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8. The South West of Western Australia is locatedcloser to the Japanese and other Asian exportmarkets thus having a significant freight advantage.This region can usually compete strongly withwoodchip exports from Chile, the southern States ofthe United States and South Africa. This shouldmean that Australia will maintain its market share inJapan. In the United States saw log production wasbecoming favoured over pulp log production butlimited new housing starts and efforts by the US tobolster their economy by exporting products thatwould have normally been absorbed by the localmarket could increase competition in the short term.9. Australia is even closer to the highly promisingIndonesian market where in recent years severalvery large pulp plants have been completed.Because of mismanagement, there is a shortage oflocal fibre and Australia (and especially the SouthWest of Western Australia) has the potential tobenefit.10. In March 2002, Australia made its first sale of woodchips to China. In that country there are two sets ofdynamics that provide opportunity:(a) strongly increasing demand, at about 80%per annum (the per capita use of paper isstill less than 10% of that in the UnitedStates);(b)a very quick and abrupt closing down ofnative forest logging for environmentalreasons, as major waterways werebecoming dangerously polluted.11. It is expected that India, the country with the world'ssecond largest population and the world's largestmiddle class, will increase its usage of paper. It isknown that India has made enquiries of Australianlog suppliers but in WA the current government isopposed to export of hardwood logs but has noobjections to export of plantation grown woodchips.India's paper usage per head is about 1% of that inthe United States. Other emerging markets areKorea and Taiwan. China has been a major supplierto Taiwan and this is likely to be curtailed.12. This Project has a Wood Purchase Agreement withWA Chip & Pulp Co Pty Ltd a wholly ownedsubsidiary of WAPRES which is a joint venturebetween Marubeni Corporation of Japan andNippon Paper Industries, two of Japan's largestpulp importers. Currently WAPRES is providingabout one third of its export woodchips fromEucalyptus globulus plantations it owns with twothirds coming from plantations managed byWAPRES on behalf of other entities such as WABlue Gum Limited so marketing of WA Blue Gumwoodchips should be assured.14. The particular characteristics and location ofproperties in this Project strongly influence thereturns from sale of woodchips on export markets.Transport is a major cost and with the long termoutlook for oil prices to rise the significance of theclose proximity of land secured for the 2013 Projectto process plants or Bunbury or Albany Portscannot be overstated when considering the pricesto be obtained by growers in the project.15. The Commonwealth Government declared underthe Carbon Farming initiative (CFI) that commercialplantations grown in Australia could not be used togain carbon credits whereas plantations grownoverseas are eligible. This appears anomalous anda case for a change in this ruling could besubstantiated.16. Growth in demand worldwide for high qualitywoodchips as derived from Eucalyptus globulusplantations has steadily increased and once theworld economy improves this is projected tocontinue. The demand from China for high qualitywoodchips had been increasing at a much higherrate than other countries and the tightening ofdemand over supply was one of the factors that ledto a 9.5% increase in the FOB price in 2008 forEucalyptus globulus woodchips. Due to increasingsupply of Eucalyptus globulus woodchips from 2012due to large plantation areas established in 2000 to2002 and the world economic downturn, woodchipprices fell by 7% in 2012. The current uncertainty inthe world economy makes short term predictions offuture prices difficult as so many factors areinvolved however the long term outlook is thatdemand and prices will increase. It is expected thatby the time the trees planted in the WA Blue GumLimited 2013 Project are ready for harvest thatprices will have recovered.The information contained in this report has been gainedas a result of my own enquires and I have not relied onany representations made to me by the Project Manager,WACAP Treefarms or any other person.Don Spriggins BSc (For), FIFA13. In-forest chipping methods are now being used aswell as transporting logs to fixed chip mills. Onlower yielding sites in-forest chipping techniquesare used to reduce the cost of chip production byreducing transport costs from forest to Port in thatchips, not logs, are transported.
Anthony Henry May B.Ec. LL.B.Leon GorrB.Juris LL.B. M.AdminMr May has been a solicitor in practice for over 30 years.For more than 25 years he has advised many clients whohave become involved in forestry operations in variouslocations throughout Australia. He has also advised someof the largest forestry public company groups in relation toaspects of their activities.Mr May has been an active grower of both softwood andhardwood timber on his own account and is a director of anumber of timber growing companies. He has been amember of Australian Forest Growers (formerly calledAustralian Forestry Development Institute) for about 25years and is a member of the Committee of the Melbournebranch. He was a member of the Board of the NationalAssociation of Forest Industries (now called AustralianForest Products Association) for five years. He hasrepresented the forestry sector in negotiating with theAustralian Government over taxation and regulatoryissues on a number of occasions, including most recentlyin relation to the design and implementation of the Division394 legislative package. He was for over 25 years amember of the Council of Monash University and for muchof that time was a trustee of the University SuperannuationScheme. He is a partner of Herbert Geer and has been adirector of WABG since its inception.Mr Gorr has been a solicitor specialising in Corporate andRevenue Law for over 30 years. For more than 25 yearshe has advised forest plantation managers, promoters andparticipants concerning their various forestry operationactivities. During this period, he has been activepersonally as a grower in the softwood and hardwoodplantation industries.Mr Gorr has been a director of WABG since its inceptionand during that time that company has been the ProjectManager under annual Prospectuses / Product DisclosureStatements in relation to projects of a similar nature to thisProject.Steven John Smith LL.M.Mr Smith has practised in areas of commercial law since1981. His clients are involved in a wide range ofcommercial and entrepreneurial activities and he has beeninvolved in preparing prospectuses for a number of them.He has been a director of WABG since 23 April 2001.
Page 1 and 2: W.A. BLUE GUM LIMITEDACN 060 179 98
Page 3 and 4: SectionPage1. DIRECTORY ...........
Page 6: Responsible Entity and Project Mana
Page 9 and 10: Date of PDS: This PDS is dated 14 J
Page 11 and 12: (c)(d)(e)Agricultural risks such as
Page 13 and 14: (b)(c)(d)(e)(f)(g)(iv)Commissions:e
Page 15 and 16: In addition to disclosing the exper
Page 18 and 19: This PDS relates to the offer of In
Page 20 and 21: 2.5 Experienced Forestry Consultant
Page 22 and 23: 3.5 International MarketsIn 2008 a
Page 24 and 25: This Section details the fees and o
Page 26 and 27: ADDITIONAL EXPLANATION OF FEES AND
Page 28 and 29: GrowersConstitutionProject Manageme
Page 30 and 31: Harvest income is held by the Custo
Page 32 and 33: November 16th 2012The DirectorsWA B
Page 34 and 35: Leasing arrangements with landholde
Page 38 and 39: This section contains a summary of
Page 40 and 41: (s)(t)resolution of Growers at a du
Page 42 and 43: (d)(e)(f)(iii)(iv)for the second an
Page 44 and 45: (e)(f)(iii)administering and superv
Page 46 and 47: (d)in the case of an expert, for se
Page 48 and 49: ITAA 1997Joint Growers AgreementJoi
Page 50 and 51: W.A. Blue Gum Project 2013W.A. Blue
Page 52 and 53: Sole/First Applicant or First Joint
Page 54 and 55: I/We the person(s) or company named
Page 56 and 57: *I/We hereby apply to ALBANY FINANC
Page 58: Sole/First Applicant or First Joint
Page 61 and 62: Name of GrantorExecuted as a Deed P
Page 63 and 64: We do not provide financial plannin

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