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W.A. Blue Gum Project 2008

Current WA Blue Gum Projects
See Our Current Projects
W.A. Blue Gum Project 2008
Cash Rebate 8.25%
Closing Date CLOSED
Minimum Investment $14,250 (ex GST)
Term of Project Approx. 10 years
Research Adviser Edge 4¼ stars
ATO Product Rulings 2007/103 (Joint Venture Growers)
2007/104 (Growers not in Joint Venture)
 
Telephone: 1300 888 511
Fax (03) 9642 4435
Overview
The W.A. Blue Gum Project 2008 offers a medium term opportunity. The project involves investors subleasing three or more identifiable allotments of land (1 hectare each) for an expected 10 year term as part of a commercial Eucalyptus globulus (Blue Gum) plantation. Each hectare will contain between 1,000 and 1,250 trees.

Finance
All participating Growers may borrow up to 80% of the Application Money from Albany Financial Pty Ltd, company associated with the Project Manager. Amounts borrowed are to be repaid in monthly instalments by way of direct debit over the period ending on 15 June 2013. Each instalment is of both principal and interest. Interest is charged on the reducing principal at an indicative interest rate will be approximately 11.95% per annum (see Section 2.7 of Part B of the PDS). There is no loan establishment fee payable in respect of this finance package.

Pulpwood Industry
The continued reliance on paper and paper products by developed countries and the increased consumption of these products by developing countries is leading to an increase in demand for the raw materials required for paper production. Hardwood fibre, extracted from Blue Gums is the preferred raw material for the production of high quality paper. In fact, most mills require that some, if not all, of their timber input be hardwood fibre.

The Project
The Project is offering about 500 hectares for allocation. It can also accept oversubscriptions, subject to suitable land.
 
Establishment fee per hectare: $5,225 (incl. of GST) – Minimum of 3 - $15,675
Ongoing fees per Hectare:
  Lease: $440 (incl. of GST)* - Minimum 3 - $1,320 p.a.
  Rental: $110 (incl. of GST)* - Minimum 3 - $ 330 p.a.
  *subject to CPI
Other fees:
  Harvest, transport costs : to be deducted from harvest proceeds
  Harvest supervision fees; 3% plus GST of net harvest proceeds
  Incentive bonus : 15% of excess return above $14,000 per hectare (indexed)
  Insurance: 0.6% - 0.7% of insured value
Finance: Finance is available

Key Benefits
Full Agreed Price ‘Offtake’ agreement with a ‘Higher Price’ exclusion
The harvested timber will be sold to W.A. Chip & Pulp Co Pty Ltd (jointly owned by the Marubeni Corporation and the Nippon Paper Company) provided that the Project Manager can negotiate a Higher Price with any other potential buyers. Of course WA Chip & Pulp Co has the option of meeting that Higher Price.

Industry experts manage your Investment
W.A. Blue Gum Ltd has employed noted industry experts to assist with the management of the project including WACAP Treefarms Pty Ltd as Forestry Contractor, jointly owned by the Marubeni Corporation and the Nippon Paper Company and URS Australia Pty Ltd as Forestry Supervisor, which has over 30 years experience in the Australian forestry sector.

Tax Effectiveness
Your Project costs should be 100% tax deductible in the financial year to which they relate if you participate in the Project on or before 30 June 2008.

Promoting Ecologically Sound Plantation Forestry
 The establishment of hardwood plantations in Australia reduces the harvesting pressure on native forests throughout the world, particularly on the tropical forests of Asia and the South Pacific. Additionally, plantations help relieve salinity and soil erosion and create a sink for greenhouse gasses.

Government Support
 The Federal Government has recently renewed its backing for the “2020 Vision” of trebling plantation forest areas in Australia in the period from the mid1990’s to 2020 to 3 million hectares.
  
Some Interesting Facts about Woodchips
• It takes between 6 & 8 woodchips to make a single sheet of A4 paper
• There are approximately 100,000 woodchips in a typical tree
• One green tonne of woodchips, is worth about $75 a tonne on the world market. Compared to about $60 a tonne for coal and $30 a tonne for iron ore, woodchips are a valuable export product.
• Prior to being processed Woodchips contain approx. 47% water
• Wood chip represents 4% of our domestic timber value add
• The value add between the equivalent volume of woodchip to paper is approximately 6.3 times
• Japan accounts for two-thirds of the world’s total imports of woodchips, and it also owns a large majority of the world’s woodchip carrier ships.
• Native forest woodchips and plantation woodchips vary greatly in colour

W.A. Blue Gum Project ARSN 092 289 266 is a managed investment scheme registered under the Corporations Act 2001. The Project involves the establishment of Eucalyptus globulus (Tasmanian Blue Gum) plantations for the harvesting and sale of timber.

The Project is to be established on land in the south west of Western Australia. The land offered under this Product Disclosure Statement has an unusually high anticipated yield of wood. The land will have a weighted average mean annual increment ("MAI") of not less than 34 cubic metres per hectare per annum. This means that it is anticipated that at the end of 10 years growth, approximately 340 cubic metres of wood per hectare will have grown upon the land.

The Project Manager will divide the Project Land into allotments of 1 hectare each. The minimum area leased by each Grower is 3 hectares. Growers will contribute a minimum of $15,675 on a GST inclusive basis (being the amount necessary to establish and plant 3 hectares of plantations at $4,750 plus GST per hectare) and thereafter in multiples of $5,225 (including GST) for each extra hectare.

In addition to the payment of $4,750 (plus GST) per hectare, Growers are required to pay both an annual sum for rental of the leased property and fees for the ongoing management of the Plantations. The first annual sum for rental will be $400 (plus GST) per hectare (indexed from 30 June 2008) and is payable on 30 November 2008 and thereafter on the 30 September in each year. The first annual sum for management will be $100 (plus GST) per hectare (Indexed from 30 June 2008) for Plantation management, payable on 30 November 2008 and thereafter on the 30 September in each year.

Subsequent amounts for both rental and plantation management will be indexed in each year to take account of inflation.

It is a feature of this Project that a Grower is granted an option in respect of the second rotation by way of coppice rather than replants. The Grower is not required to make any decision nor to pay any money, until the time of the first Harvest. At that stage the Grower will have the opportunity to decide whether to participate in the second rotation.

The cost of such participation is fixed at the outset at $3,600 exclusive of GST per hectare indexed from June 2008. The annual management fee will be determined at the time of exercise of the option and rent charges will continue as under the initial rotation (i.e. $370 (plus GST) indexed per annum per hectare). It should be noted that it may be that at the time of the first harvest, expert forestry advice will be that a completely new planting rather than coppicing is to be preferred. W.A. Blue Gum Limited is the Responsible Entity and manager of the Project. The Project will continue for the period ending up to 26 years after the date of the last acceptance by the Project Manager of an Application from an intending Grower (so as to accommodate the second rotation option) unless otherwise determined by the Project Manager or the Growers.
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