NEW ZEALAND S LEADING FOREST & FARM INVESTMENT SPECIALISTS

Transcription

1 The Green Investment that keeps Growing! NEW ZEALAND S LEADING FOREST & FARM INVESTMENT SPECIALISTS

2 established for 40 years over 2500 investors globally 30,000+ ha of land under management 90 forests & 6 farms

3 ROGER DICKIE COMPANY PROFILE 1 Executive Summary CHOOSING A PROFITABLE, ETHICAL AND SOCIALLY RESPONSIBLE INVESTMENT BACKED BY LAND OWNERSHIP Roger Dickie New Zealand Limited specialises in finding and securing the best forestry and farming investment opportunities. We have over 30,000 hectares under management for 2,500 New Zealand and international customers. Our role is to act as independent agent for our clients, we find them the best forest and farm properties that are available. We engage independent expert consultants to produce feasibilities, cash flows, and valuations. We provide management and administration services, and ensure that the investment is transparent, fully accountable and measurable by providing detailed monthly operating financial information to the owners. Forests and farms are real, tangible assets, secured by the ownership of freehold land. With the global demand for food and timber increasing particularly in developing Asian economies such as China and diminishing world supply, the outlook for both forestry and agricultural investment remains strong and is a secure and sustainable way to grow your wealth, plus, you re investing in a sustainable resource - as well as a beautiful clean green New Zealand. Overseas investors are attracted to New Zealand because of our stable government, our close exposure to the fast developing Asian markets and our established professional business practice. With its professional environment, New Zealand offers great reasons to consider creating financial wealth here. Ranking amongst the best countries to do business, New Zealand provides fresh opportunities. Ranked 1st in the world for protecting investors World Bank. Ranked 1st equal as least corrupt country Corruption Perceptions Index Ranked 2nd in the world for ease of doing business 2009 World Bank Ranked 4th Freest economy in the world 2011 US Heritage Foundation.

4 2 About Roger Dickie NZ COMPANY PROFILE Roger Dickie New Zealand Limited is at the forefront of New Zealand forestry and farm investment. Formed in 1971, the company has established over 90 forests and 6 farms for investors worldwide, with in excess of 30,000ha of assets under management. Forestry: Since 1990 Roger Dickie New Zealand has primarily concentrated their Radiata forest activities in the Hawke s Bay and Gisborne regions on the east coast of the North Island of New Zealand. The regions produces New Zealand s highest Radiata forest growth rates. Quality land is available at reasonable prices. The region have well developed timber based infrastructure including pulp mill, saw mills and close proximity to two log export ports at Napier and Gisborne. This is the foundation of a profitable forestry investment. Farming: Blessed with ideal climate and wide open spaces New Zealand is the ideal country for pastoral farming that grows healthy livestock for the production of dairy products and meat. New Zealand farmers are among the most efficient in the world and there are no Government subsidies for agriculture. With a population of just 4.3 million New Zealand produces enough animal food products for over 50 million people per year. Roger Dickie New Zealand has focused it farming investments in Southland, New Zealand. This is an area recognised for its reliable climate, good soils and ability to grow grass. Each farm is set up and managed in such a way to maximise grass based animal production in an environmentally friendly and sustainable manner.

5 ROGER DICKIE COMPANY PROFILE 3 MANAGEMENT APPROACH COMPANY DIRECTOR - ROGER DICKIE Close attention to financial controls, whilst maintaining the highest standards of forest and farm management is the cornerstone of our business. As the investor s representative, Roger Dickie New Zealand supervises and approves the collation of consultant s reports, valuations, managers reports, employment of contractors, cash flow forecasts, negotiations with local authorities, general newsletters, field days and conferences. Annual General Meetings are held on site each year when budgets are approved by investors. The combined group of forests and farms co-ordinated by Roger Dickie New Zealand represents a powerful force with the ability to partake in their own vertical supply chain integration. B. Ag. Sc. Forester, Farmer, Developer, and Company Director. Waverley, Taranaki. Roger Dickie is Chairman and director of 76 rural investment partnerships and companies. Roger is married to Mary-Ann and they have four adult sons. Through his family interests he owns farming and forestry land in the North and South Island and is involved in coastal property development in Taranaki. His main farming interests are in Awatea Farms, a 1,150 ha property at Waverley in South Taranaki. The main business of Awatea Farms is Rosemount Dairy Limited, milking 2,000 cows and the grazing of other dairy stock. Since 1971 Roger Dickie has coordinated and developed 90 rural investment syndicates for New Zealand and overseas investors. These cover an area of more than 30,000 ha and are located in the North and South Island. There are more than 2,500 investors in these syndicates many of whom are repeat investors. GENERAL MANAGER - WILLIAM DICKIE B. B.Com, Canterbury University. Manager, Director. Waverley, Taranaki. William is the general manager of Roger Dickie NZ Ltd and a director of other family run companies. He joined the business full time in 2009 in a Marketing and Sales role where he assisted in promotion of new offers and website management. Since then he has grown with all facets of the business and is now responsible for the day to day operation of the company. He has organised the conversion of two new dairy farms and is closely involved with our farming and forestry investment syndicates. He is a director of Forest Management New Zealand our forest harvesting and marketing company and is involved in developing opportunities that arise as the first rotation of the Roger Dickie NZ forests begin harvest.

6 4 Forestry Investment Prospects WHY INVEST IN FORESTRY? An investment opportunity occurs when rising demand for a commodity is matched by a falling supply. Timber demand is increasing steadily along with population and GDP growth. Most of the timber presently being harvested is from natural forests. The available supply is diminishing because of exploitation, economic and environmental pressures. 10 World Population Growth vs Wood Demand Plantation forests are an alternative, sustainable source of high quality timber. Plantations currently supply only 4% of the world s timber needs. The bulk of wood comes from old growth forests which take 60 to 300 years to mature. These forests are being felled at a rate equivalent to the size of a football field every second. We are rapidly approaching a situation where global timber demand will exceed the available supply. From the current level of 7 billion, the world s population will exceed 8 billion by an extra 1 billion humans to clothe, feed and house. The present global timber harvest of 3.5 billion m3 per annum is expected to soar to 5.95 billion m3 per annum by an increase of 2.45 billion m3 in less than 25 years. The next facet of a good opportunity is in locating an ideal source of the commodity. While trees will grow in many places New Zealand s combination of fertile soils and unique climate enable us to grow Radiata pine faster and better than anywhere in the world. Radiata pine, a Californian native, thrives in New Zealand conditions. Since the first plantings in the 1850 s Radiata has established itself as a major export earner. It is the mainstay Wood demand (in billions m 2 ) Growth rate: 77 million m3 per year Population (in billions) Growth rate: 100 million per year Source: UNFAO Forecast, Widman Research April 2014

7 ROGER DICKIE COMPANY PROFILE 5 of an industry predicted to make a significant contribution to the New Zealand economy by the year In 2010 New Zealand earned $4.2 billion from forest product exports making it the countries third largest export earner. New Zealand is well positioned to substitute radiata for dwindling supplies of hardwood and North American softwood. In the medium and long term, diminishing supplies from natural forests and an increase in demand for products made from wood is likely to result in higher prices. This situation provides excellent prospects for plantation grown timber. NEW ZEALAND S ADVANTAGE Market prospects for New Zealand radiata are very positive. Radiata can be efficiently grown in plantations. New Zealand grown radiata pine matures in just years. After a century of research New Zealand has become the world leader in plantation forestry. New Zealand forest management, tending practices, processing technology and genetic improvements are second to none. New Zealand forestry offers excellent opportunities for local and international investors to protect their capital whilst gaining significant returns. Plantation forestry in NZ is well established. While development and research is constant, the accomplishments to date in relation to the main commercial species, radiata pine, are: Superior tree growth; Highly developed tree breeding; and Efficient plantation management. Easy to use Radiata pine is a very resourceful softwood. With low expenses making it cost effective and very adaptable. New Zealand supplies supportive nonintervention government policies, skilled labour, excellent growth rates, and a well developed industry infrastructure. International Softwood* Growth Rates *softwood refers to wood derived from trees classified botanically as Gymnospermae Mean annual increment (M 3 / ha / year) Russia Eastern Scandinavia Spain Pacific US South Australia Chile New Zealand Hawke s Bay Canada Northwest Source: Ministry of Forestry, Fletcher Challenge Forests

8 6 Purchasing Land for Forestry AN OVERVIEW Roger Dickie (NZ) Limited s role is to act for the forest investor / owner. Roger Dickie (NZ) Ltd uses independent consultants and contractors. It is this independence that gives our forest owners confidence and ensures accountability. Our local knowledge and the economy of scale of 90 forests in the group delivers best practice at best price. Following are a few points of interest regarding forestry in New Zealand: Location - Because most of New Zealand s wood is exported it is very important to invest in forestry that is well located relative to export ports and mills. For that reason we always advocate trying to balance location with land price when buying forestry land. Land Quality and Price - Land purchased for forestry in New Zealand is always existing farm land running sheep and cattle on grassland on hill country. The better the quality of the land then the more expensive it is. Quality well located land is the foundation of a quality forest. We always look at the land price for a newly planted forest as the cost per plantable hectare, as that is the important cost to the forester. We arrive at that price by taking the purchase price of the farm less any assets sold eg houses, buildings, flat high cost land etc. We add on to that price the cost of any land preparation eg tracking, scrub (brush) clearance and then we divide that price by the area of the farm that we have determined though mapping can be planted in trees. For a typical hill country block the plantable area is often 80% to 85% of the purchased area, the greatest factor in that 15% to 20% unplantable is usually areas of indigenous forest and bush, tracks and boundary setoffs.

9 ROGER DICKIE COMPANY PROFILE 7 EMISSIONS TRADING SCHEME (ETS) New Zealand has its own Emissions Trading Scheme (ETS). It is logical that a new forest investor would prefer to invest in land or forest that could operate within the ETS parameters and trade carbon credits should the owner wish to do so. For a newly planted forest to qualify for the ETS it must have been in pasture in 1990, that is easy to check and prove. Investors visit their Waikare Forest aged 20 years.

10 8 Our Forests Roger Dickie New Zealand is at the forefront of New Zealand forestry. Since 1990 Roger Dickie New Zealand has deliberately concentrated their Radiata activities in northern Hawkes Bay and Gisborne regions on the east coast of New Zealand s North Island. The region produces New Zealand s highest Radiata forest growth rates. Quality land is available at reasonable prices. This is the foundation for profitable forestry investment. Once our forest harvest began in 2013 and by 2019 our sustainable harvest will be over 1 million tonnes of logs per annum. Hawkes Bay has an established timber based infrastructure including pulp mill, saw mills and a tri-board mill. The advantages of this area are further enhanced by close proximity to two log export ports at Napier and Gisborne. EACH RDNZ FORESTRY INVESTMENT RECEIVES: ACCURATE REPORTING Regular Partnership reports, financial details and budgets with AGM meetings held on site. SHARING OF KNOWLEDGE RDNZ hosts a regular Investor Conference. Our last Conference attracted 300 plus investors with a wide range of Forestry industry and investment speakers. NEW ZEALAND Location of RDNZ forests Auckland Gisborne Napier Wanganui ONLINE 24/7 RDNZ maintains an extensive and regularly updated website ( Including GPS maps of individual Forests and reports online. These reports are confidential and can only be accessed by username and passwords. Wairarapa Wellington Christchurch Otago

11 ROGER DICKIE COMPANY PROFILE 9 87 Three Ridges 88 Eland 89 Mangawehi 90 Mount Marsh (Wairarapa)

12 10 New Zealand Dairy Farming A NEW ZEALAND SUCCESS STORY Dairy farming is part of a long and proud agricultural tradition in New Zealand. For more than 150 years New Zealand has been exporting dairy products to the world. New Zealand s temperate climate and a highly innovative and efficient dairy industry based on farmer owned co-operative dairy companies has enabled dairying to grow into New Zealand s most important industry. In the last 40 years there has been significant diversification in both dairy products and markets. KEY FACTS ABOUT THE DAIRY SECTOR Dairying is New Zealand s largest industry - and one of the fastest growing. As such, it is a significant employer and contributor to much of the wealth that underpins New Zealand s standard of living. New Zealand produces approximately 3% of the world milk production, but accounts for 34% of cross border trade in dairy products and is the world s largest international trader of dairy products. Primary export markets for New Zealand dairy products are China, the rest of Asia, the US and the EU. There are around 12,000 dairy herds in New Zealand. Production has been steadily increasing due to more milk solids produced per cow and increasing herd size. The average herd size is now 402 cows.

13 ROGER DICKIE COMPANY PROFILE 11 THE WORLD DAIRY MARKET - TRENDS AND PROJECTIONS Worldwide there are more than 120 million dairy farms with the average dairy herd size being just 3 cows per farm. Future world demand trends for milk are driven by: Increasing world population. Increasing per capita standard of living. Increasing consumption of milk products per capita. International Farm Comparison Network (IFCN) from Germany is a global network of researchers from 95 countries. IFCN has projected in the period up to 2023 that milk consumption will rise 29%, per capita consumption will increase 13%, world population will increase 14%. Based on milk equivalent (ME), average per capita global milk consumption amounts to about 100 kg of milk/year, with very significant differences between countries/regions. Per capita consumption in western Europe is in excess of 300 kg ME per year but is less than 30 kg in some African and Asian countries. Around 60% of the world s population lives in south and eastern Asia. Increasing income levels will stimulate the demand for milk and dairy products, meaning that future milk production will need to increase by more than 1.8 % per annum. Should this not be the case, dairy prices will rise significantly above past levels. China consumed 22 kg ME per capita in 2004, if their consumption increases to the same as in Japan at 78 kg ME per capita then the additional production required will be 72 million tonnes, this is equivalent to the entire production of USA which is the world s largest milk producer. COST OF WORLD MILK PRODUCTION - ARE WE COMPETITIVE? Analysis shows that cost of production in US $ per 100 kg of milk varies from $4 in Cameroon to $128 in Japan. The average over all countries was US $46 per 100 kg of milk produced. New Zealand costs were assessed at US $35 per 100 kg milk, which is 20% below USA and German cost levels and 20% higher than Argentina. Costs of milk production in China are about 50% above the level of USA and Germany.

14 12 Purchasing Land for Dairy Farming A sound dairy investment needs to have clear objectives to ensure its success. We use independent consultants and contractors to ensure farm owners confidence and accountability. Roger Dickie has a strong personal background in farming, with a large scale dairy and dry stock farm in South Taranaki. Below are some of the key considerations when purchasing a dairy farm: Purchase of a top quality property in regard to soil type and contour. Investment in an area known for its reliable climate and evenly distributed rainfall. To source a farm in an area known for its high production with minimal input from off farm supplement. The employment of an independent dairy consultant with a proven track record of achieving high production levels on farms he supervises. Minimising exposure to the off farm costs (where prices are rising) such as feed and grazing Employ progress staff who are passionate about the industry and their succession through it as they move to farm ownership or management. PROGRESSIVE SOUTHLAND DAIRY FARMING Dairying is expanding in Southland. The region has 11% of New Zealand s dairy cows and the average production of 384 kg/ms per cow. This is exceeded by one other region out of the 19 NZ dairy areas. The average production per cow for all of NZ is 346 kg/ms. OPERATING STRUCTURE Around 65% of New Zealand herds are owneroperator (the farm owner runs the farm with other salaried staff) and 35% are operated with sharemilkers which happens on our farms. Interestingly, for all of New Zealand the average production for all farms is 346 kg/ms per cow but is 383 kg/ms per cow for those farms that are run with Variable Order Sharemilking Agreement.

15 ROGER DICKIE COMPANY PROFILE 13 HERD IMPROVEMENT The New Zealand dairy industry is technologically well advanced, most new farms can collect daily information on individual cow milk production, cow weight, and somatic cell counts. Herd testing enables farmers to collect information about individual cows in their herds. Information gained from this is vital to allow effective herd management. Animal performance is benched marked within the herd, within the region and nationally. Herd testing identifies low-producing cows(for culling or drying off), high producing cows (for breeding or for decisions in regard to feed intake level). Dairying is our leading export earner and one of the star performers of the New Zealand economy.

16 14 Investment Options PARTNERSHIP INVESTMENTS Of the 90 forest established by Roger Dickie 68 are partnerships. A partnership is typically made up with between 25 and 35 investors and offers economy of scale to a group of individual investors. Partners own an undivided share of the freehold land. The average investment is a 4% share with a minimum being a 1% share. In 2008 New Zealand introduced Limited Partnerships (LP). The advantages of a limited partnership structure means you get the benefit of limited liability and also receive the tax benefits of forest establishment and management. Land purchase is generally funded over 3 years after which the forest is debt free and the partners own an unencumbered freehold forest. Your investment is backed by the security of land ownership. All forests are insured for fire, wind throw and public liability giving investors peace of mind. PRIVATE INVESTMENTS Of our 90 forests 16 are owned outright by individuals or families. The typical private forest varies in size from 250ha to 5000ha. Roger Dickie New Zealand offers a complete service and can package a forest investment to suite your individual requirements. Accountability is the cornerstone of our business. As the investors representative Roger Dickie supervises all facets of the project from land selection and purchase, including: Obtaining New Zealand Overseas Investment Office approval for offshore investors. Collation and approval of forest consultant s reports and valuations. Forest management and reports. Cashflow projections and budgets. Organising contractors for land preparation and planting. Negotiations with local body authorities and consent applications. Quality control of all facets of forest development and ongoing management. Full administration service. SECONDARY MARKET With over 2500 investors in 90 forest and 6 farms, we occasionally have investors looking to sell their shares before harvest. Part of the Roger Dickie management process is ensuring that for whatever reason you decide to sell your shares, we can take care of the process and make it as easy as possible. If you are looking to increase your forestry shareholdings or buy into an existing forest, register your interest by ing richardb@rogerdickie.co.nz

17 ROGER DICKIE COMPANY PROFILE 15 CORPORATE INVESTMENTS Many overseas timber companies, corporations and pension funds have recognised New Zealand s competitive advantage in plantation forestry and have invested in New Zealand Radiata Pine Forests. PRIVATE EQUITY INVESTMENTS Private Limited Partnerships are for a small group of individuals who wish to invest in forest ownership and typically would be made up of 4 to 8 partners. The minimum investment in a private limited partnership is $250,000. Equity Investments use the same structure as a limited partnership giving investors limited liability and tax benefits. These partnerships are restricted to experienced or qualified investors as defined by the NZ Securities Act 1978 As the General Partner Roger Dickie supervises all facets of the project from land selection and purchase as well as and including: Obtaining New Zealand Overseas Investment Office approval for offshore investors. Collation and approval of forest consultant s reports and valuations. Forest management and reports. Cashflow projections and budgets. Organising contractors for land preparation and planting. Negotiations with local body authorities and consent applications. Quality control of all facets of forest development and ongoing management. Full administration service. With the worlds forest resource diminishing and demand increasing international timber companies and investors are looking to New Zealand to establish fast growing Radiata forests to secure their timber supply into the future. Companies worldwide are also moving to reduce carbon emissions and the most cost effective way to acquire carbon is to grow it through forest ownership. By establishing a new forest a company can secure the cost of carbon going forward thus reducing exposure to an inflationary carbon price. It is an investment in a real asset land and trees, the carbon credits can be banked and used to offset emissions or simply sold when the price is right. Roger Dickie supervises all facets of the project from land selection and purchase as well as and including: Obtaining New Zealand Overseas Investment Office approval for offshore investors. Collation and approval of forest consultant s reports and valuations. Forest management and reports. Cashflow projections and budgets. Organising contractors for land preparation and planting. Negotiations with local body authorities and consent applications. Quality control of all facets of forest development and ongoing management.

18 16 Overseas Investors Location of one or more Roger Dickie New Zealand international investors As the investment involves land ownership, international (non New Zealand nationals) investors wishing to invest in a private forest or farm are required to obtain approval from the New Zealand Overseas Investment Office (OIO, a New Zealand Government agency). Roger Dickie New Zealand Ltd assists investors with this process. To date all applications have been approved. Up to 24.9% of a partnership can be owned by overseas investors without requiring Overseas Investment Office consent. NEW ZEALAND S GLOBAL ADVANTAGE International timber companies have recognised the competitive advantages of New Zealand and have invested heavily in the New Zealand forestry industry. Roger Dickie New Zealand Ltd enables individual investors to access the industry at any level and share in the wealth that forestry will bring to New Zealand. Many international investors have chosen to diversify their investments by adding Roger Dickie New Zealand Ltd forestry to their portfolio. In addition to owning their own forest, investors enjoy the benefits of the excellent hunting and fishing reserves contained within our forests. New Zealand maintains reciprocal tax relationships with many countries which simplifies the tax positions for investors. The expenses of establishing and managing your forest are tax deductible against other New Zealand income. If the investor has no other New Zealand income the tax benefits can be accumulated and retained for use against the income when the forest is harvested. New Zealand has a stable government with conservative economic policies; and a motivated and highly skilled workforce. Our international investors have found establishing their forestry investment and transferring funds to New Zealand to be straight forward and secure. New Zealand has been rated internationally as one of the top five countries in which to invest.

19 ROGER DICKIE COMPANY PROFILE 17 We currently have investors from the following countries: USA Sweden Finland Canada Denmark Scotland Holland Hungary Northern Ireland Germany Japan England Switzerland Italy Greece Turkey Australia Hong Kong United Arab Emirates Taiwan Qatar Lao China Thailand Malaysia Philippines Singapore Brunei Indonesia Bouganville South Africa Directory PROMOTER: Roger Dickie S.H. 3, P O Box 43, Waverley 4544 New Zealand Tel: rogerdickie.co.nz ADMINISTRATOR AND SECURITIES REGISTRAR: Roger Dickie Forestry Ltd S.H. 3, P O Box 43, Waverley 4544 Tel: FORESTRY CONSULTANTS: P F Olsen Group, P O Box 1127, Rotorua Tel: Fax: nz.pfolsen.com FOREST MANAGER Forest Management (NZ) Ltd P O Box 14, Waverley 4544 Tel: FARVEST MANAGER Forest Management (NZ) Ltd Unit 13/90 Austin St, Onekawa, Napier 4110 Tel STATUTORY SUPERVISOR Foundation Corporate Trust Level 9, Crombie Lockwood Centre 191 Queen Street, PO Box , Auckland 1143 Tel: fct.co.nz SOLICITORS: Horsley Christie, Lawyers PO Box 655, 14 Victoria Avenue, Wanganui 4540 Tel: horsleychristie.co.nz Kensington Swan 89 The Terrace, PO Box Wellington 6143 Tel ACCOUNTANTS: Moore Stephens Markhams PO Box 96, 87 Weraroa Road, Waverley 4544 Tel: wav@markhams.co.nz AUDITORS: Silks Audit Chartered Accountants PO Box 7144, 24 Bell Street, Wanganui 4540 silksaudit.co.nz BANKERS: Bank of New Zealand (BNZ) Ltd P O Box 390, Wanganui Tel: VALUERS: Morice and Associates, 116 Vautier Street, Napier Tel: morice.co.nz Papua New Guinea For further information on the range of forestry investments available from Roger Dickie New Zealand please contact our office: Tel: invest@rogerdickie.co.nz

20 NEW ZEALAND S LEADING FOREST & FARM INVESTMENT SPECIALISTS