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Hidden Valley Harvest's $13.8 million pineapple facility in Yeppoon put on hold

Ben Harden
By Ben Harden
Updated March 31 2022 - 2:09pm, first published 6:00am
Hidden Valley Harvest's pineapple processing facility has been put on hold due to construction issues, despite receiving $5.8m in funding from the federal government. Photo: Ben Harden

Plans to open a $13.8 million pineapple processing plant on the Capricorn Coast have been thrown into limbo after the company behind the project went into liquidation.

The 2000 square metre facility at Yeppoon was jointly funded by the federal government, which tipped in $5.8 million under the Regional Jobs and Investment Packages Fund, and Hidden Valley Harvest Pty Ltd.

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Designed to feature leading edge food technology, construction on the plant was green-lit at a sod turning event in December, 2019, and slated to be operational by June, 2020.

However, Hidden Valley Harvest terminated the construction company in February 2021, due to planning disagreements, and now the facility remains unfinished.

Hidden Valley Harvest Pty Ltd has recently gone into liquidation.

The company has since ceased its involvement with the project, claiming it is now unviable, but the company's shareholders say they're still keen to develop the facility to its full potential.

Cost blow out 'extremely disappointing'

One shareholder in Hidden Valley Harvest is Valley Harvest Group Limited. Director Derek Lightfoot said it was now seeking additional financial support for the project.

"Due to significant time delays in construction and the impact of COVID on both the cost and time of construction, the cost of construction is now millions of dollars greater than the original contract," he said.

"Despite signing a design and construct contract to complete the building for an agreed price in a timeframe of six months, the builder was unable to achieve those requirements.

"This has been extremely disappointing, especially as the equipment costs, which were originally budgeted to be considerably more than the construction cost, have been managed within budget."

Attendees at the sod turning event in 2019 were able to taste the products the plant would have been able to produce.

Mr Lightfoot said the main building was built but there was considerable expense to complete external work.

"At this time, Valley Harvest Group Limited is working hard to complete a restructure and raise the additional funds required to complete the construction of the facility," he said.

Builder refutes performance dispute 

Rockhampton's ASM Builders was engaged by Hidden Valley Harvest (Facility) Pty Ltd (HVH) to construct the pineapple processing facility.

ASM Builders managing director Sam Milfull strongly refutes Mr Lightfoot's comments about ASM Builders' performance on the project.

Mr Milfull said ASM Builders was not engaged under a design and construct contract and that Hidden Valley Harvest was responsible for designing the facility and issuing designs to ASM Builders.

"The true reason for the project delays was that there were numerous delays by HVH itself in issuing designs," he said.

"Despite these project delays caused by HVH, ASM Builders and its subcontractors agreed to proceed with the contract.

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"Mr Lightfoot's attempts to apportion blame to ASM Builders are false and misleading. In February 2021, and wrongfully, HVH purported to terminate the contract with ASM Builders and refused to pay ASM Builders for its work and the work of its subcontractors."

Former director of Tropical Pineapples and Hidden Valley Harvest Joe Craggs, Federal Member for Capricornia Michelle Landry, former Livingstone Shire Council mayor Bill Ludwig and principal of ASM Builders Sam Milfull at the facility's sod turning event in late 2019. Photo: Supplied.

Mr Milfull said HVH owes ASM Builders over $960,000 and has failed to make payment.

"Given the project was partially funded by a commonwealth grant, I have written to GrantConnect and Michelle Landry to express my concerns about HVH's management of the project," he said.

"I have also been in contact with HVH's liquidators and have requested that they investigate the conduct of HVH's directors."

Gov's $5.8m fund spent on construction costs

The federal government granted the funds to Hidden Valley Harvest (Facility) Pty Ltd on the condition that the money be spent specifically on equipment and construction.

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"Once the funds were applied to the project an audit was undertaken by an independent body to confirm all money was spent in accordance with the grant agreement," Mr Lightfoot said.

Federal Capricornia MP Michelle Landry said she was aware of the cost blow out and was now looking at ways the federal government could assist to see the project move forward.

"This project is very important for the Capricorn Coast and the end game is to see the project up and running," she said.

In 2019, the Capricorn MP said the plant had the potential to open new markets because it would meet "consumer demands locally and internationally for high quality processed fruit products".

Project 'poorly thought out' 

But Capricorn Coast pineapple growers have criticised the management of the processing plant.

Local growers say if the plant had been properly planned, the facility could have been a more sustainable way of managing their fruit supply to alternative markets.

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Brooks and Sons of Bungundarra, north of Yeppoon, are one of the Capricorn Coasts largest pineapple suppliers. Photo: Kelly Butterworth.

Bungundarra pineapple growers Barry Brooks, and his two son's Jake and Ryan, are one of the largest producers of pineapples in the region, growing around three to five million pines per year.

Mr Brooks said the project had been "poorly thought out from the start".

"The original plan for a processing plant looked good for the region, but poor planning has unfortunately caused it's demise," Mr Brooks said.

"If it had been done correctly, it could have provided value adding to the pineapple industry and other fruit industries across central Queensland."

Tropical cyclones, the 2019 bushfire and global Covid-19 pandemic have had a severe impact on the Capricorn Coasts pineapple supply in recent years. Photo: Ben Harden

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Mr Brooks also admitted the local pineapple industry was shrinking and that the supply base was not what it used to be, questioning the location of the facility.

"Pineapples are a declining industry in Australia and the fresh market demands more than what is currently grown now, and costs are causing an enormous squeeze," he said.

"All avenues to expand the industry have been explored and we're the only grower that has extra land, but we've reached our limit."

Queensland Country Life sought comment from Tropical Pineapples, but the company declined to answer our questions.

Very strong market for products

Mr Lightfoot said there was a very strong market for certain products.

"There is very strong demand for the products that are intended to be produced by this facility and that demand has only increased since people have had the opportunity to try sample products produced last year," he said.

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"The equipment and technology being used is best of breed internationally and is designed to retail all the nutritional goodness and flavour from the fresh produce that enters the facility.

"Being able to capture the freshness close to farms and provide a new customer for growers that produces new high quality food products is the main aim of the business."

In 2019, former Livingstone Shire Council mayor Bill Ludwig said the pineapple processing facility would put Yeppoon on the world stage.

The council told Queensland Country Life, that they contributed zero costs to the facility's construction or purchase of land.

"Council will not be involved in any type of organisational changes undertaken by the Hidden Valley Harvest Group, it is a company matter," the council spokesperson said.

"Council has always and continues to fully support the development and operation of a High Pressure Processing plant in the region.

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"Once operational the plant was projected to employ over 25 full-time staff and significantly value add to the food manufacturing sector of the regional economy."

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Ben Harden

Ben Harden

Queensland Country Life Journalist

Based in Rockhampton, Central Queensland. Contact: 0437528907

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