Six Chinese investors have signed a AUD$15 million ($15.47 million) deal for the purchase of the olive oil company previously owned by two of Western Australia’s most prominent business families, the Kailises and the D’Orsognas.
Kailis Organic Olive Groves was founded in 2001 by Mark Kailis, grandson of Kailis patriarch George Peter, and son of Peter Kailis, who founded fast food chain Red Rooster in 1972.
In 2010 the company bought the olive grove and production assets of Australian agribusiness Great Southern.
The company’s other investors included Marco D’Orsogna, co-owner of Italian goods manufacturer D’Orsogna, and Sydney investment banker Christopher Ryan. Peter Kailis owned about 30 percent, with the remaining 10 percent belonging to Mark Kailis and other family members.
Prior to the buyout, Kailis Organic Olive Groves had experienced a rough couple of years, with AUD$3.4 million ($3.5 million) in losses reported in 2009 – 2010. At its height the company owned 3,813 hectares of plantations in Western Australia, selling around 80 percent of its products to domestic markets and exporting to seven countries, including the United States.
Weakened by low international olive oil prices, the company had amassed $18 million in debt by the time it was handed over to receivers and administrators in November 2011. Scott Langdon of KordaMentha, an Australian business known for their work as insolvency and restructuring specialists, said the deal would at least secure the jobs of the roughly 100 people employed by Kailis Organic.
“It sold as a going concern with all employees transferred to the new entity,” Langdon said. “It’s a pleasing result that the organic olive business is going to continue throughout South East Asia with great prospects.”
According to The West Australian, sources close to the Kailis deal said that it was another indicator of the growing affluent class in China and other Asian countries, where more investors are seeking to diversify their wealth by acquiring large land holdings abroad.
According to the 2013 Beijing International Oil Expo, China is set to become the largest olive oil market in the world. Though consumption is still limited to the high end due its cost, lower prices could result in China consuming half of the world’s olive oil.