Lockyer Valley Foods targets $50m Series A to revive QLD fruit and veg processing

A Queensland-based fruit and vegetable manufacturing startup has launched a $50 million Series A funding round aimed at reviving the state's fruit and vegetable processing industry with a new factory in the Lockyer Valley.

Lockyer Valley Fruit & Vegetable Processing Company Limited has already raised $5.35 million from an affiliated cooperative and investors to acquire 55 hectares of land in Withcott outside Toowoomba, as well as pre-construction works and modelling.

The group, trading as Lockyer Valley Foods, has received development approval for the new facility with plans to start operational works in 2025. The funding round is due to close in the first quarter of calendar 2025, with pre-commitments also secured from existing investors.

"This has been in the planning stages for several years and it’s so exciting to finally be ready to break ground," says chair Murray Chatfield.

"We will not only deliver one of Australia’s most sophisticated, lowest emissions facilities; we will also secure the future of the fruit and vegetable Industry in Queensland and reduce Australia’s reliance on a variety of imported produce."

Founder and CEO Colin Dorber says the Lockyer Valley, known as ‘Australia’s salad bowl’, is vital to food security. However, growers of multiple crops have been hit hard by a lack of viable options for produce that does not meet the specs of supermarkets.

In a YouTube video he alludes to the blow dealt to beetroot growers in 2011 when Golden Circle, which had been bought by Kraft Heinz a few years earlier, shut down its Brisbane canning factory.

"In the process they effectively decimated the beetroot growing industry in the Locker Valley, and over time other segments of the industry, particularly the pineapple growers up on the Sunshine Coast, have lost market share and they have nowhere to process their goods," Dorber explains in the video.

"We can grow 10 times the volume of fruit and vegetables in the valley, particularly tomatoes, for example, and beetroot, and we're not utilising it because there's no processing facility. This means the farmers don't have a long-term outlook, their kids are not that interested [in farming] - they want to go into the big smoke where there are jobs they can get."

The project comprises a steel can production and canning facility; freezing, powdering and juicing capabilities; a pallet manufacturing plant that will recycle plastic waste to make pallets; and a bio-methane plant which will use green waste from the plant, and the surrounding communities, to take the entire facility off-grid.

Chatfield says the facility will be built in a staged approach, ensuring construction can proceed as quickly as possible with initial revenue streams feeding back in to fund further development.

"Within one year of our initial build program we will be creating significant positive revenues," he says.

"Our aim is to have a circular economy both in production, through everything being used and recycled and enabling future funding."

Against the current challenging backdrop for producers, a survey from industry body AUSVEG revealed one in three Queensland farmers were considering quitting the industry this year.

A key driver for this is the inability sell entire crops – almost everything except supermarket-acceptable fresh produce is wasted due to the lack of processing facilities.

"We will deliver security and profitability to growers and support investment and job creation in our vital food industry, not just in Lockyer Valley but also Bundaberg, the Scenic Rim, Darling Downs, Fassifern and Somerset," says Dorber.

"This is one of the most fertile growing regions in the world, and is a major contributor, year round, to Australia’s produce needs, both fresh and processed," he says.

"This facility delivers a secure food future for our country; long term growth and security for our producers, and a major reduction in waste and emissions – it really is win-win-win.

"Lockyer Valley Foods will really highlight how fruit and vegetable processing can be highly profitable from the seed to the table for Australia, whilst ensuring growers have long-term viable and profitable futures.

"The hard yards have been done, now it’s time to build, build, build."

In an October newsletter, Dorber said Lockyer Valley Foods officially became the owner of the site on Roches Road, Withcott on 24 October, executing a call option obtained "some years ago" at a fixed price.

He said that not only was the "balance sheet positive, but also debt free and able to step forward in its equity raising program, confident of success".

The newsletter also revealed that it was working with active support of Shayne Neumann, Federal MP for Blair, in an attempt to securing $50 million from the National Reconstruction Fund that will be matched by the raise.

"Lockyer Valley Foods has made some key decisions about accelerating its revenue stream and about some early build initiatives that will deliver very significant results to get things running," the cooperative stated.

"The development will be driven by the income flow, so if the National Reconstruction Fund delivers, we will do far more than we are even currently projecting to do."

In addition to Chatfield and Dorber, other directors at the company include Lester Underdown, Terry Edwards, Marie King, Mark Walsh, and Robert Munton.