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Application Process
Any applications for the Project are now
required to be completed on the
new Application Form provided (the new form
states the SPDS has been issued).
If any applications are received on the previous
Application Form the following process will occur:
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The investor’s funds will be held
in trust. |
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The investor will be advised that
a
SPDS
has been issued and they will be provided with a
copy. |
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The investor will be advised we
are required under the Corporations Act to
provide them with the
SPDS
and a 1 month right to withdraw their
application. |
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However, we will also provide
to the investor
a form under
which they can
acknowledge
that they:
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are
satisfied with the contents of the supplementary
PDS |
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wish to continue with the
application; and |
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do not wish to exercise their
right to withdraw their application. |
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The investor can then choose to
sign and return that form to us to continue with
the normal application process. |
Product Ruling (PR 2009/36) &
Investment Deadlines
An investor paying with "cash" must have
their Application accepted by Macro no later than 31
May 2009 and they must have paid i.e. cheque,
electronic transfer etc by 31 May, in full.
An investor using finance must have their
Application accepted by Macro no later than 31 May
2009 but they have until 15 June 2009 to provide
written evidence of finance to Macro and they then
have until 30 June to actually pay.
2009 Grain Co-Production Project
Once launched the 2009 Grain Co-Production Project (Project) will
enable investors to invest in the production of wheat, barley and canola
crops on various properties located across the Australian Grain-belt.
The Australian Grain-belt includes regions within Western Australia
(WA), New South Wales (NSW), South Australia (SA), Victoria (VIC) and
Queensland (QLD) (see map below).
The Project will operate for three seasons with each season commencing
from planting in approximately April/May of each year and finishing at
harvest, typically in November/December of the same year. Investors
will plant a crop for each of the 2009, 2010 and 2011 seasons.
Professional farmers will provide the land, equipment, inputs and expertise in
order to plant, manage and harvest the investors’ crops. The farmers benefit
from the access to additional cash-flow and the sharing of risk with investors.
In addition, the farmers will share in any upside returns from the investors’
crops – an extension to the Australian ethos of share farming.
The grain produced from each property will be pooled from across various
production zones to form the Project Pool. The Project Pool is a key component
to managing the investors’ production and price risk.
The wheat, barley and canola in the Project Pool will be managed and sold
to various established buyers for on-sale to domestic and international
markets.
Investors are expected to receive annual returns from the sale of the grain in
the Project commencing in Year 1, with the majority of their investment capital
and returns received at the completion of the 2011 season.
The aim of the Project is to achieve consistent and attractive annual returns
to investors from the sale of the harvested crops each year.
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Domestic and International Markets |
WHEAT
Wheat is grown and traded globally with the “Big 5” (the US, Australia,
Canada, Argentina and the EU) normally accounting for approximately
80% of internationally traded wheat each year. Australia is a key player in
the international wheat market, accounting for approximately 11-16% of
internationally traded wheat each year.
The Australian wheat market operates with a highly competitive and
deregulated domestic and export market with producers having access to
well established systems in which to sell their grain.
BARLEY
Australian barley has two main uses:
• Feed for livestock, such as cattle
• Malting for brewing.
The Australian barley market is effectively deregulated with producers able to
sell barley to any buyer on the domestic market or to any licensed exporter
for the international market.
The majority of Australia’s barley crop is exported each year, with Australia
being one of the largest exporters of barley in the world. Australian barley
accounts for approximately 32% of internationally traded malt barley and
20% of internationally traded feed barley annually.
CANOLA
Canola is the main oilseed crop produced in Australia with an average
production of 1.3 to 1.5 million tonnes per annum and is grown across WA,
VIC, NSW and SA. Oilseeds are a significant component of the food industry
and their products are major ingredients in global food and feed value chains
where they are part of a very large global business.
In Australia, canola is grown to produce seed, oil and meal. Canola oil is the
main product of the seed and the by-product of this oil extraction is canola
meal which is supplied to the stock feed industry.
Canola is a crop with strong demand and established markets both
domestically and internationally. It is Australia’s largest oilseed export with an
average of 1 million tonnes exported each year to Japan, China, Pakistan and
Bangladesh. By international standards Australia is a relatively small producer
of oilseeds however, because of it’s generally high quality it has developed
important sales markets.
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Demand for Australian Grain |
Wheat, barley and canola are Australia’s most significant grain crops with
Australian producers growing approximately AUD $5 billion worth of wheat,
AUD $2 billion worth of barley and AUD $1 billion of canola each year.
Australia has a reputation of producing high quality grain with a high proportion
of Australia’s wheat, barley and canola sold and exported to Asian and Middle
Eastern buyers. Australia’s proximity to Asia gives growers an advantage to
capitalise on established markets such as Japan and South Korea as well as
the ever expanding markets of Indonesia, China and India.
Recent high grain prices have been the result of tighter world supplies with
the medium term outlook for international grain prices remaining strong and
the consumption forecast to remain steady.
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MACRO FUNDS AND AACL
Macro is authorised by ASIC to act as the Responsible Entity for the Project and
is a related party to the Project Manager - AACL. Macro is a funds management
business with extensive experience in investment management, financial
compliance and investor services and reporting. For further information on
Macro, please visit their website at macrofunds.com.au.
AACL is the developer of Grain Co-Production and will manage the day to
day operations of the Project under contract from Macro. AACL will source
suitable farmers and land for the Project as well as monitor and report on the
progress of investors’ crops during the season.
CONTRACT FARMERS
Experienced professional farmers are sourced to provide the land, equipment,
inputs and expertise to produce the crops in the Project. The Contract Farmers
share in the upside returns of the crops with investors.
EXPERT ADVISERS
Expert agricultural consultants will provide ongoing crop inspections, reports
and advice to AACL in relation to the crops in the Project each season. AACL
has an established grain marketing team which will provide expert price risk
management advice in regards to the protection and enhancement of the
value of the grain in the Project Pool each season. |
2009 GCP
Project Features
ACCESS TO A MAJOR AUSTRALIAN INDUSTRY
Investors have largely been unable to directly
invest in the Australian grain industry due to the
capital requirements and a lack of opportunity. The
Project will provide investors with direct access to
one of Australia’s most established industries.
DIVERSIFIED CROPS AND LOCATIONS
Each season the Project will provide investors
with a diversification of crops (i.e. wheat, barley
and canola) and a diversification of growing regions
and farmers.
NO INCREASE IN SUPPLY OR MARKET DISTORTIONS
The Australian Grain-belt is restricted to
rainfall zones and as such the majority of available
land to produce grain is currently being utilised.
The Project will only grow wheat, barley and canola
on established properties and is not expected to
grow any more grain than is already currently grown.
NON-IRRIGATED PRODUCTION
The majority of wheat, barley and canola crops
in Australia are grown on non-irrigated land. It is
expected that nearly all of the crops in the Project
will also be grown on non-irrigated land and as such
will not have any reliance on water allocations or
access to water entitlements.
SHORT TERM INVESTMENT TIMEFRAME
The Project is different to almost every other
agribusiness investment opportunity in that it aims
to provide investors with an annual return
commencing Year 1, whilst their investment period is
for three seasons only.
DOMESTIC AND EXPORT MARKETS
Mature and established domestic and
international markets exist within the grain
industry in order to sell wheat, barley and canola
giving investors a degree of certainty in regards to
sale and payment for their produce.
TAX DEDUCTIBILITY
An application has been submitted to the
Australian Taxation Office for a Product Ruling for
the Project. The ruling is expected to confirm that
all fees incurred by Growers, including the initial
investment, will be 100% deductible in the year in
which they are incurred.
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Investment Summary
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Unit of Investment |
A Co-Production Unit or CPU. |
A CPU is an area of land
expected to produce the wheat, barley and
canola each season. |
|
Investment per CPU |
$4,400 inc GST |
Covers the costs to plant
the 2009 season crop. |
|
Minimum Investment |
6 CPU’s or $26,400 inc GST |
Investors can increase their
investment by 1 CPU at a time. |
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Term |
3 growing seasons – 2009,
2010, 2011 |
A wheat, barley or canola
crop will be planted each season with the
investor’s commitment ending after the
harvest and sale of the 2011 season’s crop. |
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Ongoing Costs |
There are various ongoing
costs including the planting of the 2010 and
2011 season crops. |
The ongoing costs, including
the 2010 and 2011 planting costs are
expected to be funded from the proceeds of
the sale of the wheat, barley and canola in
the Project (full details relating to
ongoing cost will be set out in the Product
Disclosure Statement for the Project once
issued). |
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Taxation |
Investment in the Project is
anticipated to be 100% tax deductible.** |
** A Product Ruling has been
applied for but the ATO is still assessing
the application at the time of print. |
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IMPORTANT: Macro intends to release the 2009 Grain Co-Production Project (Project) in
March 2009. No offer for investment in the Project is being made under this publication.
The Project has been registered with ASIC and the ARSN is 132 571 245. A product
disclosure statement (PDS) for the Project will be made available when the Project is
released. The PDS will be available here in due course. The information contained in
this publication is a summary only, is general in nature and does not take into account
any particular individual’s financial situation, objectives or needs. Prior to acquiring an
interest in the Project, prospective investors should seek independent financial and legal
advice and should consider the PDS in deciding whether an investment in the Project is
appropriate for their needs. Applications will only be able to be made on an application
form attached to the PDS for the Project once released. Macro anticipates the Australian
Tax Office (ATO) will provide a product ruling for the Project (Product Ruling). If issued
the Product Ruling will not expressly or impliedly be a guarantee or endorsement of the
commercial viability or investment soundness of the Project nor of the reasonableness or
commerciality of fees to be charged. The Product Ruling will only be binding on the ATO
if the Project is implemented in the specific manner provided in the Product Ruling.
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