A business that began in a field in Matakana has grown into a global operation with a sophisticated glasshouse enterprise producing seven million capsicums a year. Hugh Stringleman found out how they do it.
Southern Paprika (SPL) of Warkworth is the largest single-site glasshouse grower of capsicums in New Zealand, with nearly one million plants at any one time under 26ha of cover.
Each bell pepper plant produces 40 fruit per season, as the plants grow up strings to 4m in height.
It’s called Southern Paprika because it is in the Southern Hemisphere and paprika is the Northern Hemisphere word for capsicum.
It is a joint venture between privately-owned Alexander Croppling Ltd (ACL), from nearby Point Wells in the Matakana district, and The Levarht Produce Company of Holland, which needed Southern Hemisphere supply for its customers in Japan.
Southern Paprika began in 1998 with a 2.5ha glasshouse and it is now 10 times that size, along with a separate 1ha site leased from ACL.
It now has four complexes at Warkworth, employing more than 160 full-time staff members.
It has invested more than $60 million in capital cost and the annual wage bill is over $7m, much of which is spent in the Warkworth area.
ACL was started by Hamish and Robyn Alexander in 1984, leasing land around Matakana and growing crops of melons and field capsicums for the domestic market.
After five years ACL moved production under cover for reasons of quality, marketability, and increased yield, and a 1ha glasshouse was built at Point Wells.
Then came the joint venture with Levarht, and Hamish continued at SPL as founder and director.
Levarht’s international expertise has helped SPL expand rapidly with the growing demand domestically, along with export markets in Japan, Australia and Canada.
Levarht is a third-generation marketing company established in 1933 and it imports and exports produce from Europe, including NZ apples, onions and kiwifruit.
SPL and Levarht are partners in a FreshMex production site Queretaro, two hours north of Mexico City. It has 7.5ha of glasshouses with Dutch technology, close to the capsicum export markets of America and Canada.
Levarht has ownership of businesses in Holland, Belgium and Costa Rica, and supplies capsicums from its growing partners to Japan, the US, Canada, Russia, the Far East and into Europe.
SPL is focused on sustainable and financially efficient production in aspects of energy use, waste, transport and health.
“Although our philosophy is to keep it simple, we have implemented the best available techniques and systems and we are always looking to integrate new technology and innovation into our entire growing, picking, packing and supply chain management process,” Alexander said.
The colour ratio is around 60% Red, 30% Yellow, and 10% Orange. Green production is usually from coloured varieties harvested before colour change occurs.
Specific varieties of bell peppers are chosen to produce different fruit colours and sizes to suit various domestic and export market requirements.
Seedlings are planted progressively from May and harvesting begins in July, continuing year-round.
Southern Paprika has four complexes at Warkworth, employing more than 160 full-time staff members.
All plants are hydroponically grown with fertigation and CO2 is delivered to each plant to enhance growth.
The houses are heated with natural gas that warms water, which is then circulated.
The heating system also delivers humidity between 85% and 90%, and the daytime temperature is 21-28degC.
Skilled crop maintenance staff prune and twist the plants around supports to maintain general plant health and encourage fruit setting. Incorrect techniques can reduce yields.
Production staff harvest the fruit before the company’s packhouse grades by colour, quality and size, and puts through up to 60 tonnes a day at peak.
It delivers a variety of packaging and branding according to buyer needs .
General manager Blair Morris says production was just under 7million kilograms of capsicums a year, 80% of which went to the domestic market and the rest export.
Specific varieties of bell peppers are chosen to produce different fruit colours
and sizes to suit various domestic and export market requirements.
Employees include a big community of Tuvaluan and Kiribati workers who want to work in the hot and humid conditions, many of whom have NZ residency in Warkworth and others at peak season under the RSE scheme.
The seasonal workers stay six to nine months and are family members of those who are residents and they stay with those families during their time here.
Morris says the company has good relationships with Tuvalu and Kiribati authorities and is one of the largest employers of this Pacific Island community in NZ.
“The whole team has a great pride in producing good, healthy food for all New Zealanders,” Morris said.
“Without the community which we employ and support, we wouldn’t have a business that operates this well.
“Only by working together do we achieve the low-cost efficiencies and the quality of product.”
“From the get-go Hamish could see the need for strong relationships between the business and its local community.
“He maintains great connections with everyone in the business and now we have second generations coming through.”
Business sustainability includes rainfall captured from the glasshouses and reused in the hydroponic systems.
The heating system generates CO2, which is delivered to the plants for added growth.
Production staff harvest the fruit before the company’s packhouse grades by colour,
quality and size, and puts through up to 60 tonnes a day at peak.
Growing media, compostable strings and the plants and leaves are all mulched after a production season, composted and then taken to the avocado orchards developed by part-owners SPL on the Tapora Peninsula in the Kaipara Harbour.
Fruit not suitable for sale is supplied to local cattle owners and surplus water for nearby paddock irrigation.
“We want to reduce our reliance on external inputs and their associated risks, like fossil fuels,” he said.
“What will be our energy source in the future when natural gas is no longer available? Will it be geothermal, our preferred option, or something like biomass from a wood-burner?”
Morris says fruit must be produced at viable prices for the consumer, to underpin the volume of production and make sustainability attainable.
“People may think capsicums are easy to grow, but they are not,” he said.
“They are quite tricky to do well at the right price.”
Hamish and Robyn are thinking ahead to the next stage of SPL expansion, as well as giving back to the environment, for example, through a forest of redwood trees planted at Te Arai, where they live.
They have embraced avocados, first at Mangawhai and then Tapora, by way of a joint venture of SPL with Glen and Joanne Inger in Harbour Edge.
Part-way through development there are 25,000 trees growing on 150ha, with plans to double that planted area with avocados and perhaps citrus.
Southern Paprika is packing and selling the avocados as they come into production.
Specific varieties of bell peppers are chosen to produce different fruit
colours and sizes to suit various domestic and export market requirements.
SPL has a further 10ha of land at Warkworth and room for two more glasshouse complexes and the company is currently evaluating that development potential.
It is trialling cucumbers for one customer by way of diversification because the NZ capsicum market is now fully supplied.
Glasshouse production gives much better productivity per square metre of land and better-quality produce than field cropping, but that productivity can be lost by heavy regulation and overhead costs.
“If it becomes too costly for us to operate due to central government policies then produce will be imported, with considerable supply risks,” Morris said.
The Warkworth site faces some of the pressures of urbanisation currently in the news in South Auckland, but there are benefits also in getting closer to Auckland, the biggest market for fresh produce.