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Gunns Plantations WINEGRAPE 2007 PROJECT

Gunns Plantations Winegrape 2007 Project
Cash Rebate 8.00%
Closing Date CLOSED
Minimum Investment $15,750 (ex GST)
Term of Project 20 years
Research
Lonsec Recommended
ATO Product Ruling 2007/75

 
Telephone: 1800 015 023
Fax: (03) 6333 0646



 

Gunns Plantations Ltd … One of Australia’s leading agribusiness products companies.

Investors become Growers in a 20 year Winegrape Project located at Coombend, in an established premium winegrape growing region on the east coast of Tasmania. The minimum investment in the project is one Vinelot with an area of 0.2 ha, which will require an initial outlay of $17,325 (including GST).

The Original PDS and the Supplementary PDS constitute a retail offer and the Australian Tax Office (ATO) has issued Product Ruling PR 2007/75 applying to Late Growers, being those investors who apply for acceptance as Growers in the Project between 22 August 2007 and 15 June 2008.

This project is based on the production of Tasmanian grown premium and ultra premium cool climate winegrapes;

• Tasmanian cool-climate wine grapes are highly sought after;
• Tasmania is NOT suffering from a wine glut;
• The prices for Tasmanian winegrapes have consistently increased over the last four years.
• Growers in each of the previous winegrape projects enjoy the benefit of an off-take agreement with Tamar Ridge Estates, a wholly owned subsidiary of Gunns Ltd (Tasmania's largest vineyard manager and second largest winery) for the life of the project (20 years)
• GPL will contract the management of Grower's vineyards to Tamar Ridge Estates' professional management team, headed up by CEO, Dr Andrew Pirie (AM).
• ATO Product Ruling PR 2006/164 which confirms the 97% tax deductibility of the project's Application Fee (over 3 years).
• Special finance terms are available from Gunns Finance Pty Ltd until 28th February 2007.
• Research from both Lonsec and AdviserEdge.

INTRODUCING GUNNS PLANTATIONS WINEGRAPE PROJECT 2007
GPL is proud to be offering investors the opportunity to become growers of Tasmanian cool climate wine grapes in the Gunns Plantations Limited Winegrape Project 2007 (the Project). By participating in the Project prior to 15 June 2007, you become an Early Grower of 0.2 hectare Vinelots in one of the most competitively priced Projects of its kind in the market. The 0.2 hectare Vinelot will be located at the picturesque Coombend vineyard on the East Coast of Tasmania, consisting of parcels of land of both Existing Vineyard (established during 2005-2006) New Vineyard (to be established in late 2007).

GUNNS LIMITED
Gunns Limited (Gunns) was established in 1875 in Tasmania and has a 132 year history. It is listed in the S&P/ASX 200. Gunns is Australia’s largest hardwood forest products company and has a market capitalisation of circa AUD 1.1 billion (January 2007). Gunns’ operations comprise of 8 main business divisions, being plantation, agribusiness investment, timber, veneer, retail, woodchips, construction and viticulture. The company currently owns over 200,000 hectares of freehold land, which includes approximately 311 hectares of vineyard estate.

GUNNS PLANTATIONS LIMITED
Gunns Plantations Limited (GPL) is a wholly owned subsidiary of Gunns, established for the specific purpose of building a resource business for third party investors. GPL was first established in November 1999 and since that time has established 10 managed investment schemes with over $314 million of funds under management. GPL will draw upon the considerable skills and experience of the Gunns wholly owned wine business Tamar Ridge Estates for establishing and maintaining your Vinelots.

EXISTING INFRASTRUCTURE
Tamar Ridge Estates is a division of Gunns that includes a multiple award winning cool climate winery. Gunns purchased Tamar Ridge Estates in March 2003, which included 63 hectares of land under vines and the award winning winery nestled in the Tamar Valley wine region. GPL proposes to delegate all Vineyard management obligations to the Tamar Ridge Estates division of Gunns and Gunns will be contracted to prepare all of the vines required for the Project at its VINA (Vine Industry Nursery Accreditation) certified Somerset nursery.

KEY INFORMATION

Application and Ongoing Fees
This Project is one of the most competitively priced projects of its kind with Vinelots priced at $17,325 (inc. GST). In the unlikely event of a harvest in Year 1, the Grower will be charged the Year 1 Harvest Fee. In Years 2 and 3, GPL retains any Grape Sale Proceeds in lieu of charging the Vine Right Fee, the Maintenance and Harvest Fee and the Sales Commission (Ongoing Fees) and Growers only contribute the GST component of the Maintenance and Harvest Fees in Year 2 (approx $150 per vinelot) and Year 3 (approx $315 per vinelot), which are claimable for those Growers registered for GST.

Payment of the Ongoing Fees will be deducted from your Gross Proceeds Entitlement from Year 4.
 
Fee Amount How & When Paid
Application Fee $17,325 per Vinelot Upon application.
Year 1 Harvest Fee Cost to GPL of services + 10% (plus GST) Deducted from any Grape Sale Proceeds.
Vine Right Fee GPL is entitled to $550 per Vinelot per Year Included in Application Fee for Years 0-2. Included in Maintenance and Harvest Fee in Year 3. Deducted from Gross Sale Proceeds from Year 4
Maintenance and Harvest Fee GPL is entitled to a max. $3,300 per Vinelot per Year - actual cost estimated to be $2,180 per Vinelot per Year Deducted from Grape Sale Proceeds from Year 4,with Growers required to contribute approx. $150 in Year 2 and $315 in Year 3 (being the GST component of the Maintenance and Harvest Fees)
Sales Commission 2.2% of Gross Grape Sale Proceeds estimated to be approximately $88 per Vinelot. Annually from first commercial harvest (Year 4) until Year 20. Offset against Gross Proceeds Entitlements prior to any distributions being made.

Tax
It is anticipated approx. 62% of your Application Fee will be tax deductible in the financial year in which it is paid, with 18% and 16% of the Application Fee being deductible in the following 2 yrs respectively. It is also anticipated that 100% of the Ongoing Fees you pay will be tax deductible in the financial year in which they are paid.

Anticipated Returns
Vinelots are anticipated to reach their full production capacity in Year 5, when the average expected yield will be approximately 2.2 tonnes per vinelot per year . Grape sale proceeds for all Growers will be pooled. Where a Grower’s Gross Proceeds Entitlement exceeds their liability to pay ongoing fees, distributions will be paid.

THE TAMAR RIDGE EXPERIENCE
The acquisition of Tamar Ridge Estates brings a great deal of knowledge and experience in viticulture, winery management and wine marketing, while also adding to the diversity of Gunns’ operations. Tamar Ridge Estates’ vineyard is located in the Tamar Valley wine region, 45 kilometres north of Launceston. The company owns 75 hectares of vineyard that is bearing and producing quality cool climate grapes for the premium and ultra premium wine market.

The winery is capable of processing over 1,500 tonnes of grapes, and is continually being upgraded with the latest technologies to handle the expansion of grape production. The Tamar Ridge Estates winery processes the fruit from its own vineyard as well as from other local vineyards. In 2007 it expects to process over 2,200 tonnes.

Tamar Ridge Estates currently produces a range of still and sparkling wines in the premium and ultra premium categories, including the following varietal wines: Sauvignon Blanc; Pinot Noir; Chardonnay; Riesling; Gewurztraminer; and Pinot Gris. Well known brands of Tamar Ridge Estates include Tamar Ridge, Devil’s Corner, Coombend, Rosevears, Notley Gorge, Pirie Estate and Pirie South.

The Chief Winemaker and CEO at Tamar Ridge Estates is Dr Andrew Pirie. Dr Pirie is widely known as one of the pioneers of the modern Tasmanian wine industry. Dr Pirie was awarded a Member in the Order of Aus tralia (AM) for his contribution to the wine and tourism industries in Tasmania.

Tamar Ridge Estates also contracts the services of Smart Viticulture to advise ways to achieve the maximum vineyard performance and wine quality. The principal of that business is Dr Richard Smart, one of the world’s foremost viticultural consultants.

HOMOCLIME MAPPING
Dr Smart has developed a highly successful technology for locating sites suitable for growing exceptional quality cool climate winegrapes that are ideal for the production of premium and ultra premium wine. All of the project sites have been identified by Dr Smart as sites that may potentially grow icon quality Pinot Noir and Sauvignon Blanc and become regions that will be world famous for the quality of grapes produced.

The technology Dr Smart uses for land identification compares climate data, in this case for selected New Zealand vineyard regions, to climate data of Tasmania. This process is known as homoclime mapping. Using the homoclime mapping technology, Dr Smart has been able to identify and secure the most suitable sites for producing exceptional quality cool climate grapes for this Project.

Following in New Zealand’s Success
Parts of Tasmania have a climate similar to both islands of New Zealand. This is not unexpected since these places have climates influenced by the surrounding sea. Their latitudes are also similar: for example Launceston in Tasmania and Blenheim in the Marlborough wine region of New Zealand are at a similar latitude of 41°30’S. Marlborough has created a worldwide reputation for its wines, especially for their varieties of Sauvignon Blanc and Pinot Noir.

Tasmanian Premium Quality Fruit Attracts Premium Prices
Despite widespread reports of winegrape overproduction across Australia, the Tasmanian Government Department for Primary Industries and Water has found that Tasmanian producers have received an increase in the average price paid for purchased grapes over the past five years. In 2006, the Tasmanian Department of Primary Industries and Water’s Grape Crush Report revealed the average price per tonne for Tasmanian winegrapes had risen to $2,644 for red winegrapes and $2,384 for white winegrapes.

Proven Quality
Since its inception, Tamar Ridge Estates has been rewarded for continuous quality by amassing in excess of 25 trophies and over 310 medals at wine shows throughout Australia (as at January 2007). Tamar Ridge Estates has also been awarded most successful exhibitor at four Tasmanian Wine Shows and has won medals at the prestigious London International Wine Challenge. Growers can be confident that their Vineyard will be professionally managed by experienced vineyard managers in accordance with the latest viticultural techniques.

Who Purchases my Grapes?
GPL is committed to entering into negotiations for the sale of and selling harvested grapes produced on your Vinelot for the term of the project. GPL has already formed relationships with grape buyers, including Tasmania’s own Tamar Ridge Estates, and is confident that it will be able to achieve a fair market price for the grapes produced on behalf of Growers.

If GPL as Manager enters into an agreement for the sale of the Grapes to Tamar Ridge Estates, then they will purchase the Grapes on terms no less favourable to the Grower than those set out in the draft Grape Sale Agreement.

DISCLAIMER
The information contained in this Project Profile is not financial product advice. This Project Profile does not take into account the investment objectives, financial situation and particular needs of any potential investor. Accordingly, before you invest you should read the PDS and any other supplementary PDS in full. We also recommend that before making a decision to invest you consult a financial adviser or other professional adviser. Allocations of Vinelots will only be made to successful applicants that have properly completed an Application and Power of Attorney Form attached to the PDS, dated 19 January 2007. The Product Ruling granted by the Australian Taxation Office is only binding on the Commissioner insofar as the Project is carried out in an identical manner to that identified in the Product Ruling. It is in no way a guarantee of the commercial viability of the Project.
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