Comvita has bought the apiary business of Hawke's Bay Honey in Hastings, for an undisclosed sum.

Hawke's Bay Honey has 3000 beehives located throughout the region and will provide Comvita with additional security of supply of Manuka honey as well as becoming the sixth regional branch for Comvita's wholly owned apiary business, says Comvita CEO Brett Hewlett.

Comvita already has apiaries in Northland, Waikato, Gisborne/East Coast, Wairarapa and Whanganui.

'We're building our honey supply capacity towards our strategic objective to own fifty per cent of our own supply of honey,” says Brett.

'The primary advantage of ownership of supply is the mitigation against continuously escalating costs of Manuka honey charged at the ‘farm gate'.

'Year-on-year cost increases of Manuka honey have been the greatest contributor to the supressed and volatile reported earnings for Comvita. We are evolving our business model so that we have much greater control over volume, quality and traceability of honey we purchase.”

Comvita also successfully completed Phase 1 of its Apiary Management System (AMS), a propriety tool that enables greater control of the expanding apiary business network including full traceability of honey supply back to individual hives.

The purchase of Hawke's Bay Honey and the timing of the AMS Phase 1 completion are key indicators of the scale Comvita is building in honey supply, says Brett.

'We are on target this year to have in excess of one third of our total honey supplies from our 100 per cent owned apiaries. The balance of our supply will come from long-term contractual agreements and partnership arrangements, which we value highly.

'Honey supply partnerships with Comvita involve a long term supply contract as well as access to significant knowledge of Manuka plant propagation. This is in addition to volume and value enhancing apiary production methodologies which we have built up over nearly 40 years.”

Hawke's Bay Honey has been a valued supplier of high quality Manuka honey to Comvita for more than six years.

Current owner, Jonathan Wroe is to be employed by Comvita to manage Comvita's Hawke's Bay region apiary operations.

'We're looking forward to meeting our new land owner partners and building a strong and enduring relationship. We believe this apiary business has significant potential to grow and expand in the region and will benefit from Comvita's substantial resources in Manuka honey production,” says Brett.

Comvita hive numbers have doubled in the last two years to 23,000 operating from six regional branches employing 70 staff. Comvita plans to grow to 30,000 hives in the next two years.

Phase one of the Apiary Management System, extraction management is deployed at the Kerikeri, Waikato and Whanganui Extraction Plants on time and within budget for the 2013/14 harvest.

'Deployment included installation of specialised equipment, training and standard operating procedures for all branches and the AMS Extraction application is now actively being used by Comvita teams to view production data, plant output and inventory,” says Brett.

'The apiary tracking phase will then be fully deployed in time for the 2014 spring build-up.”

Areas with settled summer/spring conditions like Northland experienced a reasonable honey flow resulting in an average crop this season. Areas in New Zealand that experienced overall lower temperatures during January resulted in lower than average crops.

'It is climatic conditions that have the biggest impact on honey harvest. There has been much media hype about the impact of the Varroa mite and colony collapse but the apiary management practises adopted by Comvita mean that these biological threats are not a major issue for us here in New Zealand.

'There are more bees and beekeepers today in New Zealand than there have ever been in our history and we have the ability to increase hive numbers quickly. Colony collapse as experienced in the USA and Europe over many years does not exist in New Zealand and we don't regard it as a credible threat to our business.”

Comvita bought Kiwi Bee Medical Ltd in June 2008 and Waikato Honey Products in November 2011.

Kiwi Bee Wairarapa was established as an operating unit in December 2011. Kiwi Bee Whanganui was acquired in October 2012 and Kiwi Bee East Coast (Gisborne) was purchased in September 2013.