W.A. Blue Gum Project 2008

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