Growers supplying stricken vegetable processor Cedenco Foods are relieved they will be paid for this season’s crops.

However, they anxiously await the sale of the company and how it might affect their contracts next year.

HortNZ has contacted with the 40 growers in Hawke’s Bay and Gisborne who supply Cedenco, and chief executive Peter Silcock says they are happy their Cedenco contracts will be honoured.

‘It’s business as usual as far as this season is concerned,’ he told Rural News.

However Silcock says growers are anxious to see who will buy the company and how it will deal with suppliers. Growers sign an annual contract with Cedenco to supply vegetables including tomatoes, corn, peas and pumpkins.

Most Cedenco growers completed their planting three months ago and the crops will be harvested by April next year.

Receivers Brendon Gibson and Michael Stiassny, KordaMentha were called in by ANZ National last week following ‘a breakdown in governance and ownership issues’.

The move is linked to problems facing Cedenco’s former parent company in the US, SK Foods.

SK Foods, a Californian-based grower and processor of tomato and other vegetable products, is owned by businessman Scott Salyer.

It went bankrupt earlier this year after a scandal involving its directors.

It was sold to Singapore company Olam International for $US39 million in June, but ownership of the NZ-based Cedenco operation remained with Scott Salyer’s family trust.

Cedenco reportedly owes $40 million to creditors including ANZ National.

However, the bank is providing seasonal funding to allow Cedenco to buy crops planted under contract.

Gibson says it is working with suppliers.

Cedenco has 88 full time staff and 410 seasonal staff at its Gisborne and Hawke’s Bay processing plants. The receivers hope to complete the sale of Cedenco next year.

Gibson says it is in the fortunate position of having funding from ANZ National to continue running the business until the sale.

‘We are working with a strong management team and are reassuring current employees, the large seasonal workforce, customers and suppliers that it will be business as usual and we are not looking for a fire sale,’ he says.

A group lobbying against foreign control of New Zealand companies says it warned the Overseas Investment Office about Cedenco and its link to SK Foods last year.

However, Campaign Against Foreign Control of Aotearoa organiser Murray Horton says the OIO wrote backing saying there is nothing to investigate.

‘This is another instance of the body charged with ‘oversight’ of foreign investors turning a blind eye to anything that could be seen as an impediment to the relentless takeover of this country by transnational corporations,’ says Horton.

The ANZ Banking Group has also appointed receivers into Cedenco’s Australian operations.

Meanwhile, Cedenco Foods was founded in 1985 by Gisborne brothers Dean and Cedric Witters, Kaiaponi Farms.

It processed tomatoes, sweetcorn, kiwifruit, apples and pumpkin into paste, powders and dried forms.

Following a share float in 1994, the tomato processing business was transferred to Australia and the operation continued on a small scale in Gisborne.

However, by 1999 the local operation had started to grow once more, with acquisition of Watties’ bulk frozen sweetcorn and pea operation.

American-owned SK Foods bought a 55% stake in Cedenco in March 2001, and in July 2003 bought out the minor shareholders.

In August 2008 Cedenco was in the news as senior executives of SK Foods became caught up in an American probe into corruption and bribery.

In July 2009 SK Foods was sold out of bankruptcy to Olam International, with Cedenco retained by SK Foods’owner Scott Salyer’s family trust.