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Great Southern 2008 Future Forestry Investment Project

Great Southern Future Forestry Investment 2008 Project
Cash Rebate 8.25%
Closing Date CLOSED
Minimum Investment $2,850 (ex GST)
Term of Project 13 years - Tree Project
15 years - Land Trust
Research AAG 4 stars
Adviser Edge 3 stars
ATO Product Ruling 2008/39

The outlook for plantation forestry is strong as global demand for paper continues to grow and protecting old growth forests becomes increasingly important.

So too is the outlook for prime agricultural land on which plantations are grown, which has been subject to an extraordinary upward movement in price in recent years.

Investors can now capitalise on the success of both sectors, through the Great Southern 2008 Future Forestry Investment.

What is the 2008 Future Forestry Investment?
This exciting new investment builds on the group’s flagship plantations Project. It provides the opportunity to participate in the Australian plantation forestry industry in two ways:
You can invest in commercial hardwood timber plantations, through the Great Southern 2008 Renewable Fibre Project (the “Tree Project”);
and the agricultural land on which the plantations are to be grown, through the Great Southern 2008 Forestry Land Trust (the “Land Trust”).

Produce from the Tree Project is expected to be converted into woodchips and used in the paper industry, however also potentially in emerging markets such as bioenergy and stranded lumbar which are being closely monitored by Great Southern.

Investors in the Land Trust are expected to benefit from any capital growth in the value of the land, rent paid by the Tree Project and a direct share of any proceeds from any environmental entitlements such as carbon credits.
Why invest in the woodchip industry?

The demand for woodchip is ultimately dependent upon the demand for paper, which is driven by population growth, per capita incomes and literacy levels. Accordingly the vast majority of paper is consumed by developed countries. World paper consumption is forecast to reach over 494 million tonnes by 2020.

In most regions, the supply and demand for wood products is in balance. However, there is a significant wood fibre trade deficit in Asia, where further shortages are expected as international environmental standards restrict the logging of native forests, and increasing population and income levels place additional pressure on supply. Australia’s proximity to the Asia Pacific region provides it with a major freight advantage over other wood producing countries.

Australia’s export hardwood woodchip industry generated over $950 million revenue in 2006-07. The volume of logs harvested from hardwood plantations has risen significantly over the past five years. In 2005-06, plantations comprised 13% of the total hardwood harvested; a 29% increase on the previous year.

The shared government and industry initiative, “Plantations for Australia: the 2020 Vision”, seeks to treble the area of plantations in Australia from one million hectares in 1997, to three million hectares by 2020. If the target is achieved, it is estimated the $1.9 billion trade deficit in wood and wood products in 2005-06 would be converted to a surplus, and 40,000 jobs could be created in rural areas.

Emerging markets
While the trees grown in the Tree Project are currently expected to be mainly converted into hardwood woodchips, exciting new markets such as bio-energy and stranded lumber are being explored.

Bio-energy is one of the renewable technologies becoming widely accepted as an alternative energy supply. There are a number of ways in which forest produce biomass can be used in order to generate electricity. Currently the two most advanced opportunities are direct energy production and wood pellets.

Stranded lumber is a strong and versatile building material, whereby strands of shaved timber are pressed together under high pressure with a non-toxic binding resin. Demand for wooden structural components is growing due to the housing and construction boom in Australia.

Environmental and social benefits
Plantation forestry contributes positively to Australia’s environment, economy and regional areas. Great Southern’s aim is to provide investments that offer long term returns while protecting the regions in which we operate, leaving a long lasting positive legacy.

Some of the positive contributions Great Southern’s forestry plantations help to make:
Draw carbon out of the atmosphere by creating “carbon sinks”
Prevent and reverse salinity and erosion
Absorb high levels of phosphates, thereby improving the quality of waterways
Provide an alternative to logging native forests
Provide regional communities with employment opportunities, financial support and improved infrastructure

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 over 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.

The company’s net assets as at 30 September 2007 exceeded $765 million, including approximately 3.5 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.

Why invest in the Land Trust?
Access to Australia’s prime agricultural land
Expected returns from growth in the value the land, rent from the Tree Project and a share of any proceeds from any environmental entitlements such as carbon credits which may be derived from the trees
Benefit from the unwinding of the encumbered land value; i.e. the difference in the encumbered value purchase price and unencumbered value sale price
Risk management benefits of portfolio diversification
Confidence in Great Southern’s proven land acquisition team
Flexible finance options, including 12 months interest free

Why invest in the Tree Project?
100% tax deductibility, as expected to be confirmed by Australian Taxation Office Product Ruling*
Expected returns approximately 8-12 years after planting
Strong export market for woodchips and existing contracts for previous projects
Growth industry, which may benefit further from emerging markets
Risk management benefits of portfolio diversification
No ongoing costs, except an annual insurance fee
Plantation and investment manager with proven experience
Secondary market for forestry managed investment schemes
A sustainable investment with numerous environmental and social benefits
Flexible finance options, including 12 months interest free

Investment structure - Tree Project
Application Fee $2,850 (+ GST) per woodlot
Tax deductibility 100% in year of investment
Size of woodlot 0.25 hectares (or 0.33 hectares on the Tiwi Islands)
Applications close 30 June 2008
Rent or land fee 7.5% of net sale proceeds (+ GST)
Other fees An ongoing management fee of 2.5% of net sale proceeds (+GST) and a performance fee
Expected returns Approximately 8-12 years after planting
Finance options 12 months interest free and 2, 5, 7 and 10 years principal and interest finance (with rates starting from 8.25%)

Investment structure - Land Trust
Unit application price $500 per Unit (GST not applicable)
Tax deductibility The application price is a capital expense and is not tax deductible
Maximum number of units offered Equivalent to number of woodlots issued
Applications close 30 June 2008
Other fees An annual management fee of 0.75% of the net asset value of the Land Trust (+ GST); a land sourcing management fee equal to the interest earned on the application price; an environmental credits management fee equal to 50% of the net proceeds of sale of any environmental credits (plus GST); and a sales performance fee of 20% (plus GST) of the net proceeds of sale of Land or of the Unit value that exceeds $3,350 per Unit.
Expected returns 15 years from 30 June 2008
Finance options 12 months interest free and 2, 5, 7 and 10 years principal and interest finance (with optional interest only periods)

The Great Southern 2008 Future Forestry Investment offers the key features of the group’s flagship plantations project and much more.

This carefully structured investment provides access to Australia’s expanding plantation forestry industry and prime rural real estate, and the chance to benefit from capital gains, expected returns from multiple sources, taxation advantages and potentially also exciting emerging end uses for the underlying commodity.

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 either the Great Southern 2008 Renewable Fibre Project ARSN 124 053 27 (the “Tree Project”) or the Great Southern 2008 Forestry Land Trust ARSN 128 112 443 (the “Land Trust”) 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 the issuer of the Tree Project and Great Southern Funds Management Limited AFSL 226 701 the issuer of the Land Trust together have issued a Product Disclosure Statement (“PDS”) for the Tree Project and Land Trust detailing the terms of the Tree Project and Land Trust. 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 relevant Project, of the soundness or otherwise of the relevant Project as an investment, or of the reasonableness or commerciality of any fees charged in connection with the relevant 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.

Simply download an Investment Brochure/PDS above. It’s that easy!
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