Property Of The Week


Only 6 apartments in Mordialloc, one of Melbourne’s most established bayside suburbs.
  Please note: To access all documentation you need to be registered prior to downloading files. Simply REGISTER HERE to receive your username & password.

Not a member yet? - Register NOW

ITC Hardwood Project 2008

ITC Hardwood Project 2008
Cash Rebate 8.25%
Closing Date CLOSED
Minimum Investment $4,500 (ex GST)
Term of Project 11 years - Pulpwood Option
21 years - High Value Timber Option
Research AAG 4 stars
Adviser Edge 4 stars
Lonsec - HVT Recommended
Lonsec - Pulpwood Recommended
ATO Product Ruling 2008/28 (High Value Timber Option)
2008/29 (Pulpwood Option)

ITC Limited is a forestry company with a proud history of sawmilling and value-adding timber for over 80 years, and delivery of forest establishment and management services to retail, corporate and institutional investors since the early 1990s.

Today, ITC is one of Australia's largest hardwood plantation forestry managers and timber processors, with more than 150,000 hectares of plantations under management across Australia and a solidwood conversion capacity of 250,000 cubic metres per annum.

ITC is active across the forestry and forest product value chain ranging from plantation establishment and management to harvesting, sawmilling, timber and woodchip sales and export.

Activities are managed through two operating divisions: ITC Forestry and ITC Timber. ITC Forestry delivers plantation establishment and management services nationally while ITC Timber processes and value-adds high-grade, quality timbers in Victoria and Tasmania for architectural applications, furniture, flooring and construction material.

The Project

ITC Project Management Ltd is pleased to present the ITC Hardwood Project 2008. The Hardwood 2008 Project contains 2 options;
1. High Value Timber - 20 year term
2. Pulpwood - 10 year term

For as little as $4,950 (incl GST) you can invest in the growing of a number of different species of trees across various regions of Australia.

Benefits of investing in Hardwood Project 2008
Single upfront payment with no annual lease or management fees.
Tax-effective - 100% tax deductibility supported by ATO Product Ruling.
Harvest income in years 7, 9, 10, 14, 15, 18 & 20.
Diversification across species and climates.
Diversification across asset classes.
Insurance against fire is available with premium payable annually.
Attractive finance packages including 11 months interest free facility.
Deferred fee structure aligning investors interests with ITC's.

Summary of the Project
Offer closes 30 June 2008 unless withdrawn earlier.
Overview of investment options The PDS offers you the opportunity to invest in a forestry managed investment scheme. There are two planting options available:

High Value Timber option – Investment in plantations of native australian hardwoods managed primarily for the production of high value sawlogs from harvesting between 15-20 years after planting. It is expected that commercial wood products will be produced from thinning the plantations approximately 6-8 years after planting.

Pulpwood option – Investment in plantations of native australian hardwoods managed for the production of pulpwood from a once-only harvest approximately 10 years after planting. It is not expected that the pulpwood plantations will be thinned.

You may choose to invest in either or both of these options.
Unit of investment You will be investing in a plantation unit (unit), or units. a plantation unit is a separately identifiable area of land within a plantation.

In respect of the High Value Timber option the area of each unit will be 0.75 hectares and will comprise a woodlot of each of four different species.

The area of a pulpwood unit may vary depending on the productivity of the property on which your units are located. Each pulpwood unit is to be an area assessed as capable of producing approximately 225 cubic metres of pulpwood approximately 10 years after planting. Pulpwood units will have an approximate area in the range 0.8–1.2 hectares.
Application fee You can invest in either planting option by paying the establishment services fee of $4,950 (inclusive of $450 GST) per plantation unit.
Other fees and costs There are no ongoing annual fees during the term of the project apart from insurance. a Land fee and a Management services fee are payable from your share of harvest proceeds. Insurance is payable annually by all investors.
Terms Payment Subject to the approval of ITCPM and payment of the Terms payment deposit you can elect to pay the establishment services fee by Terms payment in 11 instalments.
Taxation The ATO has issued product rulings PR 2008/28 and PR 2008/29 in relation to the project. The product rulings confirm tax deductibility for establishment services fees and certain other costs which may be incurred by you as referred to in the product rulings.
Minimum investment The minimum investment in the project is one unit in either planting option. Further investment can be made in increments of one unit.
Minimum subscription There is no minimum level of subscription that must be raised under either planting option for the project to proceed. The responsible entity is able to operate the project regardless of the number of units issued.
Tree species The High Value Timber option will comprise plantings of Tasmanian blue gum, spotted gum, red Mahogany and gympie Messmate. having different species in the investment enables us to match suitable species to different sites and diversifies the risk of relying on a single species in a single forestry region.

It is intended that the pulpwood option will comprise a single species (Tasmanian blue gum). Tasmanian blue gum is the most widespread species planted for pulpwood in Australia. Other suitable pulpwood species may be planted if ITC consider they are better suited to the sites available.
Location of the plantations The location of your plantations will vary depending on which Planting Option you choose, and where your Units are allocated.

The plantations that form the High Value Timber Option will predominantly be located in the Albany region of Western Australia (Tasmanian Blue Gum and Spotted Gum) or in coastal north Queensland (Red Mahogany and Gympie Messmate).

It is intended that the plantations in the Pulpwood Option will predominantly be located in the Albany or Esperance regions in Western Australia, or the Green Triangle Region of SW Victoria and SE South Australia. Minor plantings may occur in coastal sub-tropical Queensland.

The ITC Group manages plantations in all the regions in which plantings may occur under this Project. These regions have the characteristics of rainfall and soil that make them suitable for plantation development.
Structure of the investment The documents that establish the Project are the Constitution, Land Agreement and Management Agreement (together referred to as the ‘Project Agreements’):

• The Constitution establishes the Project and defines ITCPM’s obligations as the responsible entity under the Corporations Act;

• The Land Agreement will grant you rights to the land on which your Plantation Units will be located; and

• The Management Agreement establishes ITCPM as your service provider to establish, manage, harvest and market the wood products grown on the land and any interests arising from carbon sequestrated by the plantations on your behalf.

These are standard documents for establishing a forestry managed investment scheme. It is important to understand your rights and obligations under the Project Agreements.
Forestry management Your forestry investment will be managed by ITCPM. They will be responsible for all aspects of the Project throughout its term.

ITCPM has engaged ITC Limited to manage the operational forestry and technical aspects of the Project. ITCPM and ITC Limited are part of the ITC Group, which is a wholly owned subsidiary of Futuris Corporation Limited.

The ITC Group offered its first investment project in 1992 and now manages over 50 managed investment schemes on behalf of over 16,500 investors. ITC is an integrated forestry company with one of the largest hardwood plantation estates under management in Australia as well as being one of the country’s largest hardwood sawmillers. Their parent company, Futuris Corporation Limited, is a leading Australian diversified company with a market capitalisation of $2 billion as at 30 June 2007.
Project land ITCPM will take and register head leases over the land in its name. This provides you with security of tenure for your Plantation Units.
Time of planting Your investment will be planted within 12 months of you being accepted into the Project. The optimal time for planting will vary across the different planting regions due to differences in climate. Planting will be scheduled when seasonal conditions are suited to high survival, which usually means times of the year with higher rainfall.
Minimum stocking ITCPM will, at its expense, replant areas of dead or missing trees in the planting season following initial establishment so that sufficient trees are established for a viable plantation.
Pruning Pruning will be conducted on selected trees in the High Value Timber Option. Pruning will promote development of high value pruned sawlogs. You will not have to pay for pruning at the time the operation is conducted. The Management Services fee includes pruning.
Project returns As both Planting Options are long-term forestry enterprises, there is a range of factors that may impact on the performance of your investment such as seasonal conditions between planting and harvesting, the price received for the wood products and product volumes. The impact of these factors may vary and therefore it is not possible to predict with certainty the financial returns of the Project. However, there is information in later sections of the PDS , including information relating to the timber industry and potential volumes, to assist you in making your own assessment of the benefits of participating in the Project.

In addition to returns from the sale of wood products, you may also receive financial return from the trading of interests arising from carbon sequestered by your plantation.

You should seek professional advice when considering potential returns.
Risks The Planting Options offered under the Project are long-term forestry ventures that are subject to agricultural risks, commercial risks and general risks. ITC have attempted to identify the potential risks, and their impact in the PDS . There may be other risks they have not identified.
Insurance Each year, ITC will arrange insurance for your plantations, provided that insurance can be arranged on Reasonable Terms. Insurance is expected to cover damage by fire, lightning, hail and windstorm. The level of cover to be effected may vary from year to year depending on the state of the insurance market at the time. Insurance is payable annually by all investors.

Prior to the start of Clearfall harvest, you will be required to pay insurance premiums on an annual basis, generally around October in each year. After the start of Clearfall harvest, premiums will be paid by ITCPM and recouped from Harvest Proceeds.
Pooling of wood products for marketing ITC will arrange the harvesting and marketing of the wood products. The wood products from all plantations under each Planting Option will be marketed collectively. The proceeds of sale under each Planting Option will be paid by ITCPM into a Proceeds Fund. Costs of Harvest and Marketing and Land and Management Services fees will be payable from the Proceeds Fund.
Marketing of sawlogs In relation to the High Value Timber Option, ITCPM has been granted a Put Option by which they will be entitled to sell sawlogs at harvest. The Put Option was granted by ITC Timber, an ITC Group company which processes and value-adds high-grade, quality timbers for architectural applications, furniture, flooring and construction materials. The Put Option specifies how the prevailing market price at the time of harvest will be determined and provides that the purchase price for the logs must be a fair and reasonable price, as determined by an independent expert, taking into account a range of factors including the proposed end use of the logs.
Marketing of pulpwood ITC play a leading role in price negotiations for Australian plantation-grown hardwood woodchips to Japan. They have enjoyed significant success in recent years. The benchmark price for woodchips for sale to Japan is set on an annual basis, and the 2008 negotiations resulted in a 9.5% price increase, for the direct benefit of investors.
Marketing of carbon ITC will arrange for the marketing of interests arising from carbon sequestered by the plantations on behalf of Growers in each Planting Option. A Management Services fee will be payable from proceeds. The present opportunity to realise a monetary value for carbon sequestered in plantations is limited. This situation may change in the future.
Secondary markets Your participation in the Project should be considered as an illiquid investment as there is currently no active secondary market. As a consequence of changes to taxation laws in 2007 in relation to buying and selling of project interests, a secondary market may develop during the course of the Project.
Information and reporting Each year you will receive a report from ITCPM and the Independent Forester summarising the progress of the plantations in the Planting Options relevant to you.
Simply download an Investment Brochure/PDS above. It’s that easy!
return to previous page