Australia's largest integrated produce company Costa Group (ASX: CGC) has finalized documentation with berry multinational Driscoll's to operate a berry production operation in China.

Under the agreement, Costa has 70% of the operation while Driscoll's has 30%, with the fruit targeted towards the Asian market and marketed by Driscoll's.

The first blueberry and raspberry farm has already been established in the Yunnan province with the initial raspberry harvest in progress, using the same substrate production under tunnels that has been applied in Australia.

In an announcement to the Australian Stock Exchange (ASX), Costa said another farming location had been selected with land preparation and planting to commence shortly.

"'This builds on the successful equally owned JV in Australia which over the last six years has grown to be the number one marketer of blueberries, raspberries,  strawberries and blackberries in the country," said Costa managing director Harry Debney, adding Driscoll's had a major expansion program in the Americas utilizing Costa's blueberry varieties.

The two companies have also agreed to work together to investigate growth opportunities on a global basis, combining their complementary skills and varieties.

"We have been delighted by the progress of the Costa-Driscoll [sic] relationship over the past six years. Costa has established the premier berry production business in Australia and also has a proven track record with blueberries in Morocco," Driscoll's CEO Kevin Murphy said in the release.

"We believe that combining our resources where it makes sense on a global basis will further make for a formidable partnership. I look forward to continuing to develop further opportunities with Costa.

In discussions with www.freshfruitportal.com for a Q&A to be published next week, Driscoll's Americas executive vice president Soren Bjorn described the announcement as an affirmation of a really productive relationship.

"This has more to do with my old job. Of course, we've had our JV with Costa in Australia for some time and it's been hugely successful," he said.

"As Costa went public in Australia last year we were in discussions with them about really expanding our relationship beyond Australia, and we had other things going on already – we license the Costa blueberry genetics for example in the Americas - it’s in Chile, Peru, Mexico, the U.S.

"What’s been announced today is an expansion of that, and that’s just a natural evolution; our joint venture has been very successful, mostly in Australia, but our utilization of their genetics has really helped expand our blueberry program in America."

He said Driscoll's focus had been becoming increasingly focused on proprietary varieties.

"Last year, of all the Driscoll’s blueberry supply less than one fifth was from proprietary genetics, but within the next five years two thirds of blueberry supply is going to come from proprietary genetics, and the Costa program has been a key part of that."

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