolidate all of our Dublin-based operations in a single location.”
Meanwhile, first-half profits at Fyffes have been knocked by losses at its melon joint venture in Brazil - with an 11 per cent drop reported.
Fyffes said pre-tax profits for the six months to the end of June were €15.2m, compared to €17.7m last year.
The importer recorded a €2.8m loss from its share of the Brazil-based melon producer Nolem, in which it has a 60 per cent stake.
Total revenues for the period were up 45 per cent, to €286.5m.
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