Israel's Mehadrin to grow avocados in Morocco

• Published date: 21 April 2021
• Author: Aviv Levy
• Date: 21 April 2021

Real estate and food growing company Mehadrin (TASE: MEDN), which for many years was identified with citrus cultivation, has also seen the potential in avocado pears, and, as it pointed out in its financials, it has "almost ceased new orchard planting and is mainly planting avocado strains."

Last year, about 60% of Mehadrin's new plantings were of avocado plantations, amounting to some 650 dunams (163 acres), out of a total of over 1,050 dunams (263 acres) planted in 2020. Mehadrin's total area planted with avocado trees thus reached 7,500 dunams (1,875 acres), almost 20% of its total plantations area. Avocados also represent one of Mehadrin's main sources of revenue, accounting for 30% of turnover last year, although citrus fruits still accounted for 50%.

Mehadrin has now decided to expand its avocado growing business overseas. It has signed an agreement in Morocco, under which it will grow crops outside Israel for the first time. Under the agreement, signed with a Moroccan company with which Mehadrin had already collaborated in the past, the parties will lease at least 5,000 dunams (1,125 acres) in Morocco, and will jointly invest NIS 30 million (80 million Moroccan dirhams) over the first three years of activity.

The start of activity is subject to obtaining the regulatory approvals required for forming a joint company and for leasing the plantation from the Moroccan government. Mehadrin will own 51% of the company. To the best of its knowledge, the plantation's maximum annual output will be some 10,000 tonnes of avocado. The avocados to be grown will be sold by Mehadrin and its partner mainly in Europe. Fruits unsuitable for export will be sold in Morocco.

Mehadrin CEO Shaul Shelach explains: "In order to grow, Mehadrin has to become a company that, while its main activity is still in Israel, creates additional sources of activity in other places. That will also be beneficial for our agriculture in Israel, because that way we shall be able to give better service all year round to our customers in Europe.

"Morocco is a country with good growing conditions, and with much lower costs than in Israel, and it is a little closer to our main markets in Europe," Shelach said. "Our next moves overseas will be in the southern hemisphere, where, apart from finding lower costs, we shall also be able to grow fruit that ripens when it is out of season in Israel." Shelach estimates that, on the basis of the current agreement, the activity in Morocco could amount to a...