|
|
|
Project and Finance Summary
An innovative forestry investment from a leading
vertically integrated forestry and forest products company
Woodlot Option 1 – EcoAsh®
This Woodlot Option will involve growing Eucalypt# hardwood logs to
manufacture EcoAsh® sawn timber and SmartFibre wood fibre. Scheduled
income at about 9 years of age (thinning) and about 13 years of age
(clearfall). |
Woodlot Option 2 – EcoAshclear®
This Woodlot Option will
involve growing Eucalypt# hardwood logs to manufacture EcoAshclear®
veneer and high-grade sawn timber and SmartFibre wood fibre. Scheduled
income at about 9 years of age (thinning) and about 16 years of age
(clearfall). |
Woodlot Option 3 – BassPine®
This Woodlot Option will
involve growing Radiata pine softwood logs to manufacture BassPine® sawn
timber and SmartFibre wood fibre. Scheduled income at about 13 and 18
years of age (thinning) and about 25 years of age (clearfall). Given the
longer term of Woodlot Option 3, a buy-back offer for Woodlots will be
made at around 15 years of age. |
Woodlot Option 4 – Khaya Mahogany™
This Woodlot Option will
involve growing tropical, high-value African mahogany hardwood logs to
manufacture Khaya Mahogany™ rough sawn timber for domestic and overseas
markets. Scheduled income at about 11 years of age (thinning) and about
18 years of age (clearfall). |
Woodlot Option 5 –
Diversified Forestry Offer
This Woodlot Option will create a
ready-made diversified forestry investment portfolio by combining a
fixed ratio of Woodlot Options 1, 2, 3, and 4 – at an approximate 5%
discount. Scheduled income at about 9, 11, 13 and 18 years of age
(thinning) and about 13, 16, 18 and 25 years of age (clearfall). |
Invest in a blend of forestry investments offered by
FEA Plantations - a proven forestry manager
FEA Plantations Project 2009 will offer the opportunity to blend a balanced
forestry investment portfolio across a range of proven tree species - such as
Eucalypt# hardwood and Radiata pine softwood - and to include a proportion of
high-value African mahogany.
You will be able to blend your investment across a diverse range of investment
terms, potential income streams and end products - including EcoAsh® and
BassPine® value added, branded hardwood and softwood sawn timber products and
high-value Khaya Mahogany™ - for a range of domestic and export markets.
The proportion of logs not suitable for sawn timber will be processed and
exported as wood fibre.
Take advantage of the blending opportunity that FEA Plantations Project 2009
will offer through the wide range of options that may suit your individual needs
and preferred risk and return profile - or consider taking advantage of our
ready-made Diversified Forestry Offer.
A successful forestry manager with a sound business
model
Forest Enterprises Australia Limited (FEA) is an ASX-listed, vertically
integrated forestry and forest products company established in 1985. It is the
parent company of FEA Plantations Limited (FEA Plantations).
FEA Plantations Project 2009 (Project) will be FEA Plantations’ 17th consecutive
forestry investment.
FEA is Tasmania’s largest plantation sawmiller and has been a plantation
forestry manager for more than 23 years.
In 2008, the FEA group clearfall harvested its first forestry investment project
(The Tasmanian Forests Trust No 1 ARSN 093 165 210) and delivered returns to
investors in excess of prospectus projections with a before-tax IRR of 13.3% pa
and an after-tax IRR of 7.3% pa1.
The FEA group has total landholdings of almost 92,000 hectares and manages a
plantation estate in excess of 72,000 hectares in Tasmania, northern New South
Wales and South East Queensland on behalf of more than 11,000 investors.
FEA is also a substantial forest products processor. It has a long-term contract
to purchase 290,000 tonnes per year of plantation softwood, and owns and
operates a state-of-the-art $72 million sawmill and timber processing facility
at Bell Bay in northern Tasmania.
In 2009-10, the facility aims to process 400,000 tonnes of plantation Eucalypt
hardwood and pine softwood and market these products under FEA’s EcoAsh® and
BassPine® timber brands.
FEA also manages the joint-venture SmartFibre Pty Ltd (SmartFibre) wood fibre
processing and export facility at Bell Bay.
Last year, SmartFibre exported over 500,000 tonnes of wood fibre.
For the forestry investor, FEA’s vertically integrated processing capacity
creates a value chain – from plantation to finished product.
This value chain provides the opportunity for FEA to aim to optimise returns by
offering prices for investors’ wood that reflect the higher prices FEA is able
to realise for value-added, branded products manufactured from this sustainable
plantation timber.
Forestry Expertise
FEA is one of the largest, longest-established and most experienced
plantation forestry investment managers in Australia.
Its national forestry headquarters is located in Lismore, New South Wales, and a
full time forestry team of 45 staff operates in Tasmania, New South Wales, South
East Queensland and the Northern Territory.
FEA’s highly qualified and experienced forestry management team also supervises
contractors and up to 150 of their staff on any one day.
Key FEA forestry advantages:
• Land selection: FEA only establishes plantations in
areas of Tasmania, northern New South Wales, South East Queensland and the
Northern Territory with good quality soils and an annual minimum average
rainfall of 800mm to 1100mm or more;
• Species selection: FEA uses genetically improved (not modified) seed and
seedlings and matches tree species to plantation locations;
• High planting density: A high rate of 1,200 stems per hectare are planted
for Eucalypt# and African mahogany hardwood and 1,330 stems per hectare for
Radiata pine softwood;
• Thinning: Thinning plantations during their growth provides potential
early income for investors and also potentially more valuable trees at clearfall
harvest; and
• Stocking guarantee: Investors are guaranteed a stocking rate of 90% of the
original stems planted for 3 years from the date they are registered as the
holder of the Woodlot or the commencement of general insurance cover for the
plantations, whichever is the earlier. If necessary, replacement seedlings will
be planted at no cost to the investor to maintain this minimum stocking density
during the stocking guarantee.
| |
Investment Options |
EcoAsh
Woodlot
Option 1 |
EcoAshclear
Woodlot
Option 2 |
BassPine
Woodlot
Option 3 |
Khaya
Woodlot
Option 4 |
Diversified Forestry
Offer
Woodlot
Option 5 |
|
Woodlot size |
 |
 |
 |
 |
 |
|
Timber and Products |
Hardwood Eucalypt#
sawlogs to manufacture EcoAsh® sawn timber and SmartFibre wood fibre |
Hardwood Eucalypt#
sawlogs to manufacture EcoAshclear® veneer and high-grade sawn timber,
EcoAsh® sawn timber and SmartFibre wood fibre |
Softwood Radiata
pine sawlogs to manufacture BassPine® sawn timber and SmartFibre wood
fibre |
High-value African
mahogany hardwood marketed as Khaya Mahogany™ sawn timber for use in the
furniture and building industries |
Combined:
Option 1: 4 woodlots
Option 2: 1 woodlot
Option 3: 1 woodlot
Option 4: 1 woodlot |
|
Establishment Fee2 |
$3,450 |
$3,450 |
$3,450 |
$3,450 |
$23,000
(approximate
5% discount) |
|
Investment Term3 |
14 years |
17 years |
26 years |
19 years |
26 years |
|
Expected
Returns – Thinnings Harvest3 |
Year 9 |
Year 9 |
Years 13 and 18 |
Year 11 |
Years 9, 11, 13 and
18 |
|
Expected
Returns – Clearfall Harvest3 |
Year 13 |
Year 16 |
Year 25 |
Year 18 |
Years 13, 16, 18
and 25 |
|
Buy-back Offer4 |
Not applicable |
Not applicable |
Year 15 |
Not applicable |
Option 3 woodlots
only Year 15 |
|
Land Sourcing and Management Fees |
No annual payments |
No annual payments |
No annual payments |
No annual payments |
No annual payments |
|
18% of gross Harvest Proceeds |
18% of gross Harvest Proceeds |
15% of gross Harvest Proceeds |
20% of gross Harvest Proceeds |
Option 1 and 2 woodlots 18% of gross harvest proceeds
Option 3 woodlots 15% of gross harvest proceeds
Option 4 woodlots 20% of gross harvest proceeds |
|
Pruning Fees5 |
Not applicable |
Year 3 $385.00
Year 5 $405.00
Year 7 $430.00 |
Not applicable |
Not applicable6 |
Option 2 woodlots
only
Year 3 $385.00
Year 5 $405.00
Year 7 $430.00 |
The FEA Value Chain
We don’t grow timber to produce woodchips. We aim to produce sawlogs.
An investment in forestry is ultimately an investment in forest products, and a
good forestry investment optimises the value of the end products it produces.
Where many forestry investments are predicated on the basis that all timber
produced will be sold as relatively low-value woodchips, FEA Plantations aims to
manage plantations so they can recover the highest possible proportion of
sawlogs, which should be sold at a higher price than pulplogs for woodchips.
When you invest in plantation forestry with FEA Plantations, you’re growing
timber for a range of high-value branded products with proven existing markets.
FEA selects high-quality plantation land
with 800mm to 1100mm annual minimum average rainfall and establishes plantations
at a high-density stocking rate.
Plantations are maintained, fertilised and thinned as they grow towards final
clearfall harvest.
At clearfall harvest, investors’ returns
are optimised by recovering the highest possible proportion of higher-value
sawlogs to pulp logs.
These sawlogs are processed by FEA into a
range of sawn timber and treated products for domestic and international
markets.
Logs that are not suitable for sawn timber
are processed by SmartFibre Pty Ltd, combined with sawmill residue and exported
or sold locally as wood fibre for high-quality paper and paper products, or
potentially manufactured into reconstituted boards for building products.
FEA aims to process the highest possible
proportion of investors’ timber as EcoAsh®, EcoAshclear®, BassPine® and Khaya
Mahogany™ timber products – optimising their return through value-added, branded
products.
Khaya Mahogany™ – an exciting new opportunity
The introduction of African mahogany – branded and to be marketed as Khaya
Mahogany™ by FEA – into FEA Plantations Project 2009 will offer investors the
option of investment in a high-value exotic tropical timber – managed by a
large-scale and well-established forestry and products manager.
Mahogany is the common name for a broad range of tree species – the timber from
which has been traded around the world from the middle of the 16th century.
‘True’ mahogany, of the genus Swietenia was, it is reputed, introduced to
England from the West Indies by Sir Walter Raleigh, and the popularity of the
wood increased steadily through the 18th century.
African mahogany is the name of a range of Khaya species which grow naturally in
forests in African countries from Senegal to the Congo in West Africa across to
Sudan and Uganda.
African mahogany became more commonly used in Europe towards the end of the 19th
century to supplement diminishing supplies of Swietenia mahogany from South
America.
It is widely recognised that there are reducing supplies of tropical hardwoods
globally – including African mahogany – as a result of over-harvesting and
illegal logging in developing countries, and it appears the timber resource will
continue to come under pressure.
Therefore, demand for high quality plantation grown mahogany is expected to
outstrip supply.
African mahogany is one of the world’s finest and most valuable timbers. The
heartwood has a rich, red colour, is easily worked, takes a high polish and is
strong and durable. It is also remarkably decay and termite resistant.
In Europe, the United Kingdom and the United States, African mahogany is in
strong demand for high quality furniture and cabinetry, panels, boat building,
veneers, office and shop fixtures, staircases banisters and handrails and
domestic fl ooring.
FEA is enthusiastic about African mahogany and the potential it offers.
Khaya Mahogany™ will offer investors the opportunity to potentially achieve high
returns from a recognised high-value tropical timber in demand across the world.
And, when you invest in this magnificent timber through FEA Plantations Project
2009, you have the added benefit of knowing that your plantation will be
maintained by one of Australia’s largest and most successful forestry managers.
FEA’s forestry expertise and resources have resulted in the development of a
solid track record as a forest processor and marketer of high-value branded
timber products.
Investors should be aware that African mahogany is not yet proven as a
commercial plantation tree species in Australia. Therefore, Woodlot Option 4
should be considered as having additional risks as it will involve growing a
timber species which is currently untested by FEA.
A wide range of finance options
A wide range of competitive finance
options is available for Post June 30
Investors in FEA Plantations Project 2009.
| |
Forest Enterprises Australia Limited |
United Pacific Securities Pty Ltd |
|
| |
Interest Free &
P&I Loans |
Interest Rate |
P&I Loans |
Interest Rate |
Availability |
Term and
Interest Rate |
1 year interest free |
Nil |
3 year P&I |
For indicative interest rates
please go to
www.fealtd.com
Fixed for the first 5 years and then reviewed.
Interest rates are indicative only and will be
confirmed at time of funding. |
All Woodlot Options |
|
2 year P&I |
10.75% pa |
5 year P&I |
All Woodlot Options |
|
3 year P&I |
10.75% pa |
7 year
P&I |
All Woodlot Options |
|
5 year P&I |
10.75% pa |
10 year
P&I |
All Woodlot Options |
|
|
|
12 year
P&I |
Woodlot Options 2, 3, 4 and 5 only |
|
Minimum Loan |
No minimum |
$5,000 |
|
|
Maximum Loan |
No minimum |
$500,000 |
|
Interest Only
Period Availability |
Nil |
Nil |
|
|
Loan Establishment Fee |
Nil |
$375.00 (can be capitalised) |
|
|
Deposit |
Nil |
Optional |
|
|
Repayments Commence |
31 January 2010 |
One month after the loan is financed |
|
|
How
to Apply |
Complete Finance
Application Pack |
|
|
Assessment |
See page 3 of FEA
Finance Pack |
See page 5 of UPS Finance Pack |
|
Finance does not form part of the Project and will be a separate arrangement between the investor and the financier selected.
This is a summary only of the finance options available to Investors in FEA Plantations Project 2009. Detailed information regarding finance
options is available in the Finance Application Pack. Finance applications for FEA
Plantations Project 2009 will be subject to each financier’s credit approval
process.
The financier does not sanction, guarantee or recommend the investment in any way and provides no assurance that the product is
commercially viable or that the projected returns will be achieved or are reasonably based. |
1 Before-tax return takes into account 100% tax
deductibility of investors’ costs, but does not include tax payable on harvest
proceeds. After-tax return takes into account 100% tax deductibility of
investors’ costs and includes tax payable on harvest proceeds. Calculations are
based on top marginal tax rates.
2 The establishment
fee is not subject to GST.
3 The
years stated for investment terms, thinnings and clearfall harvests are
estimates only and will be determined by FEA Plantations based on the market
conditions, the advice of the Independent Forester and the growth rates of the
plantations.
4 The
buy back offer is expected to be made when the trees are around 15 years of age.
5 The pruning fees are not subject to GST and will be increased in accordance with CPI from 31 December 2009.
6 The African mahogany hardwood trees may be pruned up to 3
times during their early growth at no additional cost to the investor.
# Eucalypt means selected species of the Eucalyptus and Corymbia
genera. The species to be planted will be identified in the Independent
Forester’s Report to be available at the same time as the PDS.
The establishment fee, pruning fees (if applicable), land sourcing and management fees and interest on fi nance are 100% tax deductible –
supported by Australian Taxation Office Product Rulings PR
2009/43, PR
2009/44, PR
2009/45, PR
2009/46 and PR
2009/47.
Past performance is not indicative of future performance and FEA Plantations is
not able to guarantee the performance of the plantations established for the
Project nor any financial return to investors.
The information contained in this publication is general in nature and does not take into account any particular individual’s financial situation, objectives or needs.
|
Simply download an Investment
Brochure/PDS above. It’s that easy!
|
|
|
|
|
