Christmas Tree Farm Investments MODEL BASED IN EUROS ( ) Telephone: Web:

Transcription

1 Christmas Tree Farm Investments MODEL BASED IN EUROS ( ) Telephone: relations@gwdforestry.com Web:

2 TABLE OF CONTENTS 1. INTRODUCTION ABOUT GWD THE INVESTMENT TRACK RECORD REPORTING CURRENT DEMAND DEVELOPMENT POTENTIAL TREE PRICES HARVEST NOTIFICATION PAYMENT SCHEDULE AN INVESTMENT WITH REAL VALUE RETURNS HOW TO INVEST

3 1. INTRODUCTION Once regarded as a by-product of the forestry industry, Christmas trees have been developed over the years as a highly specialized and financially rewarding plantation forestry crop. Returns are produced within approximately 3 to 4 years from the sale of tabletop trees. Investors receive full returns annually starting at year 6 through to year 9, when the best quality trees reach saleable size, ranging in height between 5-9 feet. In 2008 GWD New Brunswick first started to develop its Christmas tree farm forestry project located within the Canadian province of New Brunswick. GWD has now harvested its first farms, 7 years on from the start of the project, with returns exceeding the initial expectations of the project back in The first wave of the project, opened to investors in 2008, has already provided substantial returns from the sale of farm grown Christmas trees to initial investors. Local demand for GWD farm grown Christmas trees currently exceeds available supply. GWD believes that the viability of the project has been proven through past performance and expects future demand of farm grown Christmas trees to remain strong for the foreseeable future. It is felt that the investment will provide an assured alternative to other traditional markets for investors looking to diversify. Due to exceptionally high sales orders for our Christmas trees, GWD is looking to further expand the project area in order to keep up with expected future demand. As a result, GWD Forestry is now offering a limited number of investors the opportunity to invest into the second phase of the project, through a simple and effective direct ownership investment structure. 2

4 2. ABOUT GWD GWD Forestry is a multinational forestry / agroforestry company focused on producing fast growing tree species able to show returns in less than 10 years. The primary focus for investment is in the establishment of plantation forestry which is more in line with agriculture than managed forestry as a whole. Originally incorporated in Copenhagen, Denmark in 2008, our business has since developed over the years and is now established in over 21 countries. GWD itself is asset backed, owning substantial forestry assets without liens or mortgages in both North and South America and has quickly grown to become a major forestry operator in the regions it has established itself in. Comprising a team of forestry and agricultural professionals, legal professionals and tax specialists, GWD aims to provide a niche forestry service for investors like no other. Working in conjunction with a prominent university in Europe, GWD also has a dedicated research and development division based in Porto, Portugal with the aim of bringing greater understanding to investors regarding its existing and future projects. This strategic alliance also gives GWD access to some of the most modern facilities in Europe for analyzing its projects, allowing it to improve the way it operates in the field; developing new techniques in order to optimize timber yields where possible. 3

5 3. THE INVESTMENT GWD Forestry is offering clients the opportunity to invest directly into a structure which establishes, develops and ultimately results in the sale of Christmas tree forestry crops through a number of limited investments in Plantation Units¹. The investment is simple in its structure, with the investor retaining the full rights to the forestry asset until harvest; directly owning crops grown on individually identified Plantation Units. The investor may choose to invest into 3 different sized Plantation Units: 1 acre lots for an investment of 9,750 2 acre lots for an investment of 19,250 4 acre lots for an investment of 38,000 (Clients who prefer not to work in Euros may opt in for a US Dollar equivalent) Clients may also choose to invest into multiple lots dependent on availability. Based on plantation practice, 1 acre of land will be planted with approximately 1,742 Christmas trees. These trees will mature over the years reaching saleable size. Once these trees are ready for market, they will be harvested; driving returns for the investor from the sale of the harvested tree crops. Dividend payments will also be made to the investor at years 3 and 4 after establishment. These dividend payments are generated from the sale of tabletop Christmas trees. These smaller trees, ideal for decorating table displays, are harvested from the weaker trees grown on site at years 3 and 4, in line with best management practice leaving the highest quality trees for full commercial harvest starting at year 6 of the investment. In 2014 tabletop tree prices were 8.00 per tree at wholesale. The investor will then receive further returns from the remaining fully mature trees at years 6, 7, 8, and 9. It is reasonably expected that between 900 and 1,000 trees per acre will be harvested from year 6 onwards. Depending on height, wholesale tree prices in 2014 ranged from for 5-6ft trees upwards to for trees of 9ft-10ft in height. Returns can be paid to the investor by GWD New Brunswick Project Ltd. via bank transfer, or by Cheque in Euros. [¹] The definition of a Plantation Unit is simply a subdivided area of land, planted and/or to be planted with a mix of Christmas tree crops; Fraser and Balsam fir varieties. 4

6 4. TRACK RECORD In 2008, GWD New Brunswick purchased and developed 3 farm sites located within the province of New Brunswick, Canada. The company has since purchased additional sites and is positioning itself to acquire in excess of 30% of the future supply of Christmas trees from the province of New Brunswick, Canada. Over the years, the company has invested substantial capital into the development of these farm sites; transforming them into dedicated Christmas tree farms. In 2014, GWD started its first commercial harvest of trees produced from GWD farm sites resulting in approximately 15,000 trees being harvested and sold to retailers located within both Canada and the United States of America. With GWD harvesting its first crops in 2014, investors involved in Phase 1 of the project have now received their first returns. These returns have so far exceeded the initial financial projections. 5. REPORTING GWD Forestry supplies all investors with a comprehensive report issued on, or before, the 1st June each year. Annual reporting will include details of year on year sales revenue generated by GWD New Brunswick from Christmas trees sold, alongside industry information and independent evaluations. Reports will include detailed information regarding the values received for the tree crops. Investors will have 24 hour access to the GWD Canada mini-site located at Investors also have unique access to their own dedicated area on the GWD Forestry website located at and will be assigned their own dedicated account manager. 5

7 6. CURRENT DEMAND Canada cuts up to 6 million trees annually; approximately 50% of these trees are exported to the United States and other countries. In 2014, GWD New Brunswick harvested and sold over 15,000 Christmas trees. It is expected that GWD will harvest and sell in excess of 17,000 Christmas trees from our farms in DEVELOPMENT POTENTIAL Demand from wholesalers in 2014 far outweighed the available supply of Christmas trees grown on GWD farms. The demand was so great that GWD was forced to decline sales orders for in excess of 40,000 trees. The average orders GWD were unable to fulfill were for trees ranging in sizes from between 3ft to 8ft and the projected wholesale value for these trees is estimated to be approximately 2.4 million over the next 3 years. In addition to this existing demand from retailers, it is believed that through online marketing, GWD will be able to attract further sales, increasing the potential of returns on investment for investors. 6

8 8. TREE PRICES Actual prices paid for Christmas tree crops harvested from GWD farms were recorded. These prices are expected to be achieved, or exceeded, in the future; rising in line with increased demand and inflation. TREE PRICES PAID IN 2014 ARE 3-4ft = 8.00 per tabletop tree 5-6ft = per tree 6-7ft = per tree 7-8ft = per tree 8-9ft = per tree 9-10ft = per tree 7

9 9. HARVEST NOTIFICATION Prior to harvest, the investor will be notified as to the exact number of individually flagged trees that are ready to be included in that year s harvest. This will occur in the fourth quarter annually, just prior to that year s seasonal harvest. Flagging will involve GWD New Brunswick individually tagging trees with color coded labels that identify the trees that are ready for harvest by height and grade. GWD New Brunswick Project Ltd. will then contractually agree the price that will be paid to the investor for the individually flagged trees, priced accordingly by height and grade. Upon investor approval, GWD New Brunswick will make payment directly to the investor as per the Payment Schedule. 10. PAYMENT SCHEDULE After notification, investors can choose to receive their returns either by cheque in Euros or by wire transfer. Payments will be made directly from GWD New Brunswick Project Ltd. by the 1st June each year following harvest at approximately Year 3 - Dividend payment through the sale of tabletop Christmas trees Year 4 - Dividend payment through the sale of tabletop Christmas trees Year 6 - First commercial harvest of available saleable trees Years 7 & 8 - Second & third majority harvest of saleable trees Year 9 - Final harvest of any remaining saleable Christmas trees 8

10 11. AN INVESTMENT WITH REAL VALUE Due to the investment structure, investors will retain all rights to the physical asset. This means that the investor will have control of that asset at all times, until delivery of all contractual obligations held under agreement between the investor and GWD New Brunswick Project Ltd. have been fulfilled. 12. RETURNS Whilst returns from the project are estimated to be between 9% - 16% per annum, these rates are considered to be conservative. Previous projected rates have so far been exceeded. For illustration purposes, GWD assumes the following, based on 1 acre of land established with 1,742 trees based on average prices where 2 values are shown: [¹] At Years 3 & tabletop trees will be extracted and sold at 8.00 per tree. 50% will be extracted at Year 3 and then 50% extracted at Year 4. [²] At Year trees between 5-6ft will be extracted and sold at [³] At Year trees between 6-7ft will be extracted and sold at [⁴] At Year trees between 7-9ft will be extracted and sold at [⁵] At Year trees between 8-10ft will be extracted and sold at The table below shows a return projection based on actual prices received for Christmas trees in 2014: INITIAL INVESTMENT UNIT SIZE YEAR 3 [¹] YEAR 4 [¹] YEAR 5 YEAR 6 [²] YEAR 7 [³] YEAR 8 [⁴] YEAR 9 [⁵] TOTAL (Annualized) ROI 9,750 1 Acre 3,368 3,368 N/A 2,350 7, , , , % 19,250 2 Acres 6,736 6,736 N/A 4,700 15, , , , % 38,000 4 Acres 13,472 13,472 N/A 9,400 30,225 39,819 19, , % A Performance Fee of 10% will apply to all revenue received by the investor. 9

11 13. HOW TO INVEST Speak to your account manager and decide the investment level suitable for you. If you don t already have an account with us then please us at admin@gwdforestry.com and we will contact you as soon as possible. Once you have decided on the investment that suits you, we require a administration fee to secure the investment, paid either by credit or debit card. Upon receipt of the administration fee, we will send to you by post a two part agreement that will need to be signed. One copy is returned to us with payment and the other copy is retained for your records. We will then send you the Ownership Certificate along with your starter pack. Once you have received your starter pack, should you have any queries or comments, please contact your dedicated account manager who will be happy to assist you further. GWD Forestry S.L. Calle Catalunya 5, 1A-B Palma de Mallorca Balearic Islands admin@gwdforestry.com 10