OVERVIEW
The Mediterranean Olives Project 2008 invites
subscribers to sublease one or more identifiable
allotments of land (1 hectare), for an estimated 23
year term as part of a commercial Olive Grove. Each
grove allotment will contain 250 trees, comprising
Leccino, Coratina and Pendolino (for pollination).
OLIVE INDUSTRY
Olives, for
both oil and table fruit, are consumed in many,
mainly developed, countries. Approximately 90% of
all olives grown throughout the world are used to
produce olive oil, with the remaining 10% used as
table olives. World olive oil consumption has
increased by over 41% in the past decade.
Australia continues to import at least 85% of its
consumption of olive oil and table olives, valued at
$140 million per annum, primarily from the European
Union.
About 40% of the value of the olive oil consumed in
Australia is extra virgin. Of this, about 25-30% is
Australian oil – this percentage is increasing
rapidly.
THE
OFFERING
The Project will consist of 84 hectares,
subject to land of the required quality being
available.
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Establishment fee per
hectare: $16,005 (incl. of
GST) - minimum 1 hectare |
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Financial Year 2 fees per
hectare: |
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Management Fee: $8,745
(incl. of GST) - minimum 1
hectare |
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Irrigation Lease: $962.50
(incl. of GST) - minimum 1
hectare |
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The fees set out above
change from year to year
thereafter and are subject
to adjustment in line with
returns as detailed in
Section 4 of this PDS and
are subject to CPI
indexation. From Financial
Year 4 onwards, rental is
also payable. |
BENEFITS
Water and
Irrigation
Irrigation water will be sourced from bores which
draw underground water from the Loddon Deep Lead,
which is not part of the Murray Darling Basin. At
present, there is no restriction on the full water
licence allocation to the Estate, nor is there any
current discussions of such a restriction in the
future;
Olive expertise
The Project Manager has engaged De Masi Olive Groves
Pty Ltd as the Principal Sub-contractor for the
Project. De Masi Olive Groves Pty Ltd is associated
with the Di Masi group of companies which have a
long association with the olive industry in Italy.
In addition an Italian educated and based olive
expert with Australian olive growing experience, Mr
Rocco Frezza, is the Principal Horticultural
Consultant;
Italian Cultivars
Italian cultivars which are prospectively the most
suitable varieties for the climate, soil, water and
overall environment at the Project’s location at
Serpentine, Victoria will be planted;
Extra Virgin Olive Oil
The olive oil aimed to be produced will be of the
highest “extra virgin” quality;
Estate
The soil and climate of the Estate have been
assessed as most suitable for growing olives
generally and for the chosen olive cultivars in
particular;
Sales Contracts
By the time of the first harvest of olives in this
Project the total volume of olives produced from the
Estate will be sufficient to permit the Project
Manager to consider one or more of the following
markets for the olives and for the olive oil
(a) a “boutique” style for sale within Australia
and/or for export;
(b) export on a “non boutique” basis under its own
label; and
(c) sale to domestic purchasers.
The ultimate decisions will depend on what appears
to be the best way to optimise the prices achieved,
which may vary during the life of the Project;
Pooling of Proceeds
Pooling of proceeds from harvest. By pooling the
harvest and net proceeds, the risk of less
productive Grove Allotments is spread across, and
borne by, all Growers;
Agriculture Insurance
Insurance against loss or damage to growing olives;
Joint Venture Growers
The structure of the Project allows two applicants
to participate in the Project as joint venture
Growers who contribute in different ways but share
the proceeds in equal shares;
Taxation
Growers should be entitled to an immediate tax
deduction being 100% of the total Application Amount
payable.
Product Rulings to that effect have been issued by
the Australian Taxation Office.
THE
PROJECT
The Project involves the cultivation of olive groves
for the harvesting and sale of extra virgin olive
oil over a period of approximately 23 years,
terminating on 30 June 2031. However, so far this
company has sold olive oil from previous projects
only for domestic use, but is actively pursuing
export options as volumes from these projects
continue to rise.
The Mediterranean Olives Project ARSN 095 573 872
(“Project”) is a managed investment scheme
registered under the Corporations Act 2001.
Mediterranean Olives Estate Limited ACN 091 024 396
(“Project Manager”) is the Responsible Entity and
manager of the Project.
The Project is to be carried on at Serpentine, near
Bendigo in central Victoria (“Estate”). The Project
Manager leases the Estate from an associate,
Mediterranean Olives Land Pty Ltd ACN 087 862 771
(“Land Owner”) pursuant to a Head Lease. The Project
Manager will then sublease, under the Grove Lease,
the Estate to Growers in one hectare allotments
(“Grove Allotments”).
Each Grower will enter into Project Agreements with
the Project Manager. The Project Agreements consist
of a Grove Lease, a Management Agreement and an
Irrigation Lease and Licence Agreement.
Pursuant to the Management Agreement, the Project
Manager will provide administration, maintenance,
marketing and selling services, harvesting and sale
services, and transportation services to the Grower.
Pursuant to the Irrigation Lease and Licence
Agreement, the Project Manager will lease to each
Grower the irrigation system required.
Each Grove Allotment’s olives will be jointly
harvested, processed and sold with each Grower being
paid a proportion of the gross sale proceeds based
on the proportion of Grove Allotments that the
Grower subleases, less the Grower’s expenses and
outstanding liabilities under the Project
Agreements.
If unforeseen expenses in relation to fertiliser
and/or insect issues arise, the Project Manager is
entitled to convene a meeting of all Growers. The
Growers may, by majority vote, agree to meet such
expenses, in which case these expenses will be borne
between the Growers in proportion to the number of
Grove Allotments held in the Project by each Grower.
FINANCE
Growers are able to borrow from Mediterranean Olives Financial Pty Ltd, a company associated with the Project
Manager.
The loans from Mediterranean Olives Financial Pty Ltd will be for a period of over five years at an indicative
fixed interest rate of approximately 11.95% per annum on the reducing principal. Under the terms of the loan,
Growers will be required to pay interest and repay principal as set out below by way of direct debit. Instalments of
principal may be repaid earlier than on the dates set out without penalty.
There is no loan establishment fee payable
in respect of this finance package.
Growers are able to borrow up to 80% of either:
(A) both the Application Amount and the fees payable on 31 October 2008 (both exclusive of GST) ie a loan of
$18,660 per hectare; or
(B) only the Application Amount (exclusive of GST) ie a loan of $11,640 per hectare.
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