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The industry: a positive global outlook
The versatility of the almond and an increased global awareness
of the numerous health benefits have been key contributors to
the industry’s rapid growth during the last 20 years.
Almonds are grown in over 40 countries, however the United
States is considerably the largest producer, contributing to
approximately 80% of the total world almond supply.
Other significant producers include Spain with 11% of global
production, followed by Greece and Australia accounting for
approximately 3% respectively.
The global demand for almonds has more than doubled over the
past decade, from 311,000 tonnes in 1998 to 657,000 tonnes in
2007.
Australia’s almond production has increased significantly during
the past five years, to 26,000 tonnes in 2007, at an estimated
gross value of production in the range of $150 million. Australia
is the fourth largest almond producer, however is anticipated to
become the second largest by 2015 following the high level of
plantings in recent years.
In 2006/07, Australia exported around 6,565 tonnes of almonds
to its two largest export destinations, India and New Zealand, and
other destinations such as the United Kingdom, France, Spain and
the United Arab Emirates.
Australia’s almond industry is well placed geographically to
capitalise on the growing demand in the Asia Pacific region.
Other key factors expected to assist in increasing its international
market share include a counter seasonal production to the US,
more reliable climatic conditions, access to good quality irrigation
water and high level of skilled management.
These have resulted in levels of productivity and quality that are
better and more consistent than other producers, and accordingly
will allow Australian almond producers to remain competitive
with the world’s largest producers, including California.
The Great Southern water advantage
Although located in the Murray Darling basin area, the properties
do not rely on the river system for water, but rather bore water,
otherwise known as groundwater. The almond groves are
situated directly above a series of underground aquifers which
hold approximately 60,000,000 megalitres of water and cover an
area of 5,600 square kilometres. Water entitlements are secured
through long term lease agreements to match the maximum
requirements of the almond grove of 15 megalitres per hectare
per annum for the duration of the Project.
The use of ground water over surface water has several
advantages. Ground water entitlements are generally more
reliable as they are not impacted to the same degree by the
fluctuations in availability, and water can be stored underground
without evaporation loss.
Timely application of irrigation water is vital to the development
and yield potential of commercial almond groves. The Project’s
drip irrigation system utilises equipment to automatically monitor
the tree’s water requirements at any given time, providing the
Project with another significant advantage.
Project structure
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Minimum
investment |
Invest in as little
as 1 almondlot ($13,727 + GST),
payable over 5 financial years:
$5,000 in 2008 and $2,182 + GST in
2009, 2010, 2011 and 2012. |
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Term |
Approximately 19
years. |
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Tax
deductibility |
The initial
application fee and the annual
management and licence fees in 2009
and 2010 are 100% tax deductible, as
confirmed by Product Ruling PR
2007/102. For further information,
please refer to Project features
below. |
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Finance
options |
Flexible finance
options are available, including 12
months interest free, and a range of
principal and interest options.
Options include financing the
initial management fee, plus ongoing
management and licence fees for up
to the first 4 years of the Project. |
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Ongoing
costs |
Investors will be
responsible for paying a fixed fee
of $2,400 (incl. GST) for ongoing
management services, licence fees
and insurance premiums for 1 July
2008 to 30 June 2012. From 1 July
2012 investors will pay a fixed
licence fee of $1,300 (plus GST)
indexed annually to CPI or 2.5%,
whichever is the greater, an ongoing
management fee equal to 45% of the
almond revenue and insurance costs,
all of which will be deducted from
the almond revenue. The insurance
cost and ongoing fees and expenses
will be 100% tax deductible in the
year incurred. |
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Returns |
Growers are entitled
to receive total almond revenue from
year 5 of the Project onwards, from
which operating fees and expenses
will, if sufficient, be deducted.
Where the revenue is insufficient to
meet these expenses, a shortfall may
be payable by growers. |
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Almond sales |
Great Southern has
negotiated a 19 year almond crop
supply agreement with Almondco
Australia Limited (Almondco),
whereby Almondco will prepare,
market and use its best endeavours
to sell the almonds from the
Project. For further information
please refer to the Product
Disclosure Statement. |
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Project features
Your investment is supported by the following:
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The Australian Taxation Office (ATO)
Product Ruling PR
2007/102† confirms the application fee in 2008 and the
annual management and licence fees for the following
two years are 100% tax deductible. Under current
taxation legislation the ongoing management fee for
2011 and 2012 should also be 100% tax deductible. |
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Full insurance is expected to be available and will provide
security for investors in the event of loss of crop or
income as covered by the policy. |
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A stocking guarantee confirms there will be an average
of 280 almond trees per hectare 12 months after the
commencement of the Project. |
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Great Southern pools harvest proceeds, which enables
investors to share equitably in the expected revenue,
regardless of differences in yields that may result from
individual almondlots. |
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• |
An independent almond expert has been engaged to
inspect the Project and report to investors on its progress. |
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• |
An investor can enter into a joint venture agreement and
participate in the Project with another investor (such as
a self managed super fund), whereby each party shares
both the costs and expected returns. |
The growing regions
The land to be used in the Project is located near Hillston in
New South Wales.
The site selection criteria included the suitability of climate for
growing almonds. Other major criteria are the water retention
aspects of the soils and a soil profile with a high suitability for
growing almond trees. Hillston is known as a production centre
for agricultural commodities including citrus, wine grapes,
cotton, potatoes and cherries.
The sites have been physically assessed by an independent
almond expert and the soils, hydrology and topography have
been subject to rigorous testing.
The Great Southern 2008 Almond Income Project – an overview
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Great Southern will lease land and
water rights for the Project at a location near
Hillston in New South Wales from Riverbank, a
registered managed investment scheme managed by
Great Southern. |
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A fully automated computer
controlled irrigation system waters the grove and
maintenance is carried out, including pest and weed
control and the application of fertiliser. |
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The Project will be comprised of
newly planted and established one year old almond
trees, on individual almondlots of 0.25 hectares. |
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Growers are expected to receive
revenue from year five of the Project onwards, from
which operating fees and expenses will be deducted,
if sufficient. |
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The almond trees will be those
recognised as being the most appropriate species to
produce almonds for sale in Australian and
international markets. |
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The trees are expected to reach full
production approximately seven years after planting,
during which time harvest yields are expected to
increase. |
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The almond groves will be managed
and maintained on behalf of investors by Great
Southern and its contractor, Great Southern Farming
Pty Ltd. |
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Great Southern has entered into an
almond supply agreement with Almondco Australia Ltd
(Almondco), whereby Almondco will prepare, market
and use its best endeavours to sell the produce. |
IMPORTANT: The information contained in this document is
by way of general summary only and has been prepared without
taking into account a person’s individual objectives,
financial situation or needs. Before making any decision to
acquire an interest in the Great Southern 2008 Almond Income
Project ARSN 127 947 960 (the ‘Project’) a person should consider the appropriateness of the information to their individual objectives, financial situation and needs and if necessary seek advice from suitably qualified professional. Interests in the Project are not yet available but Great Southern Managers
Australia Limited (AFSL 240 787) will be the issuer of the Project and intends to issue a Product Disclosure Statement (“PDS”) for the Project in 2007 which details the terms of the Project. Anyone wishing to invest should consider the contents of the PDS
and complete the attached application. The information is provided in good faith and believed by Great Southern Securities Pty Limited AFSL 240 788 to be accurate at the date of issue. However, no representation or warranty is made as to the accuracy, reliability or completeness of this
information. Except to the extent that statutory liability cannot be excluded, Great Southern Securities Pty Limited and its related entities, directors, employees, and agents accept no liability (including liability to any person by reason of negligence or negligent misstatement) for any statements, opinions,
information or matters (expressed or implied) arising out of, contained in or derived from, or for any omissions from, the information contained herein.
† The Product Ruling is only a ruling on the application of the taxation law and is in no way expressly or impliedly a guarantee or endorsement of the commercial viability of the Project, of the soundness or otherwise of the Project as an investment, or of the reasonableness or commerciality of any fees
charged in connection with the Project. The Product Ruling is only binding on the Commissioner of Taxation if the Project is implemented in the specific manner provided in the Product Ruling. |
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Simply download an Investment
Brochure/PDS above. It’s that easy! |
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