Investment Property – 44 Riverbank Road, Ōtaki
In 2019, Raukawa ki te Tonga AHC purchased an industrial property, 44 Riverbank Rd, Otaki for $510,000.
Constructed in the 1980's the building comprises a 730m2 warehouse with front and rear yards on 1540m2 of land. The investment in this property delivers a return of 7 per cent per annum ($510,000/$36,585.00 Rent).
The property is rented to Matta Products Limited who also have their main offices at 60 Riverbank Rd. Matta design and manufacture a range of anti-fatigue and safety surfacing systems using predominantly recycled plastics and rubber for use in playground, sport and recreation and industrial environs.
Waste Transformation Limited
Waste Transformation Limited (WTL), a company with Ōtaki connections and Raukawa ki te Tonga AHC as a cornerstone shareholder, has developed a leading waste diversion system using a proven technology that turns waste wood into valuable by-products.
Raukawa ki te Tonga AHC first invested in WTL in 2015 and has a cornerstone shareholding of some 38 per cent.
Over the past five years, WTL has moved from Proof of Concept to full commercialisation with a new plant capable of processing 200 tonnes of waste timber a month and producing, when fully operational, up to 80 tonnes of commercial charcoal.
The company’s operations are currently based at Timaru District Council’s Redruth Resource Recovery Park where its new plant, commissioned in July 2019, is diverting recoverable untreated waste timber from the landfill. This has significant environmental benefits. The Ministry for the Environment estimates that each year some 400,000 tonnes of timber are consigned to the country’s landfills, constituting around 15 per cent of the national waste stream. Waste wood is particularly challenging in that it is bulky, difficult to compact and produces Greenhouse Gases (GHG) as it decomposes.
Landfills are a huge problem in that the land use is permanently lost from agricultural, housing or business use and it’s expensive and becoming more so, given the cost of land and the associated engineering safeguards required to prevent toxic leachate from reaching groundwater or streams. Hence the need to minimise hazardous waste and encourage the re-use and repurposing of building site and demolition materials.
Charcoal, produced from waste wood using a pyrolysis process, also has the potential to replace coal as an industrial fuel source. Compared with coal, charcoal has a higher energy value, zero sulphur oxides and lower nitrous oxide emissions. Charcoal is also smokeless. WTL’s technology was originally developed by the Rikihana whanau and refined over time so that it is scaled to New Zealand conditions and environmentally compliant. Overseas pyrolysis plants require huge waste volumes to be economic.
A great deal of focus this year has been on the investment in Waste Transformation Limited (WTL). The AHC Board can now report that WTL has been approved for a grant from NZ Trade and Enterprise to develop a feasibility paper detailing how the business can be fully commercialised.
That paper will detail how the business could be managed, who it could partner with, identify any risks associated with WTL and how any risks could be mitigated. The AHC wants to assure members that it will closely manage WTL, mindful of the continuing need to provide the company with working capital. The key focus for WTL is to generate commercial sales of charcoal and, encouragingly, a recent trial with fishing company Sanford proved successful.
Taranaki Whānui Limited Secured Loan
Last year Raukawa ki te Tonga AHC provided a secured loan of $1.0 million to Taranaki Whānui Limited (TWL) to July 2021 to enable the settlement of a Crown sale/leaseback transaction. TWL is the commercial arm of the Port Nicholson Block Settlement Trust (PNBST).
TWL approached the Asset Holding Company because, as part of their Treaty Settlement, TWL received an option to purchase land owned by the Crown and then leased by to the Crown (S&L) which is valued at circa $118 million. Due to the size of the transaction with the Crown, TWL entered into a collaboration with other Taranaki Iwi to purchase the S&L properties. Under that agreement, each Iwi would receive a ROI in proportion to the funds they provided.
With the assistance of this loan TWL was able to boost their contribution by receiving an interest in the partnership.
Prior to approving this loan, the Directors engaged specialist property law firm Greenwood Roche to undertake legal due diligence on the securities provided and the terms and conditions pertaining to the agreement.
The loan provides Raukawa ki te Tonga AHC with an expected return of circa 6.5 per cent per annum and the terms of the loan are preferential to the company.
The Directors concluded that this loan was not only a good investment opportunity but also enabled Raukawa ki te Tonga AHC to establish a commercial relationship with PNBST and TWL.