Dole Food Company Inc announced that the firm and ITOCHU Corporation received unconditional approval from the Chinese Ministry of Commerce to implement the sale of Dole’s worldwide packaged foods and Asia fresh produce business to ITOCHU. The sale is expected to be completed within the next 30 days.
Dole also announced fiscal year 2012 results for the two lines of fresh produce business that will remain with the new Dole after the sale is completed: fresh fruit and fresh vegetables.
Revenues decreased 11% to $4.2 billion for the year ended December 29, 2012, primarily due to the divestitures of fresh fruit subsidiaries in Germany and Spain, which represented $539 million of sales in 2011. Fresh fruit revenues, excluding the impact of the divestitures, decreased 2% as a result of lower pricing in North America bananas and unfavorable euro and Swedish krona foreign currency movements in Europe.
“Fresh fruit performance in 2012 was below 2011, and we expect this trend to continue in 2013,” said C Michael Carter, Dole’s executive vice-president and general counsel. He will be taking the added role of president and chief operating officer in connection with the ITOCHU transaction.
“In light of the competitive fresh produce market conditions, we are assessing the new Dole’s capital requirements and other possible near-term funding resources, such as Dole’s Hawaii land holdings,” said Carter. “Potential investments could include increasing the number of fresh fruit farms owned and operated by the new Dole, and required updating of our owned vessel fleet, which has an average age of 21 years.”
After completion of the ITOCHU transaction, Dole will retain six refrigerated container vessels, ranging in ages from 14 to 24 years, as well as seven break-bulk refrigerated vessels, ranging in ages from 19 to 27 years. Three of the break-bulk vessels will continue to be used by the Asia Fresh produce business after completion of the ITOCHU transaction under a ships usage agreement between Dole and ITOCHU.
Dole also has four other break-bulk refrigerated vessels under a charter arrangement that will terminate at the end of 2013, and are currently under subcharter to a third party, and a fifth vessel under charter that is scheduled to terminate in June 2013, subject to possible extension.
The new Dole will also retain about 24,700 acres in Hawaii on the island of Oahu, of which approximately 16,500 acres are listed for sale.