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ITC Limited is a forestry company with a proud history of sawmilling and value-adding timber for over 80 years, and delivery of forest establishment and management services to retail, corporate and institutional investors since the early 1990s.
Today, ITC is one of Australia’s largest hardwood plantation forestry managers and timber processors, with more than 150,000 hectares of plantations under management across Australia and a solidwood conversion capacity of 250,000 cubic metres per annum.
ITC is active across the forestry and forest products value chain ranging from plantation establishment and management to harvesting, sawmilling, timber and woodchip sales ad export. Activities are managed through two operating divisions: ITC Forestry delivers plantation establishment and management services nationally while ITC Timber processes and value-adds high-grade, quality timbers in Victoria and Tasmania for architectural applications, furniture, flooring and construction materials.
As a wholly owned subsidiary of Futuris Corporation, a Top 200 company listed on the Australian Stock Exchange and owner of the well known rural services business, Elders, ITC has a strong mandate and backing to support its future growth.
The Project
The PDS offers investment in the ITC Diversified Forestry Project 2008.
If you invest in the Project you will be growing four different types of
timber for different end products in different locations in Australia.
The four different products are Pulpwood, Red Mahogany, Sandalwood and
Teak.
The features of the Project are summarised below and more
information is available from the Product Disclosure Statement.
Summary of the Project
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Unit of investment |
The unit of investment is a Diversified Forestry
Unit (Unit) which will comprise a fixed area (Woodlot) of Pulpwood, Red Mahogany, Sandalwood
and Teak.
The area of the Woodlot for each Product may
vary from property to property depending upon the estimated
productivity of the property. |
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Structure of the investment |
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A Land Agreement under which ITCPM grants you
a lease or profit a prendre over an area of land, or an Agreement to enter into a Land
Agreement; and |
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A Management Agreement under which you appoint ITCPM to establish, manage, harvest and market the timber grown on the area of land
on your behalf. |
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Project locations |
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Time of planting |
The Project will be planted between January 2008
and June 2009. |
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Guaranteed establishment |
ITCPM, at its expense, will replant areas of
dead or missing trees within the first 12 months of planting so
that sufficient Seedlings for a viable plantation are
established. |
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Time of harvests |
The first commercial harvest is expected to be 7
years after planting of the Project from Thinning of Red
Mahogany. Further Harvests will occur periodically until the
final Clearfall Harvest of Teak expected at age 20. |
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Fees to be paid |
$5,500 (incl GST) per Unit is payable for the Establishment
Services fee.
A Terms Payment Administration fee of $275 (incl GST) is payable
in 11 equal monthly instalments if the Grower elects (and ITCPM
accepts) payment of the Establishment Services fee by Terms
Payment. Land fees and Management Services fees are deferred and
payable as 41.5% (plus applicable GST) of
Harvest Proceeds exclusive of GST.
So long as ITCPM is able to effect appropriate insurance on
Reasonable Terms, Growers must take insurance against loss or
damage by fire or windstorm (for all Products) and theft (for
Sandalwood and Teak aged 10 years or more only) and will pay
annual insurance premiums. |
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Terms Payment |
Subject to the Grower paying an initial
instalment of 10% of the amount of the Establishment Services
fee Growers can elect to pay the balance of the Establishment
Services fee by Terms Payment (subject to the approval of ITCPM)
in 11 equal monthly repayments. |
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Project returns |
Section 5 of the PDS contains information on how
you can make an assessment of the Project returns. |
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Minimum investment |
The minimum investment in the Project is two
Units which is an amount of $11,000 (incl GST). Further
investment can be in increments of one Unit. |
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Taxation |
The ATO has issued Product Ruling PR 2007/72
from 25 July 2007 in relation to the Project. The Product
Ruling confirms tax deductibility for Establishment Services
fees and other costs which may be incurred by Growers from the
date of the Ruling as
referred to in the Product Ruling. |
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Pooling of Harvest Proceeds |
The timber produced from each Product in the
Project is pooled and marketed on a collective basis. You will
receive a share from each distribution of Project Proceeds,
based on the number of Woodlots you hold in the Project. |
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Insurance |
So long as ITCPM is able to effect appropriate
insurance on Reasonable Terms, ITCPM will arrange insurance
against loss or damage by fire or windstorm (for all Products)
and theft (for Sandalwood and Teak aged 10 years or more only).
Prior to the Clearfall Harvest Commencement Date for each
Product, Growers will pay annual insurance premiums. From the
Clearfall Harvest Commencement Date for each Product, premiums
will be paid as a Cost of Harvest and Marketing for that
Product. |
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Risks |
The Project is subject to agricultural risks,
commercial risks and general risks. Growing different species in
different regions will help to spread your investment risk. |
The Unit of Investment - the
Diversified Forestry Unit
The Unit of investment is a Diversified Forestry Unit (Unit), which comprises one
Woodlot for each of the Products, that is Pulpwood, Red Mahogany, Sandalwood
and Teak. A Woodlot is the area of land that is assessed to have the capacity to
produce the Product Yield for each of the Products as shown in Table .
The minimum investment in the Project is two
Units. Further investment can be in increments
of one Unit.
Plantations will be established on properties that have been selected on the basis
of their capability to contribute to the weighted average Productivity for each
region and species. In the case of Pulpwood this will require approximately 67%
of the area of Pulpwood Woodlots to be established in Queensland (subtropical
region) and the balance in southern Australia (temperate region).
TABLE 2: ESTIMATED
PRODUCT YIELDS AND AREAS FOR EACH
WOODLOT
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Product |
Operation |
Product Yield Per Woodlot |
Estimated
Productivity per hectare |
Approximate area of
one Woodlot |
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Pulpwood
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Total Pulpwood Product Yield
Pulplogs from Clearfall at age 10 |
175 cubic metres |
Average 240 cubic metres
per hectare of pulplogs at Clearfall at
age 10 (sub-tropical region) Average 218
cubic metres per hectare of pulplogs at
Clearfall at age 10 (temperate region) |
0.75 hectares
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Red Mahogany |
Pulplogs from Thinning at age 7* |
10 cubic metres |
495 cubic metres per
hectare of pulplogs and sawlogs over an
18 year period, which equates to a mean
annual increment of 27.5 cubic metres
per hectare per year |
0.1 hectares |
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Pulplogs from Clearfall at age 18 |
4 cubic metres |
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Sawlogs from Clearfall at age 18 |
36 cubic metres |
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Total Red Mahogany Product Yield
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50 cubic metres |
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Sandalwood |
Total Sandalwood Product Yield
Heartwood from Clearfall at age 15 |
600 kilograms |
12,000 kilograms per hectare of air
dried Sandalwood heartwood at age 15 |
0.05 hectares |
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Teak |
Sawlogs from Thinning at
age 9** |
5 cubic metres |
285 cubic metres per hectare of sawlogs
over a 20 year period, which equates to
a mean annual increment of 14 cubic
metres per hectare per year |
0.1 hectares |
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Sawlogs from Thinning at age 14 |
8 cubic metres |
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Sawlogs from Clearfall at age 20 |
15 cubic metres |
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Total Teak Product Yield |
28 cubic metres |
Note: |
The age at Thinning or Clearfall refers
to the number of years since planting.
The exact timing of some Thinning may be
varied to suit the development of the
Plantation.
Product Yields for Pulpwood, Red
Mahogany and Teak have been rounded. |
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A thinning at age 2 is
expected to produce approximately 1
cubic metre per Woodlot that is not
expected to have any commercial value. |
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A thinning at age 4 is
expected to produce approximately 2
cubic metres per Woodlot that is not
expected to have any commercial value.
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Simply download an Investment
Brochure/PDS above. It’s that easy!
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