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TFS Sandalwood Project 2009

TFS Sandalwood Project 2009
Cash Rebate 8.25%
Closing Date CLOSED
Minimum Investment $11,750 (ex GST)
Application Cost per Unit
(ex GST)
1 - 5 lots $11,750
6 lots or more $11,250
Term of Project 15 years
Research AAG  4 stars
  Adviser Edge
Adviser Edge Supp
4 stars
  Lonsec Recommended
ATO Product Ruling 2009/5

Pioneering the Industry Revolution 

The Most Valuable Tropical Hardwood in the world
Over A$100,000 per tonne (A$100 per kilo)
Aromatic Oil in its Heartwood, used as a fixative base in the world’s most luxurious fine fragrances
Extracted oil sells for US$2,000 per kilo (i.e. $2 million per tonne)
All parts of the tree are used, including remnant Heartwood and all Sapwood
Wild Santalum Album (Indian Sandalwood) is on the World Conservation Union’s Threatened Species Redlist
Wild resources occur in countries with unstable governments, unsustainable harvesting and black markets, which are expected to be fully extinguished in 4-8 years
Government research since 1985
WATER! Lake Argyle capacity is approximately 30 times the volume of Sydney Harbour• Be a grower for just $12,925 (including GST) per woodlot (Woodlot = 1/6th hectare, 85 trees)
Be a grower for just $12,925 (including GST) per woodlot (Woodlot = 1/6th hectare, 85 trees)
Annual Lease and Management fees of $1,200 per year over 12 years
Ability to defer Lease and Management fees each year – forfeit up to 20% of gross proceeds
Pay a total of around $30,000 per woodlot, expect to receive $200,000 before manager’s bonus of 30%, highest real $$$ return in market!
Research by all 3 research houses: Coming Soon - Adviser Edge & AAG, Lonsec
100% finance available
12 months interest free on 20% deposit
ATO Product Ruling (PR2009/5) confirms 100% tax deductibility

What you need to know

Why you should consider this as a suitable investment option in 2009?

Indian Sandalwood is the most valuable tropical hardwood in the world.  The oil which is extracted from the tree is the base ingredient for top shelf perfumes from Channel, Christian Dior and Calvin Klein.  Furthermore, Sandalwood is used from cradle to grave in both the Buddhist and Hindu religions with 500 million incense sticks burnt each day.
The TFS Indian Sandalwood Project 2009 offers the potential to achieve the highest return of any agribusiness project in the market place with less considered risk compared to other agribusiness investment options.
Agribusiness, MIS (Managed Investment Schemes) or forestry investments offer a 100% tax deduction and can assist in tax planning to facility a broad range of wealth creation strategies.

What is the track record?
Indian Sandalwood has grown in value by 21%, each year for the past 17 years.  A combination of deforestation and poaching has resulted in this sacred tree fast disappearing from its natural environments and is now expected to be extinct within 5 years.
In 1997, TFS recognized the opportunity to develop an Indian Sandalwood plantation in Kununurra, far north Western Australia.  Today TFS are a 100% vertically integrated grower, manager, processor and distributor of sandalwood products world-wide.  TFS are not only the pioneer of this industry; they are also the largest “commercial” plantation manager / owner of Indian Sandalwood in the world.
With the first Indian Sandalwood trees planted in 1999 (under MIS) and requiring 15 years to maturity, TFS will have its first harvest in 5 years time.
Independent research confirms the investment that TFS has made in infrastructure, forestry staff, research and development which is likely to result in TFS meeting or surpassing growth projections.
Recent independent testing conducted on oil samples (prior to maturity) confirms that the quality of the oil produced meets strict requirements of international perfumes houses.

How sound is this investment?

Agribusiness investments have a number of risks that need to be considered.  Each product has unique risks which are specific to the species and growing regions.  Consider water – without water, trees will not grow!  The TFS Indian Sandalwood Project is the only forestry investment in an irrigated plantation.  The TFS plantations are in Kununurra which is on the edge of the Ord River Irrigation Area, Australia’s largest and cheapest in-land water supply.
Independent research is available from Agribusiness Specialist research companies like Lonsec, Adviser Edge and Australian Agribusiness Group which confirm that TFS Indian Sandalwood is a stand-out offering in the market place and with the highest research ratings.
Independent research on TFC, Tropical Forestry Corporation (listed as TFC on the ASX) is available from many leading stockbrokers including Ord Minnett and JB Were who confirm that TFC is in a strong financial position, debt free and are uniquely placed to benefit from changes in the market for sandalwood.

What are the issues associated with the environment and tax rulings?

The tax deduction is assured as the product comes with a Product Ruling from the Australian Tax Office each year.
TFS Indian Sandalwood is considered an “ethical investment” option as TFS have invested heavily to receive ISO Quality Standard across all aspects of their operation.  Furthermore, in 2006, TFS won the WA Water Recycling Awards for water conservation and management.  In 2008, TFS received a Prime rating from Oekom Research, a specialist ethical investment research house from Europe pre-qualifying TFS as a preferred company for ethical investors.
According to Gurdeep Chawla, President of the Sandalwood and Essential Oils Association and also President of the Indian Sandalwood Association – “Ironically as it may seem, Australia may be the savior of the Indian Sandalwood species in the world trade, fulfilling demand in international markets”.

 What is the current market?

The current official supply of Indian Sandalwood is 500 tonnes per year from the annual auction held in Tamil Nadu, India in November of each year.  The current consumption of Indian Sandalwood is 3000 tonnes per year based on amount of product released each year into the market.
In addition to perfumes which only account for 10% of the market, sandalwood is used in many other products including medicine, fine art, handicrafts, attars and incense sticks.
46% of all perfumes released since 1750 contain sandalwood oil.
200 new perfumes or fragrances come out each year containing sandalwood.
A cure for skin cancer?  Sandalwood oil has been found to contain cancer fighting qualities and a cream is in the final stages of development in the US at John Hopkins Institute.  This is the first Western use of sandalwood in medicine – it has been used for medicinal purposes throughout India and Asia since 2000BC.

 What is the demand?

Demand greatly exceeds supply as clearly illustrated in the increase in price for Indian Sandalwood.  The price of wood has increased from $5,100 per tonne in 1990 to $138,732 in 2008 – compound increase of 21%.  The price of oil is $2M per tonne.
TFS have already pre-sold 40% of its first 5 years of oil supply to Lush and Albert Vielle with more contracts to be announced shortly.

What are the indicative returns?

TFS Indian Sandalwood offers the potential to achieve the highest return of any agribusiness project in the market place.  Subject to the investor’s financial position, personal tax rate and other key factors – investors can expect to triple their investment not accounting for the tax benefit.

Is there finance available and if so, how does it work?

TFS offers full finance through the Commonwealth Bank of Australia.  While this is a “full doc loan”, the investment in the plantation is the asset for security purposes.  Investors need to show that they can make their monthly commitments for the selected term to secure 100% finance.

A broad range of other finance solutions can also be considered subject to your personal financial situation.

The Company

TFS, a publicly-listed Western Australian company (ASX Code: TFC), has become a global pioneer, managing the largest plantation of Indian Sandalwood (Santalum album) in the world.

Dwindling wild supplies and demand centred on thriving Asian nations produce exciting market dynamics for this ancient ingredient. Indian Sandalwood features in incense, perfumes, carvings, medicines and worship around the globe.

With this established demand and an ideal environment in Western Australia’s Kimberley region, TFS recognised the investment potential that plantation-grown Indian Sandalwood offers.

Using Santalum album seeds originally sourced from India, TFS has established over 1,700 hectares of vast plantation forests in the Kimberley region, making this the largest Indian Sandalwood plantation in the world.

TFS is now a vertically integrated Sandalwood company through the acquisition of Mount Romance, the leading global distiller of WA Sandalwood oil. This provides TFS with a stronghold in the global Sandalwood industry, increasing the company’s intellectual property and market penetration internationally.

The Location

Indian Sandalwood has been grown in Western Australia’s Ord River Irrigation Area (ORIA) since the 1980’s, when trial plots were established by the Western Australian Government’s Forestry Department.

Foresters identified the region’s high levels of sunshine, suitable soil/clay properties and average daytime temperatures of between 30 to 40 degrees Celsius as optimal conditions for the growth of Indian Sandalwood.

The region’s main water source, Lake Argyle, is a 1,000km2 man-made dam (11 times the surface area of the city of Paris) that holds over 30 times the volume of water in Sydney Harbour. Water from this dam flows down through Lake Kununurra to irrigate the Indian Sandalwood plantations, and is easily replenished by the Kimberley’s annual 800mm of monsoonal rain.

It is this combination of an arid-tropical climate and the abundance of water that has proven WA’s Kimberley region an ideal location for the cultivation of Indian Sandalwood.

TFS was established following the success of the early trials into Indian Sandalwood cultivation.

Why Invest?

Indian Sandalwood is the most valuable species of Sandalwood (Santalum) in the world, achieving prices of over $100,000 per tonne of heartwood (Tamil Nadu Forestry Department Auction – November 2008).

This tropical hardwood has been used for thousands of years in perfumes, religious worship, carvings and incense. Asia, Europe, the Middle East and North America all use Indian Sandalwood for its fragrant heartwood found at the core of the tree. An essential oil can be extracted from this heartwood and features in some of the world’s most popular fragrances including Chanel, Christian Dior and Calvin Klein.

The gap between supply and demand has been growing rapidly which has seen the price of Indian Sandalwood increase by over 21% compound for the past 17 years. TFS invite you to take advantage of their opportunity.

TFS Business - Sandalwood

TFS is a specialist Sandalwood company, with over 10 years of experience in the cultivation of Indian Sandalwood in the Kimberley.

TFS has over 35 full time staff based in Kununurra including a selection of tertiary qualified foresters, agronomists and agricultural scientists who live and work on TFS estates. Under the guidance of internationally respected foresters, TFS has developed unique intellectual property into the establishment and management of this parasitic tree.

To maximise the quality and growth of the trees it produces TFS has invested heavily in infrastructure and research. A custom-built nursery and seed orchard help to produce premium seedlings for planting. All land is carefully selected by TFS' team of experts based on the suitability of its soil type for growing Indian Sandalwood trees and its access to an abundance of water. TFS has an ongoing research designed to enhance techniques and deliver better returns to investors.

The Project

TFS Sandalwood Project 2009 (TFS 2009) (ARSN – 135 373 938) is the company’s thirteenth Indian Sandalwood project under management.

TFS 2009 has a minimum investment of one sixth of a hectare for the entry price of $11,750 plus GST, with volume discounts available.

The Australian Taxation Office (ATO) has issued (PR 2009/5) which confirms that all fees paid in relation to TFS 2009 are fully tax deductible in the financial year they are paid.


TFS has received 4 star ratings or equivalent recommended ratings from 3 independent researchers.

Fees per One Sandalwood Lot


1 to 5 lots $12,925 (incl GST)
6 or more lots $12,375 (incl GST)

Annual Fees

Annual Fee $1,100 (incl GST)
Rent $220 (incl GST)

Investment Options

Pay Annual Fees and Rent annually.
Defer your Annual Fees and Rent and forgo 1% - 20% of your harvest proceeds.
Share the harvest proceeds with your superannuation fund or spouse to maximise your returns. A minimum of 2 lots is required for this Joint Venture option.

Payment Options

Establishment fees may be paid in full or over a period of 12 months by an interest free loan. A deposit of 20% of the Establishment Fee will be required upon application.

TFS are also offering a finance package by its preferred financier, MIS Funding No.1 Pty Ltd.

TFS finance package offers:
100% finance
An interest rate of 8.45% as at March 2009 – limited offer only
Up to 10 year term – 3 years interest only followed by principal & interest
Loans can include the nominated application fee TFS provides marketing and back office support

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

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