FEA Plantations Project 2008

Land Selection
FEA targets land with average minimum annual rainfall of between 800-1100mm and soils which are fertile and have deep soil profiles.  Land quality is crucial to the successful growing of plantations.

Species Selection
FEA plants species which have the ability to produce both Woodchip for pulp and paper and Sawlogs for sawn timber production. Matching of different species to different sites assists FEA with its targeted Growth Rates – site conditions will always vary.

High Density Stocking Rates
FEA’s standard stocking rates are targeted at 1,200 – 1,300 stems per hectare. A higher stocking provides an opportunity for a Thinning harvest, and a quality plantation following Thinning, that can be ‘grown to maturity’.

Thinning
Removing some trees at the right time enables the best trees to grow larger while potentially providing an early income from the Thinning harvest. Larger trees at Clearfall harvest potentially provide higher opportunities for higher value end-market applications.

Longer Rotation
FEA’s forestry investment Woodlot Option 1 (Hardwood structural sawn timber and Pulpwood), targets a Rotation length of approximately 13 years.  Woodlot Option 2 (Hardwood Veneer & select grade sawn timber), targets a Rotation length of approximately 16 years.  Woodlot Option 3 (Softwood structural and select grade sawn timber) will use a 25 year Rotation regime.

Wood Flow Modelling & Forest Products Inventory
FEA measures, models and schedules the harvesting of its managed estates with the aim of maximising forest product value of each plantation coupe – ‘smoothing’ wood flows assists in managing and providing a long term sustainable resource to potential markets.
 

An investment in FEA Plantations Woodlots provides a powerful financial tool for advisers and investors incorporating portfolio diversification opportunities, tax effectiveness and cashflow flexibility. 

•	Four investment options offered (EcoAsh, EcoAsh Clear, BassPine and Blended Option)
•	Minimum investment (0.5ha) is $3,150 (plus GST)
•	Harvest income in approximately years 9, 13, 16, 18 and 25 (fully assessable)
•	There are no ongoing fees for Option 1 (EcoAsh) and Option 23 (BassPine) other than optional insurance
•	Tax-effective – 100% tax deductibility supported by ATO Product Rulings
•	A timber “wood purchase agreement” will be in place
•	Insurance against fire is available and paid annually by growers

Growing World Demand
World demand for plantation timber is growing each year.  It is anticipated that demand for timber products will increasingly be satisfied from plantations as environmental pressure slows traditional harvesting of native forests.  When you invest in forestry with FEA, you’re investing in a timber plantation that will provide forest products for one of Australia’s leading vertically integrated plantation forestry and forest products companies.



Declining access to native forests
Access and harvest levels within many of the world’s native forests continue to decline. Traditionally, Australia’s building products and the majority of woodchips exported from Australia and used in the production of paper have been sourced from native forests. With availability shrinking, an excellent opportunity exists for plantation grown hardwood to provide an alternative to replace the declining native forest supply.

Flexible timing of harvest
A key advantage of forestry projects such as those offered by FEA Plantations is that the timing schedule for harvesting can be flexible. If market conditions are not ideal, the harvest (whether thinning or final harvest) can simply be reduced until they improve. Meanwhile the plantation will continue to grow in volume and value and can be reassessed at another time.

Forestry as a managed investment
Managed forestry investments offer access to an asset class (Agribusiness), which is negatively correlated to traditional asset classes such as equities and property, which provides portfolio diversification and potential for increased returns and reduced risk.

Tax Effective
Australia’s current income tax laws allow for the costs of establishing forestry plantations and consequently investor’s project costs, to be 100% tax deductible in the financial year they are incurred. The ATO through the issue of Product Ruling No’s. PR 2009/1, PR 2009/2, PR 2009/3, PR 2009/4 corresponding to Woodlot options 1,2,3 & 4 respectively has confirmed this tax deductibility for the Project for investors who are accepted into the Project on or before 30 June 2009.

Australia’s Competitive Position
Asian countries are currently the most active world export markets for plantation timber products. Australia’s proximity (and shorter shipping times) to Japan and other key Asian markets, relative to other major suppliers such as Chile and South Africa, is a significant factor in providing cost-competitiveness.

Environmental benefits
Plantations can provide a number of environmental benefits, including reduction of pressure on native forests, helping to reduce salinity and soil erosion, improving water quality, a potential source of renewable bio-energy and creating sinks for greenhouse gases.

Government support
The Australian Government encourages the establishment of plantation forestry through its policy statement ‘Plantations For Australia: The 2020 Vision’ .This policy is aimed at trebling the nation’s 1997 resource base from 1 million to 3 million hectares by the year 2020.