W.A. Blue Gum

Overview

W.A. Blue Gum Limited (“WABG”) invites prospective Growers to sublease 5 or more identifiable allotments of land (1 hectare each), for an estimated 10 year term as part of a commercial Tasmanian Blue Gum (Eucalyptus globulus) plantation. Each hectare of Project Land is likely to produce the same amount of wood regardless of whether the land is planted or Coppiced.

Each hectare that is planted is likely to contain between 800 and 1,000 trees (with an average of about 900). Each hectare that is Coppiced is likely to contain approximately 650 stump stools, from which an average of 1.5 stems will develop, thereby yielding an average number of stems similar to planted land.

The W.A. Blue Gum 2021 Project offers the opportunity to become a grower of Tasmanian Blue Gum trees and to carry on the business of commercially growing timber plantations. Growers in the Project will, in exchange for the payment of an initial Establishment Fee and ongoing lease, tending and other fees, receive a sub-lease of an allotment of Project Land on which the trees will be grown over a period of approximately 10 years. The minimum investment is 5 hectares of land.

The timber Harvested from the Project Land will be sold, most probably, for use in the paper industry and Growers will be entitled to a share of the pooled proceeds (if any) according to the number of hectares of land sub-leased.

In addition to the sale proceeds at the conclusion of the Project, Growers should be entitled to tax deductions for both the initial Establishment Fee and ongoing fees.

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 Gum, is the preferred raw material for the production of high-quality paper. In fact, most paper mills require that some, if not all, of their timber input be hardwood fibre.

Key Features of the Project
The Project will consist of about 800 hectares, or more or less, subject to land of the required quality being available.

Establishment Fee per hectare:

  • $5,400 (including GST)

  • Minimum of 5 - $27,000 (including GST)


Ongoing fees per hectare:

  • Lease: $500 (including GST) per annum

  • Minimum of 5 - $2,500 (including GST) (Indexed) per annum


Tending:

  • $150 (including GST)

  • Minimum of 5 - $750 (including GST) (Indexed) per annum


Other fees:

  • Harvest, transport costs: to be deducted from Harvest proceeds

  • Harvest supervision fees: approximately 3.3% (including GST) of net Harvest proceeds

  • Incentive bonus: 15% of excess return above $18,000 (including GST) (Indexed) per hectare

  • Insurance: approximately 0.7% of insured value (including GST) (subject to change). The insurance fee may be affected by the insurance industry’s reaction to the bushfires of the 2019/2020 summer.

  • Credit (or similar) card merchants fee for Growers who make payments under the Project using a credit or similar card


Finance available

Project term: Approximately 10 years

Offer closes: 30 June 2021