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Great
Southern’s water management
As a major participant in the Australian agricultural sector, Great Southern
is committed to monitoring the threat of climate change and drought
conditions and managing the changing environment in relation to our
operations.
Overall, we are currently well placed in relation to this issue, with access
to adequate high security water, rainfall catchment on farm, private dams,
regulated ground water and river supply, and the ability to purchase
temporary transfer water as required. Importantly, growers will not bear the
costs for any additional water Great Southern has been required to purchase
for its existing investments.
Some of our operations located in the southern half and on the eastern sea
board of Australia
have been affected by water related issues, but overall these sites have
access to adequate water and we have managed the impact to our investments.
This is largely due to our scale and water management strategies, including
the geographic spread of our properties, rigorous land selection protocols
and the development of investments which are well suited to the locations in
which they are established.
Great Southern has recently appointed a National Manager, Water Resources
and Development. Tom McKeon, who has extensive experience in irrigation,
development, general farming and resources management, is now managing all
water related issues across the range of Great Southern operations, with the
objectives to secure and manage our current water assets and to build on
these for future requirements.
As a valued adviser we would like to provide you with a detailed water and
climate update on our operations. Please follow the links below to go
directly to a particular investment.
Great Southern seeks to maximise investment opportunities while remaining
focused on the productive performance of our operations to ensure we deliver
value for investors and other stakeholders over the long term. Our
specialist teams carry out environmental best practice methods and will
continue to deliver our national approach to the management of water
resources.
Further information will be available in the Great Southern News Update, in
the coming month. You will be able to access this on the Great Southern
website at
www.great-southern.com.au. Alternatively, for more information please
contact Great Southern head office
on 1800 258 348.
Vineyards
The total Great Southern vineyard estate comprises more than 2000 hectares,
located across a variety of key growing regions Australia-wide. Of this
estate, approximately half are located outside the Murray Darling catchment
area – which has been the main wine grape growing region impacted by dry
conditions resulting in a severe restriction in irrigation allocations.
While Murray River inflows have been below
average for the past 24 months, the current Great Southern vine plantings
which are fed by the system have sufficient water entitlements to meet
current production requirements. This has involved the purchase of a
relatively small quantity of temporary transfer allocations from within the
Murray Darling system. To date the company has been able to secure the
majority of water required and we expect to finalise outstanding water
requirements before the end of 2007.
Thanks to sound management techniques, our vineyards have come into the
season with full soil moisture profiles and water management strategies
across all vineyards help to minimise the impact of water shortages going
forward. Additional soil moisture monitoring probes were installed on
all vineyards to assist with irrigation applications, and a water budget
model was introduced to calculate on-going water requirements.
Great Southern’s asset acquisition strategy for planned new vineyard
developments in 2008 is expected to ensure purchased assets are able to
access sufficient high security water supply.
Almonds
The Great Southern and Rural Funds Management almond investment projects
source 100% of their water from an underground aquifier and have sufficient
licensed volumes to meet the current needs of the project. Although
located in the Murray Darling basin area, the properties do not rely on the
river system for water, providing investors in this project with a unique
competitive advantage.
The current plantings have sufficient secured entitlements to meet the
requirements of the trees at full production.
Great Southern Limited also has access to sufficient groundwater entitlement
to service the planned 2008 development. To ensure security of daily
extraction capacity and peak delivery supply, we have planned to develop
extra bores in this area to service the property. Test bore licenses
have been obtained and drilling is expected to commence in December.
High value timber
The high rainfall areas of northern Australia in which our high value
timber plantations are being established have not experienced drought
conditions.
Among the determining factors in the creation of Great Southern forestry
investment opportunities is the ability to secure land in suitable growing
regions (in terms of water balance), matched with the species’ inherent
ability to cope with periods of drought and also abundant water supply to
maximise production.
This is a major strength of our High Value Timber investment project. We
have identified several regions of tropical northern Australia
as being low drought risk and matched the most appropriate high value timber
species to grow in those regions.
Khaya senegalensis,
native to sub-Saharan Africa, is reputedly
one of the most drought-tolerant of the African Mahogany species and has
been established by Great Southern in the tropical Douglas Daly region of
the NT where reliable rainfall and deep soils occur.
Teak, the other species grown as part of our High Value Timber project is
also highly tolerant to a wide range of climates and is very well suited to
the areas of tropical northern Queensland in which it is being grown by
Great Southern. Teak tolerates a wide range in temperatures and periods of
severe drought.
Beef Cattle
Water plays a vital role in supporting Great Southern’s beef cattle
operations in two ways – providing cattle with sufficient drinking water and
sustaining the pastures from which cattle source feed.
Importantly,
the Great Southern beef cattle operations are primarily non-irrigated,
relying on natural fed systems such as run-off and bores.
We have a broad
geographic spread of land including beef cattle properties in the high
rainfall north of Australia (spanning QLD, NT and WA), known as our
‘northern operations’, as well as a ‘southern operation’ including
properties in NSW, Tasmania and southern QLD. This is a deliberate risk
management strategy employed by Great Southern.
Currently, our cattle operations across
Australia are coping well with access to water,
particularly in the northern part of Australia
where the majority of our herd is located and which has experienced good
rainfall over recent months.
While drought conditions in parts of southern
Australia
and on the eastern sea board have impacted water availability to a number of
our cattle properties, we have been able to apply a range of strategies to
minimise the impact. These have included moving cattle on properties
experiencing reduced rainfall to other properties.
Despite some prolonged dry weather in parts of northern
Tasmania and on King
Island
where a great deal of our southern operations are located, the past four
months have brought some much-needed good rainfall to this region.
Olives
None of the olive grove properties included in Great Southern’s olive income
projects have been directly impacted by drought.
A key feature of the Great Southern 2007 and 2008 Diversified Olives Income
Projects is their location, which provides access to sustainable and well
managed underground aquifers in the Moore River
region of Western Australia.
Great Southern has secured adequate ground water allocations to meet the
current water needs of the groves.
The 2005 Project, located in the Preston Valley
region of southern WA is serviced by a well-stocked private dam with
substantial catchment areas. Following good rainfall in the region
over recent months, this large dam (470ML) is currently at full capacity and
is more than capable of meeting the current requirements of the trees. The
2006 Project, located in the Avon Valley of WA, has access to underground
water via a series of bores on the property, also serviced by substantial
and well-stocked catchment areas.
As one of the few major olive grove operations located outside the Murray
Darling catchment area, the Great Southern olive investment projects provide
investors with a distinct advantage in terms of its geography and access to
water.
Additional locations for the 2008 Project are still being reviewed and
assessed, but a crucial factor will be access to reliable water supply.
Plantation
timber
Great Southern’s plantations are non-irrigated,
relying on rainfall and soil-stored water.
Our hardwood plantations are geographically diverse and are located in high
rainfall areas across Australia. Rainfall across the
majority of the estate, whilst generally below average, has been sufficient
to support the growth of the trees.
Great Southern’s hardwood plantation operation now spans all Australian
states as well as the Northern Territory. While the impact of
climate is at times unpredictable and unavoidable, we reduce this risk to
growers through geographic diversification of plantations and by pooling the
proceeds of the harvest for each individual project. Therefore, all
investors enjoy the same returns per woodlot no matter where their
plantations are located.
While we have experienced underperformance in some regions due to a lack of
rainfall over recent years, some mitigation has occurred as a result of good
rainfall in other plantation regions.
The eucalypt and acacia species grown as part of the Great Southern
plantation projects are a hardy species native to Australia and are well-suited to
our demanding climate. Moreover, given the timeframe of the plantation
project there is ample opportunity to benefit from any upside in increased
rainfall through to harvest age in regions currently subject to below
average rainfall.
IMPORTANT: The information contained in this
document is by way of general summary only and has been
prepared without taking into account any person’s individual
objectives, financial situation or needs. Before making any
decision to acquire an interest in a Great Southern Project
(“Projects”) a person should consider the appropriateness of
the information to their individual objectives, financial
situation and needs and if necessary seek advice from a
suitably qualified professional. Great Southern Managers
Australia Limited AFSL 240 787 is the issuer of the Projects
and has issued a Product Disclosure Statement (“PDS”) for
each Project which details the terms of the relevant
Project. Anyone wishing to invest should consider the
contents of the relevant PDS and complete the attached
application. For a copy of a current PDS please contact
Great Southern Securities Pty Limited at 16 Parliament
Place, West Perth WA 6005, telephone (08) 9320 9700 or 1800
258 348. This update on water management for the Projects is
current as of 29 October 2007. Obviously drought conditions
and lack of water may remain a risk over the life of the
Projects. The use of water resources may be subject to
changes in regulations and allocation policy in the future.
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