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Great Southern High Value Timber 2008 Project |
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Cash Rebate |
8.25% |
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Closing Date |
CLOSED |
| Minimum
Investment |
$12,500 (ex
GST) |
| Term of Project |
17-19 years |
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Research |
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AAG (672kb) |
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Adviser Edge (1.33mb) |
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ATO Product Ruling |
2007/70 |
Tropical timbers teak and
African mahogany have long been regarded for their natural beauty and
durability and are used extensively for furniture and appearance grade timber.
By becoming a grower in the Great Southern 2008 High Value Timber Project,
investors can commercially grow these highly valued timbers to ease pressure on
Australia’s native forests and its dependence on imports; and provide global
markets with a renewable substitute for diminishing native supplies.
The opportunity
The Great Southern 2008 High Value Timber Project provides investors with
the opportunity to commercially grow plantation teak and African mahogany
in Australia’s northern regions, which is suited to the production of tropical
hardwood species.
Investors will participate by leasing woodlots to supply sawlogs suitable
for furniture and appearance grade timber, to both domestic and international markets.
The Project will provide investors with 100% tax deductibility and expected returns from the sale of timber.
Applications received between 1 July 2007 and 30 June 2008 (inclusive), or such earlier date as the Project closes, and accepted by the Responsible Entity, will participate in the 2008 Project.
The Responsible Entity does not in any way guarantee applications will be accepted and has the right to accept or reject an application in its sole discretion.
Why Great Southern?
Great Southern is widely regarded as Australia’s leading agribusiness investment manager, with a track
record of success over 19 years and nearly 40,000 investors. Great Southern’s forestry estate is one of
Australia’s largest and more than 100 million trees have been planted to date. |
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The company’s net assets as at 31 March 2007 exceeded $714 million, including over 3 million hectares of
prime and pastoral agricultural land, owned or held by long term lease across Australia. Great Southern Limited is an S&P/ASX200 listed
company.
The industry: from native to renewable
The global high value timber industry is typified by dwindling supplies due to restraints on the logging of native
forests and illegal logging practices, coupled with increasing demand.
Demand for high value teak and African mahogany timber, both locally and internationally, has increased steadily for decades and has
intensified in recent years, driven in no small part by the rapidly expanding building and furniture industries. Demand for teak comes primarily
from China, Thailand and India, while the USA and China are currently the largest global importers of African mahogany. The Asia Pacific region
accounts for 90% of all tropical timber imports.
Supply of both teak and African mahogany is constrained in their native countries due to over-logging, dwindling supplies and resultant
restrictions. Myanmar currently dominates the global teak export trade, however it is perceived that supplies are beginning to rapidly
diminish. Malaysia, where illegal logging is widespread, is the third largest producer of tropical logs, and contributed 41% of global tropical log
exports in 2005. Globally, just 17% of total roundwood teak production was exported during 2000.
African mahogany is predominantly sourced from Africa where it is a native species; however over-logging
has resulted in increased limitations on the quantity of exports.
In Australia, high value timber needs have historically been met by native Jarrah and Karri from Western
Australia, and a range of eucalypts on the eastern seaboard – roughly 94% of hardwood roundwood removals
in 2005/06 were native-sourced. The sizable demand for high value timber in Australia far outweighs supply,
which has largely been met by imports from Indonesia and Malaysia. Each year Australia imports approximately
$500 million in tropical logs from these countries.
Continuing local and international supply shortages brought about by bans on logging of native forests and
the crack down on illegal logging, as well as a shift in consumer preference to renewable timber resources
is expected to lead to increasing demand for plantation generated tropical timber.
Experts believe Australia is poised to become a competitive contender in the high value timber industry
by utilising its advanced silvicultural practices, suitable northern growing regions and proximity to significant
markets such as South East Asia.
Project features
Your investment is supported by
numerous security features.
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The Australian Taxation
Office (ATO) Product
Ruling PR2007/70 confirms
the investment is 100% tax
deductible† in the first
year. |
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Insurance is expected
to be available (subject to
availability) to provide
security for investors in
the event of loss of timber
or income subject to the
terms of the policy. |
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An Independent Forester
is engaged to oversee
and report to investors on
the ongoing management of
the Project. |
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A stocking guarantee
confirms that there will be
a minimum of 85% of the
original number of trees 12
months after planting. |
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Great Southern pools
harvest proceeds, which
manages the inevitable risk
associated with some
woodlots performing better
than others. |
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The Project will be
diversified across two
product types, teak and
African mahogany, and across
different geographical
locations, thereby reducing
risk. |
The growing
regions
Growing regions for the Great Southern 2008 High Value Timber
Project may include Northern Territory and Queensland, or other
regions in Australia which Great Southern determines suitable for the
commercial production of high value timber hardwood.
The map below shows more specific areas being targeted by Great Southern.
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Project structure |
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Minimum
investment |
Invest as little
as one woodlot ($12,500 + GST).
Each woodlot is 0.5 hectares and
will comprise 50% of both teak
and African mahogany.
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Term
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Approximately
17-19 years after planting
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Tax
deductibility |
Investments are
100% tax deductible in the first
year of investment. The ATO has
issued Product Ruling PR2007/70
in relation to the Project†. |
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Finance options
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Flexible finance
options are available, including
12 months interest free, and a
range of principal and interest
loans. |
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No ongoing costs
(other than insurance)
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All ongoing
management costs will be borne
by Great Southern or via your
harvest proceeds. You will only
be required to pay compulsory
insurance and an insurance
administration fee. |
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Returns
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Investors are
expected to receive returns from
their investment from commercial
thinnings during the life of the
Project, and at final harvest,
approximately 17-19 years after
planting. |
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Timber sales
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Great Southern
will use its best endeavours to
sell the timber produce for the
maximum practicable price
available after consideration of
all relevant factors.
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Benefits
The Project offers an excellent
opportunity to participate in and
benefit from the Australian high value
timber industry.
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100% tax deductibility |
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An expected income return to
investors |
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Numerous security features |
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The risk management benefits
of portfolio diversification |
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Flexible finance options
including 12 months interest
free |
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Established and experienced
forestry team |
The Great Southern 2008
High Value Timber Project – an overview
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Great
Southern carefully assesses
land for the plantations
before it is included in the
Projects. Each woodlot is
0.5 hectares in size. |
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Plantation
management plans are
prepared and land is
categorised for suitability.
This includes aerial
photogrammetry techniques
and global positioning
technology. |
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Great
Southern prepares the land
for planting. |
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Plant
material is sourced from
various suppliers to reduce
risk, and the seedlings are
planted. Each woodlot will
comprise of 50% of each teak
and African mahogany. |
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Trees are monitored and
maintained on your behalf by
Great Southern, this
includes pruning, weed
control and application of
fertiliser as necessary. |
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It is expected that trees
will be commercially thinned
at different stages during
the Project. |
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Final harvest is expected to
be completed approximately
17-19 years after planting. |
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It is intended that the
timber produce obtained from
the commercial thinnings and
final harvest will be sold
or exported for use as
furniture and appearance
grade timber. |
IMPORTANT:
The information contained in this summary 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 the Great Southern 2008 High Value
Timber Project ARSN 123 529 233 (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 a suitably qualified professional. Great Southern Managers Australia Limited AFSL 240 787
is the issuer of the Project and has issued a Product Disclosure Statement (“PDS”) for the Project which details the terms of the Project. Anyone wishing to invest should consider the contents of the PDS and complete the above
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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