Hidden Valley Harvest liquidation: Yeppoon company goes bust during construction

The Queensland company was in the midst of building a pineapple food processing plant when the costs of the construction, legal action and economic downturn led it to only having $497 in the bank and owing almost $1 million to a local builder.

Vanessa Jarrett

4 min read

June 29, 2022 - 6:36PM

Former Federal politician Andrew Robb was a director of the parent company of Hidden Valley Harvest who have gone into liquidation. Mr Robb resigned earlier this year citing concerns on the "due diligence" of the company.

Rockhampton

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A company that had grand plans to build the first pineapple cannery on the Central Queensland coast has fallen into a $6.8 million liquidation after the cost to construct the facility blew out.

The company, Hidden Valley Harvest (Facility), had plans to revolutionise the industry and put the Australian fruit in the global market.

The project was so impressive it even gained the attention of the Australian Government with a $5 million grant in 2018.

When the company collapsed, the warehouse facility was close to completion, with about 85 per cent of construction done.

The subsidiary company filed for liquidation on March 7 this year.

The directors at the time of the liquidation were Jim Stewart and Michael Cranny.

A statutory report filed to the Australian Securities and Investments Commission by liquidator Jason Bettles of Worrells Solvency and Forensic Accountants on June 6 included a breakdown of the company’s demise.

It was estimated the company has an outstanding debt of $6,823,743 with unsecured creditors owed $2,139,071 and secured creditors owed $4,684,672.

According to the report, the company had just $497 cash in the bank.

The warehouse had been 85 per cent completed before construction stopped when the builders weren't getting paid.

The company directors claim the company’s insolvency was due to “adverse legal actions, cost overruns on the construction of the company’s food manufacturing facility, unwillingness of lenders to provide additional funding as well as the unfavourable economic conditions caused by the effect of the COVID-19 pandemic”.

Mr Bettles said in his report the company may have been insolvent since at least June 2021, if not earlier.

Mr Bettles wrote in the liquidation report it appeared that until its food manufacturing facility was operational, the company “was not in a position to generate sufficient income to meet its liabilities and thus, until the facility was operational it relied on funding from secured lenders and related parties”.

The crowd gathered at the site of the 85 per cent completed pineapple processing factory at Hidden Valley.

The liquidated company owned Lot 23 Pineapple Drive, Hidden Valley, where the warehouse building had been partially constructed.

The land alone was estimated to be worth $1.5 million.

An on-site auction of the property was held on June 22 by Knight Frank Rockhampton, on behalf of the liquidators.

The property was sold as is, with the 85 per cent partially built warehouse, for $4.6 million to Keppel Brand, a Yeppoon food manufacturing company that has plans to expand.

The property had a partially completed warehouse and attached office building.

The Commonwealth Bank holds a first registered mortgage over the Pineapple Drive property and is owed $735,206 in a company business loan and a further $3,949,466 from a guarantee the company provided for facilitates advanced to the parent company, Valley Harvest (Group) Pty Ltd.

The bank accepted the liquidators’ proposal to auction the commercial property.

Former federal Minister Andrew Robb. (AAP Image/David Crosling)

Former politician Andrew Robb was previously a director of the parent company.

Mr Robb was a Liberal Party politician from 2004 to 2016 and was also the Trade and Investment Minister from 2013 to 2016.

An official sod turn of the construction of the state-of-the-art facility at the Yeppoon site was held in December 2019, which Mr Robb attended.

Mr Robb told The Australian in May that he resigned from the parent company this year because he had concerns about the running of the project.

Mr Robb was contacted by this publication but was unable to be reached.

Rockhampton-based small business ASM Builders was awarded the construction contract for the facility and ceased work on the project in February 2021.

ASM Builders is owed $754,744 for work completed, $105,378 in interest as of March 15, 2022 and adjudicators fees of $100,788.

The building company had filed legal action against Hidden Valley Harvest (Facility) for the non payment, prior to the liquidation.

Land tax over the company’s commercial property is also owed – a total of $8,365.

John Bauer, Livingstone Shire Council Mayor Bill Ludwig, Federal Member for Capricornia Michelle Landry, Director of Tropical Pineapples and Hidden Valley Harvest Joe Craggs, Principal of ASM Builders Sam Milfull and Director of Harvest Group Andrew Robb at the sod turning in 2019.

THE GOVERNMENT GRANT

The liquidation report notes the “distribution of funds received under the government grant”.

It is noted that another company, Tropical Pines Pty Ltd, applied for the grant on July 29, 2017.

There have been various figures for the grant and this report states the grant was for $5,227,200.

According to the report, upon approval of the grant, Tropical Pines Pty Ltd engaged the parent company, Valley Harvest Group, to facilitate the building and operation of the food processing facility.

It is alleged there was a falling out and the construction of the facility was transferred to the parent company.

The entirety of the government grant was paid to the now liquidated Hidden Valley Harvest (Facility) who said they used it to pay the builders, contractors and suppliers for the construction of the facility.

Lot 23 Pineapple Drive, Hidden Valley, sold for $4.6 million at a liquidators auction.

Mr Bettles notes in his report they are liaising to find out further accounting details on how the grant money was spent and have requested the government department provides copies of the grant application submitted by the company and details of each of the grant payments made to the company.

Capricornia MP Michelle Landry announced the funding at the time and spruiked how the project would boost the local area by generating economic activity and provide a more sustainable way of managing fruit supply.

Ms Landry told this publication this week she had previously met with affected stakeholders regarding ongoing issues with the construction of the Hidden Valley Harvest processing facility.

She also said she spoke to the office of then-Deputy Prime Minister Barnaby Joyce earlier this year and asked them to contact the Department of Infrastructure to investigate construction issues and assist the affected contractors and suppliers.

Questions have been raised as to why the company was given the $5 million-plus grant if it didn’t have the funds for the construction of the facility.

Ms Landry said there were “stringent funding guidelines that must be adhered to along with mutually agreed upon construction milestones”.

“The Australian Government enters into funding arrangements with good faith and we expect all funding parties to do the right thing by suppliers and contractors when the agreement is carried out,” Ms Landry said.

“I will be writing to the new Infrastructure Minister to get clarification on what will now occur with the Australian Government grant and ensure all affected parties are not left worse off with the company’s liquidation and sale.”