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TIM 4.4¢

harvest of first eucalypt project

  1. looney

    1,035 posts.
    Augers well for the plantation companies.
    Have heard that GTP are well pleased with their lot too.
    I hold TIM.

    TIMBERCORP LIMITED 2003-04-10 ASX-SIGNAL-G

    HOMEX - Melbourne

    +++++++++++++++++++++++++
    Australia's leading agribusiness investment manager, Timbercorp
    Limited (ASX:TIM), has negotiated a more profitable outcome for
    grower-investors in its inaugural 1992 eucalypt project in Western
    Australia.

    Timbercorp expects that overall returns to growers in the 1992
    project will be more than $7,200 per woodlot, representing an
    equivalent pre-tax return on investment of up to 9% per annum (for
    growers on the top marginal tax rate).

    The pleasing result has been achieved by negotiating a higher price
    that will result in an equivalent net stumpage to growers of more
    than $36 per cubic metre of wood. The price has been achieved by
    processing it directly on behalf of growers and delivering woodchip
    rather than logs to the customer.

    Chief Executive Officer, Robert Hance, said that the purchase
    agreement reached represents a 57% higher price than if the wood had
    not been processed and instead sold as standing timber or logs.
    Growers will receive progressive monthly payments through to
    completion of harvesting, processing and delivery by 31 December
    2003.

    "We are delighted that the efficiency gains achieved by processing
    the wood in-field and shifting the point of sale closer to the end
    customer has resulted in reduced processing and handling costs and a
    higher net price for growers," Mr Hance said.

    "By using our newly developed whole tree harvesting and in-field
    chipping system, we are able to harvest and process wood for less
    than under a conventional harvest and static chipmill program, while
    also increasing the total wood fibre recovered per woodlot."

    Although slightly below the yield Timbercorp had forecast in its
    prospectus 11 years ago, the 1992 project will result in a
    significant profit to 1992 growers.

    Mr Hance said that the returns for this project were impacted by
    lower yields than expected going forward, with pre-harvest volume
    estimates averaging around 200 cubic metres per woodlot.

    "Eleven years ago site selection, nutritional analysis and forest
    management processes were relatively poor by today's standards - with
    seed genetics non-existent. As early as 1993, however, forest
    establishment techniques improved markedly with deep-ripping and weed
    control."

    "Considering the early methodology used in the industry, to deliver
    an attractive return on investment in the first harvest of our
    earliest project is a very healthy result," he said.

    Mr Hance added that the recent woodchip price increase recently
    announced by Gunns Limited also applies to Timbercorp growers.

    Timbercorp continues its focus on improving seed genetics, site
    assessment techniques, pest control, nutrition, and overall forest
    management to ensure its plantations have the maximum available
    growth opportunities.

    "In the past 11 years, we have not increased forecast yields, but we
    have improved our techniques.

    "Our data shows an improved yield outlook for our 1993 and subsequent
    projects as a result of continued research and development, and as
    such I believe growers can look forward to further improved profits."

    Harvesting of the 1992 project's 527 hectares in south west Western
    Australia will commence later this month, with the woodchip to be
    shipped under contract to the Marubeni Group in Japan via
    Timbercorp's newly constructed receivables facility at the Bunbury
    Port.

    For more information, please contact:

    Timbercorp:
    Robert Hance, Chief Executive Officer, 03 8615 1200

    Sol Rabinowicz, Executive Director Corporate & Financial Services, 03
    8685 1200 or 0417 887 552

    Tim Browning, General Manager Forestry, 08 9481 0581


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