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The Most Valuable Tropical
Hardwood in the world |
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Over A$100,000 per tonne
(A$100 per kilo) |
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Aromatic Oil in its
Heartwood, used as a
fixative base in the world’s
most luxurious fine
fragrances |
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Extracted oil sells for
US$2,000 per kilo (i.e. $2
million per tonne) |
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All parts of the tree are
used, including remnant
Heartwood and all Sapwood |
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Wild Santalum Album (Indian Sandalwood) is on the World Conservation Union’s Threatened Species Redlist |
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Wild resources occur in
countries with unstable
governments, unsustainable
harvesting and black
markets, which are expected
to be fully extinguished in
4-8 years |
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Government research since
1985 |
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WATER! Lake Argyle capacity
is approximately 30 times
the volume of Sydney
Harbour• Be a grower for
just $12,925 (including GST)
per woodlot (Woodlot = 1/6th
hectare, 85 trees) |
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Be a grower for just $12,925 (including GST) per woodlot (Woodlot = 1/6th hectare, 85 trees) |
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Annual Lease and Management
fees of $1,200 per year over
12 years |
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Ability to defer Lease and
Management fees each year –
forfeit up to 20% of gross
proceeds |
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Pay a total of around
$30,000 per woodlot, expect
to receive $200,000 before
manager’s bonus of 30%, highest real $$$ return in market! |
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Research by all 3 research houses: Coming Soon - Adviser Edge
& AAG, Lonsec |
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100% finance available |
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12 months interest free on
20% deposit |
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ATO
Product Ruling (PR2009/53)
confirms 100% tax
deductibility |
What you need to know
Why you should consider this as a suitable
investment option in 2009?
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Indian Sandalwood is the
most valuable tropical hardwood in
the world. The oil which is extracted
from the tree is the base ingredient for top
shelf perfumes from Channel, Christian
Dior and Calvin Klein. Furthermore,
Sandalwood is used from cradle to grave in
both the Buddhist and Hindu religions with
500 million incense sticks burnt each day. |
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The TFS Indian Sandalwood
Project 2009 offers the potential to
achieve the highest return of any
agribusiness project in the market place
with less considered risk compared to other
agribusiness investment options. |
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Agribusiness, MIS (Managed
Investment Schemes) or forestry investments
offer a 100% tax deduction and can
assist in tax planning to facility a broad
range of wealth creation strategies. |
What is the track record?
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Indian Sandalwood has grown
in value by 21%, each year for the
past 17 years. A combination of
deforestation and poaching has resulted in
this sacred tree fast disappearing from its
natural environments and is now expected to
be extinct within 5 years. |
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In 1997, TFS recognized the
opportunity to develop an Indian Sandalwood
plantation in Kununurra, far north Western
Australia. Today TFS are a 100% vertically
integrated grower, manager, processor and
distributor of sandalwood products
world-wide. TFS are not only the pioneer of
this industry; they are also the largest
“commercial” plantation manager / owner of
Indian Sandalwood in the world. |
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With the first Indian
Sandalwood trees planted in 1999 (under MIS)
and requiring 15 years to maturity, TFS will
have its first harvest in 5 years time. |
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Independent research confirms
the investment that TFS has made in
infrastructure, forestry staff, research and
development which is likely to result in TFS
meeting or surpassing growth projections. |
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Recent independent testing
conducted on oil samples (prior to maturity)
confirms that the quality of the oil
produced meets strict requirements of
international perfumes houses. |
How sound is this investment?
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Agribusiness investments have
a number of risks that need to be
considered. Each product has unique
risks which are specific to the species and
growing regions. Consider water –
without water, trees will not grow! The TFS
Indian Sandalwood Project is the only
forestry investment in an irrigated
plantation. The TFS plantations are in
Kununurra which is on the edge of the Ord
River Irrigation Area, Australia’s largest
and cheapest in-land water supply. |
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Independent research is
available from Agribusiness Specialist
research companies like Lonsec, Adviser Edge
and Australian Agribusiness Group which
confirm that TFS Indian Sandalwood is a
stand-out offering in the market place and
with the highest
research ratings. |
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Independent research on TFC,
Tropical Forestry Corporation (listed as TFC
on the ASX) is available from many leading
stockbrokers including Ord Minnett and JB
Were who confirm that TFC is in a strong financial
position, debt free and are uniquely placed
to benefit from changes in the market for
sandalwood. |
What are the issues associated
with the environment and tax rulings?
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The tax deduction is
assured as the product comes with a
Product Ruling from the Australian Tax
Office each year. |
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TFS Indian Sandalwood is
considered an “ethical investment” option as
TFS have invested heavily to receive ISO
Quality Standard across all aspects of their
operation. Furthermore, in 2006, TFS won
the WA Water Recycling Awards for water
conservation and management. In 2008, TFS
received a Prime rating from Oekom Research,
a specialist ethical investment research
house from Europe
pre-qualifying TFS as a preferred company
for ethical investors. |
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According to Gurdeep Chawla,
President of the Sandalwood and Essential
Oils Association and also President of the
Indian Sandalwood Association – “Ironically as it may seem,
Australia may be the savior of the Indian
Sandalwood species in the world trade,
fulfilling demand in international markets”. |
What
is the current market?
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The current official supply
of Indian Sandalwood is 500 tonnes
per year from the annual auction held in
Tamil Nadu, India in November of each year.
The current consumption of Indian
Sandalwood is 3000 tonnes per year based
on amount of product released each year into
the market. |
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In addition to perfumes
which only account for 10% of the market,
sandalwood is used in many other products
including medicine, fine art, handicrafts, attars
and incense sticks. |
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46% of all perfumes released
since 1750 contain sandalwood oil. |
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200 new perfumes or
fragrances come out each year containing
sandalwood. |
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A cure for skin cancer?
Sandalwood oil has been
found to contain cancer
fighting qualities and a
cream is in the final stages
of development in the US at
John Hopkins Institute.
This is the first Western
use of sandalwood in
medicine – it has been used
for medicinal purposes
throughout India and Asia
since 2000BC. |
What
is the demand?
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Demand greatly exceeds supply
as clearly illustrated in the increase in
price for Indian Sandalwood. The price of
wood has increased from $5,100 per tonne in
1990 to $138,732 in 2008 – compound
increase of 21%. The price of oil is
$2M per tonne. |
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TFS have already pre-sold
40% of its first 5 years of oil supply
to Lush and Albert Vielle with more
contracts to be announced shortly. |
What are the indicative returns?
TFS Indian Sandalwood offers the
potential to achieve the highest return
of any agribusiness project in the market
place. Subject to the investor’s financial
position, personal tax rate and other key
factors – investors can expect to triple
their investment not accounting for the tax
benefit.
Is there finance available and if
so, how does it work?
TFS offers full finance through the Commonwealth Bank of Australia.
While this is a “full doc loan”, the investment
in the plantation is the asset for
security purposes. Investors need to show that
they can make their monthly commitments for the
selected term to secure 100% finance.
A broad range of other finance solutions can
also be considered subject to your personal
financial situation.
The Company
TFS, a publicly-listed Western Australian
company (ASX Code: TFC), has become a global
pioneer, managing the largest plantation of
Indian Sandalwood (Santalum album) in the
world.
Dwindling wild supplies and demand centred on
thriving Asian nations produce exciting market
dynamics for this ancient ingredient. Indian
Sandalwood features in incense, perfumes,
carvings, medicines and worship around the
globe.
With this established demand and an ideal
environment in Western Australia’s Kimberley
region, TFS recognised the investment potential
that plantation-grown Indian Sandalwood offers.
Using Santalum album seeds originally
sourced from India, TFS has established over
1,700 hectares of vast plantation forests in the
Kimberley region, making this the largest Indian
Sandalwood plantation in the world.
TFS is now a vertically integrated Sandalwood
company through the acquisition of Mount
Romance, the leading global distiller of WA
Sandalwood oil. This provides TFS with a
stronghold in the global Sandalwood industry,
increasing the company’s intellectual property
and market penetration internationally.
The Location
Indian Sandalwood has been grown in Western
Australia’s Ord River Irrigation Area (ORIA)
since the 1980’s, when trial plots were
established by the Western Australian
Government’s Forestry Department.
Foresters identified the region’s high levels of
sunshine, suitable soil/clay properties and
average daytime temperatures of between 30 to 40
degrees Celsius as optimal conditions for the
growth of Indian Sandalwood.
The region’s main water source, Lake Argyle, is
a 1,000km2 man-made dam (11 times the surface
area of the city of Paris) that holds over 30
times the volume of water in Sydney Harbour.
Water from this dam flows down through Lake
Kununurra to irrigate the Indian Sandalwood
plantations, and is easily replenished by the
Kimberley’s annual 800mm of monsoonal rain.
It is this combination of an arid-tropical
climate and the abundance of water that has
proven WA’s Kimberley region an ideal location
for the cultivation of Indian Sandalwood.
TFS was established following the success of the
early trials into Indian Sandalwood cultivation.
Why Invest?
Indian Sandalwood is the most valuable species
of Sandalwood (Santalum) in the world, achieving
prices of over $100,000 per tonne of heartwood
(Tamil Nadu Forestry Department Auction –
November 2008).
This tropical hardwood has been used for
thousands of years in perfumes, religious
worship, carvings and incense. Asia, Europe, the
Middle East and North America all use Indian
Sandalwood for its fragrant heartwood found at
the core of the tree. An essential oil can be
extracted from this heartwood and features in
some of the world’s most popular fragrances
including Chanel, Christian Dior and Calvin
Klein.
The gap between supply and demand has been
growing rapidly which has seen the price of
Indian Sandalwood increase by over 21% compound
for the past 17 years. TFS invite you to take
advantage of their opportunity.
TFS
Business - Sandalwood
TFS is a specialist Sandalwood company, with
over
10 years of experience in
the cultivation of Indian Sandalwood in the
Kimberley.
TFS has over 35 full time staff based in
Kununurra including a selection of tertiary
qualified foresters, agronomists and
agricultural scientists who live and work on TFS
estates. Under the guidance of internationally
respected foresters, TFS has developed unique
intellectual property into the establishment and
management of this parasitic tree.
To maximise the quality and growth of the trees
it produces TFS has invested heavily in
infrastructure and research. A custom-built
nursery and seed orchard help to produce premium
seedlings for planting. All land is carefully
selected by TFS' team of experts based on the
suitability of its soil type for growing Indian
Sandalwood trees and its access to an abundance
of water. TFS has an ongoing research designed
to enhance techniques and deliver better returns
to investors.
The Project
TFS Sandalwood Project 2009 (TFS 2009) (ARSN – 135 373 938) is the
company’s thirteenth Indian Sandalwood project
under management.
TFS 2009 has a minimum investment of one sixth
of a hectare for the entry price of $11,750 plus
GST, with volume discounts available.
The Australian Taxation Office (ATO) has issued
(PR 2009/53) which confirms that all fees paid in
relation to TFS 2009 are fully tax deductible in
the financial year they are paid.
INDEPENDENT
RESEARCH
TFS has received 4 star ratings or equivalent
recommended ratings from 3 independent
researchers.
Fees per One Sandalwood Lot
Establishment
1 to 5 lots $12,925
(incl GST)
6 or more lots $12,375 (incl GST)
Annual Fees
Annual Fee $1,100 (incl GST)
Rent $220 (incl GST)
Investment Options
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Pay Annual Fees and Rent
annually. |
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Defer your Annual Fees and
Rent and forgo 1% - 20% of
your harvest proceeds. |
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Share the harvest proceeds
with your superannuation
fund or spouse to maximise
your returns. A minimum of 2
lots is required for this
Joint Venture option. |
Payment Options
Establishment fees may be paid in full or
over a period of 12 months by an interest free
loan. A deposit of 20% of the Establishment Fee
will be required upon application.
TFS are also offering a finance package by its
preferred financier, MIS Funding No.1 Pty Ltd.
TFS finance package offers:
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100% finance |
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An interest rate of 8.45% as
at March 2009 – limited
offer only |
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Up to 10 year term – 3 years
interest only followed by
principal & interest |
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Loans can include the
nominated application fee
TFS provides marketing and
back office support |
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