growing your futurethe global bamboo industry is conservatively estimated to exceed usd 50 billion...
TRANSCRIPT
Growing Your Future
Bamboo Plantation Ownership
2
3
Pages
1. APC Group Overview 4
2. Introduction to Bamboo 7
3. Bamboo Global Trade 11
4. Bamboo Ownership 15
5. Programme Overview 26
6. Appendix - APC Group 32
5. Appendix - Asset Class 38
6. Appendix - Kenya 42
7. Appendix - Frequently Asked Questions 44
8. Disclaimer 49
Contents
4
APC Group Overview
SHARIAH COMPLIANCESELECTIVELY DESIGNATED BY THE ISLAMICBANKING & FINANCE INSTITUTE MALAYSIA
APC Global Footprint
5
APC Group Overview
The APC Group serves over 5,000 clients globally
Over USD 650 million in assets owned and under management
7.5 million trees and plant species owned and/or managed across more
than 126 plantations
Consolidated turnover ofUSD 70 million (2015 - Unaudited)
Average 157% ROI delivered to clients*
Operations in 17 different countries
Over 2,000 members of staff positioned in twelve offices across
four continents
SHARIAH COMPLIANCESELECTIVELY DESIGNATED BY THE ISLAMICBANKING & FINANCE INSTITUTE MALAYSIA * For clients that purchased Agarwood plantations
6
The APC Group
Established officially in 2008, although
operating privately since 2002, the group now
has plantations and agricultural projects on
four continents, with operational projects at
various stages from start-ups to fully operational
plantations and farms.
APC Group is the owner and operator of a
diverse range of commercial plantation and
farming businesses globally. The group has
provided sustainable forestry and agricultural
land acquisition and development services to the
global forestry and agricultural sector for more
than 10 years.
The group owns its own freehold and long-term
leasehold plantations. Its wholly owned land
portfolio is free from any bank debt, and has
been purchased with the company’s own funds.
APC Group Overview
7
Introduction to Bamboo
Introduction
Bamboo is the fastest-growing plant in the
world and has been around and used for
centuries. Records dating back more than
seven thousand years indicate products
made of bamboo, such as arrows, paper,
building materials, and books.
While bamboo grows everywhere in
the world except those places with
extremely cold climates, it is thought
to have originated in China, where the
first use of bamboo to make every day
items was recorded. Bamboo has been
an integral part of Chinese history and
culture being used in the production
paper and books, bedding, flooring,
medicine and cuisine.
Bamboo has also been of vital
importance to Africa, where it has
been and continues to be a material of
choice for traditional crafts throughout
the region. It is also important for
construction and is used in the
production of fencing, basketry and has
many other applications.
The rapidly diminishing supply of
natural bamboo through indiscriminate
clearing of natural forests, coupled with
increasing demand on the back of rising
populations and its myriad of uses, has
led to the following unique opportunity
of bamboo and farmland ownership.
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Fast Growth
Longevity
Carbon
Sequestration
Strength
Commercial
Applications
Bamboo is not a tree, it is a grass and grows like one. It is in fact the fastest growing
land plant in the world (only ocean kelp grows faster). A 20m bamboo culm can
replace itself within 50 days. Each time it is harvested it regrows naturally.
Bamboo is extremely durable with a life cycle of approximately 100 years.
Bamboo sequesters (absorbs) around 4 times more CO2 than average timber
and produces 35% more oxygen; as soon as a bamboo pole is harvested it starts
the process of regrowth and carbon sequestration.
Bamboo has greater tensile strength (or resistance to being pulled apart) than
steel, and it withstands compression better than concrete . As a result, it is a
major component in the construction industry for scaffolding, flooring, housing
and structural support across Asia and is now spreading globally.
Bamboo is a very versatile plant with numerous commercial applications. Over
1 billion people live in houses made of bamboo. In India alone over 2.2 million
tonnes of bamboo is used for paper. Other applications include fibre for clothing,
food, scaffolding, joinery, panels, flooring, furniture, utensils, activated carbon/
charcoal, textiles, medicines, and cosmetics. In Asia, Nivea on of the world’s
largest personal care brands has a range of products based on bamboo extract
as its main featured active ingredient. Additionally, bamboo biomass has great
potential to be an alternative renewable energy source. This market is rapidly
growing in size, as the world intensifies its initiatives to secure sustainable energy
supplies for the future.
Introduction to Bamboo
Key Facts
9
Introduction to Bamboo
Bamboo is one of the most remarkable
plant species on the planet, and contrary
to popular belief, is actually a ‘grass’.
Native to several tropical areas around
the world, different species of bamboo
have shown themselves capable of
flourishing in even the most intemperate
climates, with some putting down roots
in cold mountainous regions and others
in Sub-Saharan Africa.
Bamboo has played an important role in
the evolution of mankind, having evolved
as a species between 30 and 40 million
years ago. Vast grasslands provided
food in an age when herbivorous
mammals were evolving, which in turn
provided food for mankind’s carnivorous
forebears. Many anthropologists have
suggested that mankind, as a species,
would not be where it is today without
the role that bamboo has played in its
evolution.
Unlike timber, bamboo is a self-
regenerating plant. New shoots replace
the old, which is extremely advantageous
for growers as bamboo replenishes
itself by regenerating the bamboo
shaft known as the culm. This means
harvests do not require the plant to be
felled or completely removed. Further,
it facilitates regular production from the
same plant, increasing the frequency at
which yields can be generated – very
important for a grower’s cash flow.
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Introduction to Bamboo
Although a grass, bamboo is the fastest growing plant
in the world. Some species of bamboo are capable of
growing by almost a metre in a single day (that’s a rate
of almost four centimetres an hour), and the subfamily
of flowering evergreens has become an integral part of
Asia, Africa, Central and South America to which they are
native.
Bamboo can range in size from three metres to thirty
metres in height, with the taller species being of particular
importance to the construction industry. Bamboo has
a greater compressive strength than wood, brick or
concrete, and a tensile strength that matches, and in
some cases even exceeds that of steel. Bamboo houses
are gaining in popularity, while bamboo flooring is in high
demand due to its texture, durability, and natural beauty.
The total bamboo area in the world is approximately
36m hectares (ha) or an average of 3.2% of the total
global forested area. It is naturally distributed in the
tropical and subtropical zone between the latitudes 46°
North to 47° South. It grows at elevations from sea level
up to 3,000 meters anywhere there is a warm climate,
abundant moisture and productive soil. In the wild,
bamboo is mostly distributed, in the tropics, subtropical
and temperate zones of all continents except Europe
and North America. In recent years, bamboo has been
introduced into North America, Europe and Australia for
commercial and industrial reasons.
Figure 1 below indicates the regions where bamboo
growth occurs globally. Asian countries combined
represent 55% of global bamboo growth, followed by Latin
America with 33%. Some species also grow successfully
in mild temperate zones in Europe and North America but
both these regions are largely importers of bamboo.
(1000 ha)
0
< 50
50 - 500
500 - 1000
> 1000
No Data
Figure 1 – Area of Bamboo by Country (2010)
Source: Food and Agriculture Organization of the United Nations (FAO) (2010) Global Forest Resources Assessment 2010, Rome: FAO.
11
The global bamboo industry is conservatively estimated
to exceed USD 50 billion over the next couple of years.
The market in 2015 was estimated to be USD 42 billion.
Industry analysts and experts expect growth over the
next few years to be exponential, as new technologies
come on line, and the uses to which bamboo can be put
increase.
The number of environmentally aware and socially
conscious consumers and investors is growing at a
rapid rate, with more and more people trying to steer
clear of investments that have a negative impact on the
environment. The triple bottom line of ‘people, planet,
profit’ is one that needs to be embraced if we are to
address and possibly reverse the damage created by
burning fossil fuels and denuding forests. Bamboo is set
to meet the needs of a growing global population, in a
sustainable and environmentally conscious manner.
As previously mentioned, the global market for bamboo
and bamboo related products is estimated to be USD 42
billion in 2015. This figure was calculated by taking the size
of China and India’s domestic markets, (believed to be
worth at least USD 40 billion) and adding known import/
exports figures as reported by the International Network
for Bamboo and Rattan (INBAR), the official source of
bamboo related trade data.
Bamboo Finished Products
Bamboo finished products according to INBAR data
totalled USD 1.56 billion in 2012. Finished products
comprise of bamboo shoots, woven products, industrial
products and furniture seats. The bamboo export market
is dominated by China, while Europe, where bamboo is
not native, is the largest importer. Western consumption
accounts for approximately two thirds of total global
imports as seen in the charts below.
Bamboo Global Trade
Figure 2 – Key Exporters and Importers of Bamboo Finished Products
Total (Kg, 2012) Total (Kg, 2012)
Key Exporters Key Importers
683,394,877 519,552,522
China
Indonesia
Vietnam
Netherlands
Thailand
Others 47,546,315 (7%)
11,811,426 (23%)
15,003,361 (2%)
24,126,612 (4%)
54,640,000 (8%)
530,267,163 (78%) Europe
Japan
USA
Austrailia
Canada
Others 56,259,257(11%)
15,995,573(3%)
18,204,115 (4%)
88,465,420 (17%)
103,561,031 (20%)
237,067,126 (46%)
0 0 200,000,000 400,000,000 600,000,000 100,000,000 200,000,000 300,000,000
Source: INBAR (2015) INBAR Bamboo and Rattan Trade Database, Available at: http://trade.inbar.int/ (Accessed: 2015).
12
Bamboo Global Trade
31%Bamboo Woven Products
34%Bamboo Industrialised Products
17%Bamboo & Rattan
Furniture & Seats
18%Bamboo Shoots
Total (USD, 2012) $1,564,414,373.00
Figure 3 – Global Import/Export of Bamboo Finished Goods
Source: INBAR (2015) INBAR Bamboo and Rattan Trade Database, Available at: http://trade.inbar.int/ (Accessed: 2015).
13
Bamboo Raw Materials
Bamboo has an extraordinary array
of uses, from food, to energy, to
building materials, and now even to the
manufacturing of fabric – bamboo fibre
can produce material that is softer than
the finest cotton, or even cashmere.
Every single day, bamboo is used for
fibre or food, by more than two and a
half billion people around the world,
and it has been estimated that more
than 1,000 different types of product are
made from bamboo.
Unlike many other resources, bamboo
is clean, green, renewable and
sustainable, being self-propagating and
not requiring insecticides or pesticides
to grow. Technology has now risen to
meet the needs of the expanding global
bamboo industry, creating even greater
demand and increasing utility.
The total amount of raw bamboo
traded in 2012 according to INBAR,
was approximately 146 million Kg with
a value of USD 105 million. Figure 4 on
the following page, illustrates the key
exporters and importers of raw bamboo.
China was the largest exporter by a wide
margin, accounting for approximately 79%
of raw bamboo exports. Europe despite
having no native bamboo was listed as the
second largest exporter with 6% of global
exports, likely due to it being a trade hub for
re-exports of imports from Africa and Asia.
Some Asian countries such as Japan and
Thailand are importers of bamboo despite
having their own natural stocks. This is
often a reflection of the level of domestic
usage in the country and indicates that it
may often be cheaper for them to import
than grow.
“The total amount of raw bamboo
traded in 2015 according to INBAR,
was approximately 146 million Kg”
Bamboo Global Trade
14
Key Market Facts
• The global market for bamboo and bamboo related
products is estimated to be worth USD 42 billion in
2015. This is expected to rise in line with population
growth if not significantly more once bamboo’s
biomass applications become mainstream.
• Experts estimate that over 1 billion people live in
traditional bamboo houses, with the figure significantly
higher if one takes into account hybrid house
construction.
• The world market for chopsticks is believed to be worth
at least USD 400 million, with chopsticks made of
bamboo representing 75% of the market. According to
Chinese statistics in 2011, the country’s manufacturers
produce 60 to 80 billion sets of chopsticks each year.
40% of this production is used for the domestic market
with 60% exported. The major importers of Chinese
chopsticks are Japan and South Korea. Each year,
the Japanese use 23 to 25 billion pairs of disposable
chopsticks; approximately 200 pairs per person - the
majority of which come from China.
• Production of edible bamboo shoots is common in
Asia, especially China, Japan, Taiwan and Thailand. It
is widely found in Asian cuisine globally. At present,
over two million tonnes of edible bamboo shoots are
consumed in the world in each year.
• China is the major producer of bamboo-laminated
boards, with an estimated production capacity of
500,000 m³ per year. About 80% of bamboo laminated
board are turned into flooring with the remaining
20% used in the production of furniture and structural
products. More than 70% of China’s production is
catered toward the export market with the US and
Europe being the key importers.
• Bamboo as a textile has been used for years across Asia,
and is now spreading across the West rapidly. In the
UK, high street retailers like Top Shop and Mango have
begun selling bamboo based garments throughout
their stores.
Figure 4 – Key Exporters and Importers of Bamboo Raw Materials
Key Exporters
Total (Kg, 2012) 122,311,479
China
Europe
Pakistan
Thailand
Ethiopia
Others 7,667,416 (6%)
1,460,094 (1%)
3,681,891 (3%)
6,451,029 (5%)
6,756,030 (6%)
60,000,000 80,000,000 100,000,0000 20,000,000 40,000,000
Key Importers
Total (Kg, 2012) 145,514,911
Europe
HK
Thailand
USA
Japan
Others 10,189,340 (7%)
10,885,368 (7%)
16,605,651 (11%)
21,500,841 (15%)
27,422,767 (19%)
60,000,0000 20,000,000 40,000,000
58,910,944(40%)96,295,019(79%)
Source: INBAR (2015) INBAR Bamboo and Rattan Trade Database, Available at: http://trade.inbar.int/ (Accessed: 2015).
Bamboo Global Trade
15
Why Own Your Own Bamboo Plantatation?
Bamboo Ownership
APC’s selection of bamboo as one of its primary species was
based on two major criteria – profitability and exit option
opportunities.
Bamboo can be very profitable if managed professionally.
Bamboo is not only easy to cultivate meaning that
costs are lower than most other crops, but also highly
in demand. With an average annual yield of 20-25 wet
tonnes per acre and a number of beneficial attributes,
bamboo is ideal to replace cotton fibre in the textile
industry. This sector alone presents a tremendous
opportunity and one which owners can access early with
the existing opportunity.
The second and equally important criteria are the multitude
of exit option opportunities that are available for bamboo. If
for some reason bamboo use in the textile industry does not
grow or is not adopted to the scale expected, bamboo with
its plethora of other uses such as in, food, flooring, activated
carbon/charcoal, scaffolding, and dozens of others, will still
be in demand. Bamboo is in essence a diversified crop, which
in turn provides owners with significantly less risk than with
most other crops.
• Africa Plantation Capital Bamboo Plantation Ownership
is essentially a simple property transaction, involving the
development of land for the production of bamboo.
• The advantage of owning or leasing a plantation is that
it is a tangible asset with secured income generating
operations. Plantation ownership is particularly attractive
to those who wish to own productive assets that are not
affected by the typical volatility found in financial markets
and other traditional asset classes.
• Every bamboo plantation owner has the opportunity
to combine the benefits of huge global demand
with the expertise and infrastructure provided by
one of the world’s largest plantation management
companies. Plantation ownership with APC is hassle
free, with APC Management, if appointed, taking care
of everything relating to your plantation, from preparing
the bamboo for harvesting, to storing and selling your
plantation’s produce.
• Purchasing bamboo plantations is not only a socially
responsible decision, but has the advantage of delivering
annual returns as early as the fifth year of planting. The
fast growing characteristics of bamboo allow it to be
harvested for fibre from year 5. Owners can then benefit
from harvests annually until their management term
expires or is renewed.
• The yearly income from harvests provides owners the
comfort of an annual income from a truly sustainable
source, whilst supplying local and international markets.
16
How does Bamboo Plantation Ownership Work?
Bamboo Ownership
Over the 5 year growth cycle your bamboo is maintained daily by your
Managing Agent, to ensure optimal growth
After the 5th year, your Managing Agent will harvest your bamboo on an annual
basis and send it for processing into fibre
The APC plantation management team plants saplings on your land
The final product is sold and the proceeds are paid to owners
Each plantation owner receives a Title Deed from the Kenyan Ministry of Land, Housing and Urban Development or a
long-term lease agreement
Within 6 months your bamboo saplings are transported to your land
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Perimeter Fence Irrigation SystemFire Prevention Systems Water Borehole
Example of a Typical Bamboo Plantation
Bamboo Ownership
Visitor Center
Plantation Office & Administration
Fibre Processing Facility
Workers Housing
Nursery and Propagation Newly Planted Saplings
Water Reservoir
Irrigation SystemWater Borehole
Fire Prevention Systems
Water Borehole
Water Borehole
Water Borehole
Water Borehole
Perimeter Fencing
Perimeter Fencing
Perimeter Fencing
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• Minimum initial capital required
• Bamboo is a self-regenerating
natural resource
• Harvest every year from year 5
• Annual income from year 5
• Fully Managed*
• No annual fees
• Buffer Stock replacement
• Portfolio diversification
• Proceeds in USD
• Multiple potential exit options
• Farm land is low risk
• Tangible asset
• Limited supply and strong demand
• Freehold land with Title Deed or Long-
Term Leasehold Agreement
• Safe and secure
• Forestry outperforms traditional financial
asset classes (stocks, bonds and fixed
deposits)
• APCs existing global sales and
distribution network
* Fully managed by your appointed Managing Agent
Once APC has purchased the land and has received the
title deeds, the APC plantation management team gets
to work.
Once the infrastructure is complete, the bamboo saplings
you purchased are planted and you can rest assured
that they will grow optimally under the supervision of
our experienced APC plantation management team, if
appointed.
The land is cleared and infrastructure is added in the form
of fencing, nursery and propagation facilities. Boreholes
are dug in multiple locations in order to ensure a clean
and abundant water supply.
APC Plantation Acquisition and Preparation
Bamboo Ownership
19
• APC before finalising any land purchase makes sure
that the land is suitable for the type of crop we are
planning to grow.
• Our experts after six months of intensive research,
which include land surveys, site visits, soil and water
tests, the analysis of weather history and patterns,
have identified land located at the Bao Lala locality
of Kilifi County, a few kilometres after the popular
Arabuko Sokoke Forest in Kenya, as ideal for growing
our innovative bamboo.
• The area has a combined average rainfall of
approximately 1,000mm per year, an average
humidity of 65%+, average temperature of 24
degrees Celsius and a soil Ph of 6.3, amongst other
necessary data which is required to successfully
grow our bamboo.
• APC has acquired 1,000 acres of land in this area
and is planning to create fully operational bamboo
plantations in 3 phases. Creating the proper
infrastructure is vital for a successful plantation and
as such we are heavily investing in infrastructure.
The plantation will be fully fenced, with electricity
facilities, boreholes, water tanks, dams, drip irrigation
system storage facilities, security and 24/7 fire
prevention systems.
• APC has already started all work on site for Phase
1 of the project, which began early 2016. We have
received the necessary Phytosanitary Certificate and
are currently importing the required saplings.
• The plantation is divided in 1 acre plots, you may
purchase as many acres as you desire (subject to
availability) and each plot is fully operational. Each plot,
after the 5 year maturity cycle, should yield between
20-25 wet tonnes per acre annually and produce
approximately 15 tonnes of dry fibre per acre. Your
bamboo will keep growing and will be harvested
every year by your appointed Managing Agent. It is
capable of being harvested until the end of its life span
(up to approximately 100 years).
• This is a unique lifetime opportunity that could
secure your family’s future for decades by acquiring
a tangible income producing asset that grows in
value.
Bamboo Ownership
20
Title Deed
All bamboo plantation owners receive a title deed to the land from the Kenyan
Ministry of Land, Housing and Urban Development or a long-term lease
agreement (depending on your nationality). [All title deeds may have up to 4
names on them and they are fully transferable as part of your estate].
Management Agreement
You are required to enter into a bamboo management agreement with
skilled professionals for the maintenance and management of your bamboo
for the duration of your ownership. You can select and sign a management
agreement with Africa Plantation Capital Management or alternatively, may
contract a third party of your choosing.
Sales and Purchase Agreement
You will receive, via a Sales and Purchase Agreement, all the legal rights to
your bamboo for the duration of the term on your designated plantation.
Bamboo Ownership Certificate
You will receive a Bamboo Ownership Certificate, which outlines the following:
• Unique tagging code
• Number of bamboo saplings purchased
• Plantation Address
• GPS co-ordinates of the plantation
Key point
Owners must make the choice of instructing a qualified plantation manager
to manage and maintain their bamboo or use the on-site plantation manager
Africa Plantation Capital Management. The plantation manager must work to
best practice forest management (Please refer to terms and conditions for full
details).
Documentation
Bamboo Ownership
21
• The cycle begins with evaluating how many
acres you wish to purchase. The minimum
purchase is USD 24,000 per acre.
• You will receive all legal documentation
pertaining to your purchase as soon as the
purchase is complete.
• Your funds from the purchase will be used
to purchase title to the plantation land and
to procure bamboo saplings, which in turn
will be planted on your bamboo plantation
in Kenya.
• Your bamboo saplings are then grown
and maintained on the plantation by the
plantation management company of your
choice under a separate management
agreement.
• From year 5 the bamboo is mature enough to
be harvested annually and generate income
from fibre sales.
• Once your harvested final product has been
sold, the net proceeds shall be paid to you on
an annual basis, from year 5.
• Further bamboo will re-grow from the same
clump and roots, generating poles/culms
each year without replanting.
Purchase and Harvest Process
Bamboo Ownership
22
Tissue Culture
PlantingHarvesting Growing
Multiplication Nursery
Bamboo FibreChipping/Soaking Pulping/Drying
Once the bamboo is harvested, the harvested bamboo is
taken to mills where it is crushed and submersed in a strong
solution of sodium hydroxide which dissolves the bamboo
cellulose. With the addition of carbon disulfide it renders the
mix ready to regenerate fibres which are then drawn off,
washed and bleached to a bright white colour and dried. The
resultant fluff is very long in staple and visibly finer than other
fibres. It is then spun into yarn, like any other textile fibre. The
longer staple and higher tensile strength, is what makes a
tough, soft yarn – which is not as susceptible to wearing and
fraying as many other yarns. This is what gives bamboo fabrics
excellent durability. The hollowness of the fibre contributes to
its very high level of absorbency but it does take longer to dry
on a clothesline. The hollowness of the fibre also enables it to
hold dyes and pigments more readily and permanently, thus
making it much more colour-fast.
Bamboo Fibre Processing Cycle
Bamboo Ownership
23
Modern portfolio theory attempts to maximise portfolio returns
relative to risk by constructing a diversified portfolio of assets. This
is done by selecting unique uncorrelated asset classes.
APC adds another layer to this theory by providing a product
which in itself is diversified.
This mitigates risk further and is essential to having a truly well
balanced portfolio.
CASH
FOREX
STOCKS
LAND
COMMERCIAL
AGRICULTURAL
RESIDENTIAL
BONDS
PROPERTY
FIBRE FOR TEXTILES
TOWELS
FOOD
FRAGRANCE & ESSENTIAL OILS
FURNITURE
FLOORING
DISPOSAL BBQ’S/CHARCOAL
BUILDING MATERIALS
ACTIVATED CARBON
BEDDING
The Importance of a Balanced Portfolio
BAMBOO
Bamboo Ownership
24
Nursery Planting HarvestingGrowth
Fast Growth Figure of Bamboo (Moso, Phyllostachys Pubences) From Shoot to Young Bamboo
* BOO-TEX™ refers to bamboo based textile.
Bamboo Ownership
Young bambooshoot aboveground growth
Time
BambooCurve
Height (M)
WinterShoot
Young bamboo shoot underground growth
18 days 28 days 36 days 44 days 56 days
Bamboo
S
pun into Yarn
Woven into Fab
ric
Pro
ce
ssed into BO
O-T
EX
™* Fibres
25
Fully Integrate Value Chain Plan
Vertical integration maximises profit opportunities throughout the value
chain. While the current model focuses on the manufacture of bamboo
fibre, manufacturing units are planned which will enable APC to enter
into multiple verticals such as fibre, pulp, biomass and food production.
Manufacturing
n
n
Plantations Retail
Plantations Retail
APC’s exsisiting
distribution network
Other retailpartners
Bamboo Fibre and Pulp
Production
AfricaPlantationProduction
Facilities
Ownership andmanagement
Cultivation,husbandry and management
Bamboo Ownership
26
The 25 Year Economic Projection
Although the projections displayed in this page reflect only a 25 year window, your bamboo plantation has a productive
life cycle of approximately 100 years. Additional to what is displayed within the adjacent charts, you will have freehold
or long-term lease title to the land, and benefit from capital improvements to the land, in addition to ownership of all
the bamboo that is planted on the land.
*Notes:- Land appreciation has not been factored in.
- Base case values assume an annual yield of 15 tonnes/acre and that the sales price rises by 4% p.a. beginning in year 6, however the minimum price guarantee of USD 500 is fixed regardless of year.
Agricultural land in Kenya continues to climb at a staggering annual rate of 12%
Assumption Measure Base Case Range Comments
Survival Rate% of Initial Planting
100% 100%Your plantation will have a 100% survival rate due to the fact that APC replant any bamboo that dies or is damaged at no additional cost to you.
YieldTonnes per Acre (dry fibre)
15 12-18Fully irrigated and cultivated APC bamboo is expected to yield between 20-25 wet tonnes per acre, and is expected to produce about 12-18 tonnes of dry fibre per acre.
Sales PriceUSD per Tonne
USD 500USD 900-
3,000
Bamboo fibre has been selected as the desired end product, although this will be dependent on market dynamics at the time of harvest, as such, the most profitable viable end product will be selected at harvest time. The retail pricing of bamboo fibre is currently USD 900-3,000 per tonne, depending on its decitex (count grading).
Price Increase % P.A 4% 3-5%
World inflation typically ranges between 3-5%, therefore the sales price has been estimated to rise by 4% p.a. beginning in year 6. The minimum price guarantee of USD 500 is fixed regardless of year. Inflation is significantly higher in emerging economies compared to developed industrialised ones.
Full Harvest Term
Years 15 up to 100
Bamboo is harvested annually beginning in year 5. Although the initial management agreement term is 15 years in duration (if APC Management is appointed), it is renewable upon the same terms upon expiration. Bamboo regenerates and thus can be harvested for a substantially longer time frame if requested.
Return on Invested Capital (ROIC)*
% 295.01%295.01-699.33%
ROIC is dependent on the bamboo fibre yield, sales price and holding period. ROIC ranges between 295.01-699.33%, over 15 to 25 years, assuming an annual yield of 15 tonnes/acre beginning in year 5 and a sales price of USD 500, rising by 4% p.a. beginning in year 6.
Annual Rate of Return (ARR)*
% 19.67%19.67-27.97%
ARR is dependent on the ROIC and the holding period. The ARR ranges between 19.67-27.97% over 15-25 years, assuming an annual yield of 15 tonnes/acre beginning in year 5 and a sales price of USD 500, rising by 4% p.a. beginning in year 6.
Programme Overview
27
Assumptions:
- APC Management is selected- Annual yield of 15 tonnes per acre from year 5 onwards - Prices rise by 4% p.a. beginning in year 6, however the minimum price guarantee of USD 500 is fixed regardless of year
Return on Invested Capital (ROIC) is a profitability ratio. It measures the return percentage for those who have provided capital. The ROIC% tells us how good the product is at turning capital into profits.
Annual Rate of Return (ARR) is the average annual percentage of returns that you can expect based on your initial capital. (ROIC/# of Years)
Annual Harvest ProfitAPC GUARANTEE a minimum purchase price of USD500 per tonne of processed bamboo fibre and this GUARANTEE is included in the management agreement.
Years Gross Profits USD Mgt. Fee USD (30%) Net Profits USD Annual ROI%
Year 1 - - - -
Year 2 - - - -
Year 3 - - - -
Year 4 - - - -
Year 5 $7,500 $2,250 $5,250 21.88
Year 6 $7,800 $2,340 $5,460 22.75
Year 7 $8,112 $2,434 $5,678 23.66
Year 8 $8,436 $2,531 $5,906 24.61
Year 9 $8,774 $2,632 $6,142 25.59
Year 10 $9,125 $2,737 $6,387 26.61
Year 11 $9,490 $2,847 $6,643 27.68
Year 12 $9,869 $2,961 $6,909 28.79
Year 13 $10,264 $3,079 $7,185 29.94
Year 14 $10,675 $3,202 $7,472 31.13
Year 15 $11,102 $3,331 $7,771 32.38
Year 16 $11,546 $3,464 $8,082 33.68
Year 17 $12,008 $3,602 $8,405 35.02
Year 18 $12,488 $3,746 $8,742 36.42
Year 19 $12,988 $3,896 $9,091 37.88
Year 20 $13,507 $4,052 $9,455 39.40
Year 21 $14,047 $4,214 $9,833 40.97
Year 22 $14,609 $4,383 $10,226 42.61
Year 23 $15,194 $4,558 $10,636 44.31
Year 24 $15,801 $4,740 $11,061 46.09
Year 25 $16,433 $4,930 $11,503 47.93
15 Years Accumulated Net Profit USD 70,803 25 Years Accumulated
Net Profit USD 167,838
ROIC 295.01% ROIC 699.33%
ARR 19.67% ARR 27.97%
Programme Overview
28
Total Gross Profit Harvest Cost and Sales Commission Fees*
120,000
100,000
80,000
60,000
40,000
20,000
0
-20,000
-40,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
7,50015,300
23,41231,848
40,622
49,747
59,223769,237
79,321
90,046
101,148
-24,000
Programme Overview
Years
USD
Base Case Forecast (15 years)
A comparison of different key variables over a 15 year term, under different fibre yield scenarios, is provided to the right (12, 15 and 18 tonnes/acre per year):
Notes
• Bamboo is harvested annually beginning in year 5
• End product is assumed to be bamboo fibre, with a sales price of USD 500/tonne when harvesting begins in year 5.
• Sales price is assumed to rise by 4% p.a. beginning in year 6, however the minimum price guarantee of USD 500 is fixed regardless of year.
• Accumulated Profit is net of Harvest Cost and Sales Commission fees (30% of gross sales proceeds)*
• No land appreciation is taken into account
* If APC Management is appointed
Return on Invested Capital (ROIC) is a profitability ratio. It measures the
return percentage based on your initial capital. The ROIC% tells us how
good the product is at turning capital into profits
Low Case Base Case High Case
12 tonnes/acre
15 tonnes/acre
18 tonnes/acre
AccumulatedNet Profit
USD 56,642 USD 70,803 USD 84,964
ROIC 236.01% 295.01% 354.02%
29
Programme Overview
Base Case (15 tonnes/acre) Low Case (12 tonnes/acre) High Case (18 tonnes/acre)
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Accumulated Net Profit by Scenrio
Years
USD
The sales price is assumed to grow by 4% p.a. beginning in year 6, however the minimum price guarantee of USD 500 is fixed regardless of year*.
* If APC Management is appointed
Comparison of Forecast Scenarios (15 years)
30
31
Biological
Growth
Weather
Conditions
Fire
Pests and
Disease
Storm
Damage
• Continuous investment in research and development ensures that APC achieves its
goal of improving quality, quantity and consistency of yields.
• 100% survival rate due to the fact that APC replant any bamboo that dies or is
damaged at no additional cost.
• End processing also requires specific proprietary knowledge and processes, in
order to deliver economies of scale.
• Kenya offers ideal growing conditions for bamboo.
• Kenya attract high average rainfalls and sunshine, with average daily temperatures
between 23 and 28 degrees Celsius.
• To mitigate against drought, APC develops supplementary water supplies.
• As part of its land procurement process, APC establishes irrigation infrastructure for
the plantation site prior to the transfer of ownership.
• Irrigation supply is typically sourced from local dams, aquifers, or rivers, and secured
by water extraction licenses where necessary.
• Fire risk is minimised by constructing wide fire breaks which are maintained free of
all flammable material throughout the dry season.
• A programme of interplanting eradicates any wild grass incursions into the estates.
• All staff are trained in fire prevention and fire control, and workers are provided with
light-duty fire-fighting equipment, which can be mounted on the tray of a utility
vehicle in a matter of minutes.
• Staff will be available at your plot 24 hours a day, 7 days a week.
• Sprinkler irrigation systems can instantly cover an entire plantation with water
pumped to all areas, supported by engine-driven systems in the event of
power outage.
• There are very few pests that inhibit the growth of bamboo, the species is naturally
pest resistant to a large variety of pests.
• Disease is rarely a problem due to the fast growing and hardy nature of bamboo.
• Drip irrigation allows instant delivery of pesticides and fungicides to every clump
if necessary.
• Tropical zones attract hurricanes and cyclones. APC however, establishes its
plantation sites inland, where the likelihood of cyclones is greatly diminished.
• Monsoon rains are planned for, and sites are chosen above the flood plains
Installed drainage and water storage systems are planned scientifically to benefit
from monsoons.
• To reduce the risk of freak storm damage, a row of wind-resistant host species are
planted along the vulnerable edge of the plantation.
Programme Overview
Risk Mitigation
32
Appendix - APC Group
• Group turnover of around USD 53 million
• New retail and wholesale fragrance brand developed
• Joint programme agreed with an Indian growers group
• Private placement approved with leading Gulf-based private equity group
• Group turnover of around USD 8.5 million
• Credited with reintroducing the Aquilaria Crassna species to Sri Lanka
• Group turnover of around USD 59 million
• Significant Gulf-based owner approved structure
• Opens retail perfume and cosmetics outlets and concessions in key Asian cities and the
Middle East with global retailers
• Expansion into China – major scientific and commercial collaborations signed with
established parties
• Group turnover of around USD 36 million
• First commercial harvests started, with yields and returns ahead of forecasts
• Asset Management division established for market research and due diligence
• Group turnover of around USD 9 million
• Rapid expansion of Aquilaria plantations in Thailand
• Acquisition of Aquilaria distillation and research centre in Thailand
• Expansion into bamboo growth and ownership in Kenya
• Record high turnover of USD 70.3 million and net profit of USD 6.7 million *
• Opens one of Southeast Asia’s largest agarwood processing facilities in Johor, Malaysia
• Attained Shariah compliance approval for one of its products from the IBFIM
• Strategically expands its Aquilaria plantations into Malaysia
Aquilaria programme conceived2009
2014
2013
2012
2011
2010
2015
Turnover Net Profit
Group Sales
2010 2011 2012 2013 2014 2015*
80m
70m
60m
50m
40m
30m
20m
10m
0
Year Ended 31st December
Turnover Net Profit
2010 USD 8,559,159 USD 984,158
2011 USD 9,034,528 USD 1,272,618
2012 USD 35,961,426 USD 3,658,555
2013 USD 53,491,926 USD 4,011,894
2014 USD 58,800,000 USD 6,113,205
2015* USD 70,300,000 USD 6,742,000
*Unaudited figures
33
Appendix - APC Group
Agarwood Specialist
Discovery
Development
Production
• APC is the world’s most successful, award-winning,
agarwood grower
• Pioneers in the agarwood industry
• APC has 25% stake in total managed assets
• Owners of its intellectual property processes
• APC invests and owns its own plantations
• Heavily investing in back end manufacturing and distribution
APC has Over 10 Years of Research and Development History
• Founded on the back of extensive and ongoing research and development
• Scientific and Research Advisory Board consisting of leading, recognised experts in the
bamboo plantation sector
• Working with recognised scientific and academic industry research groups
• Inaugural agarwood owner harvests during 2012, validates APC’s business plan
• Trial harvests since 2009
• Further research and development throughout, results in consistent yield and new
markets for end products
• Capacity to deliver trusted and, more importantly, consistent supply, has attracted
premiums over market prices
• APC has established its own luxury brands thats have catapulted its image, with its
fragrance brand now receiving endorsements from celebrities and royalty
• APC looks to maximise market share in all bamboo end product markets
• Global corporate footprint established in Switzerland, Luxembourg, Malaysia, Thailand,
Singapore, Indonesia, Sri Lanka, Hong Kong, UK, UAE, and the USA
• APC commences commercial plantations in 2008
• Develops its own extensive nursery operations in Sri Lanka, followed by Thailand,
ensuring the highest quality elite planting stocks
• Survival rates strengthen with each vintage through rigorous research and development,
and accumulation of intellectual property
APC Offers the World’s
Most Advanced and
Proven
Technical Expertise
“ ”
34
Appendix - APC Group
Group CEO - Barry Rawlinson
Barry is a British national with extensive overseas executive and management experience.
Graduating from the University of Canterbury with a Master of Business Administration (MBA),
he has held the position of Group Chief Executive Officer of Asia Plantation Capital since 2010.
Barry has more than 30 years of expertise in senior management, with 10 years based in the
agroforestry industry, developing and managing sustainable plantations.
Barry’s interest in the environment and ecological sustainability issues, together with a
commercial background, attracted him to the forestry industry in Thailand and subsequently
to Asia Plantation Capital. He has orchestrated and piloted a range of social and environmental
projects that have become a core principle of Asia Plantation Capital’s corporate and commercial
philosophy.
CEO Asia Pacific - Steven Watts
Steve joined the APC team to spearhead its plantation acquisitions and management in Malaysia.
He is also overseeing the establishment of a retail presence in malls around the country, and
the opening of regional branch offices for APC. He brings with him more than 30 years of
experience, and is formerly a Senior Board Director of Jaguar Cars.
CEO Europe - Gary Crates
A successful international executive with a broad range of senior management experience, from
owning multiple international franchises, through to being a Regional Director of a major multi-
national business with 500+ staff and a USD 200m turnover.
As the CEO of Europe, Gary drives the growth and expansion of Asia Plantation Capital into Europe,
initially focusing on key strategic markets in the UK, France, Germany and Switzerland. A seasoned
professional in all aspects of real estate-based investments, Gary has been involved in various global
projects such as social housing in Brazil, residential properties in Romania and Spain, agricultural
projects in Africa and Europe, and now sustainable forestry plantations in Asia.
CEO Middle East and FDB Dubai - Dean Henry
Dean Henry has more than 20 years’ experience in customer relations and interactions, having
run large consultancy teams and headed up several investment businesses. Dean has held UK
FCA Approved Person status (FCA was previously known as FSA), which provided him with
considerable insight into understanding the needs and requirements of high-net-worth clients.
He has acquired a great depth of market knowledge by dealing both with individuals, as well as
large international corporates and consortia. Dean is currently CEO of Asia Plantation Capital
LLC in the Middle East, specialising in marketing and representing APC Group projects and
businesses in the lucrative Middle Eastern market place.
Key Management and Executives
35
Appendix - APC Group
Operations Director - Jinda Tonkhambai
Jinda is a Thai national whose family has been in the agricultural business for generations. She
assumed her role in the family business at a young age, and has acquired a lifetime’s experience
in the operational management of farms and plantations. Jinda grew up in the rural area of Sakon
Nakhon in Northeast Thailand, which is now a key strategic region for the development of Asia
Plantation Capital’s new plantations. She offers her years of experience and network to Asia
Plantation Capital, acting as a Board Director for Asia Plantation Capital Holdings Ltd, Thailand,
and also as Managing Director for Asia Plantation Capital Distilleries.
A senior figure and major employer in the local community, Jinda offers a local commercial
advantage through her network of contacts. Her principal role is as Senior Director of Operations
for plantations in the Sakon Nakhon area. In this integral day-to-day role of plantation management,
she is responsible for operational staff recruitment, training, liaising and negotiating with vendors
and suppliers, budgeting and strategic planning. She is involved in land identification and
acquisition, and oversees the architectural design of the plantations, as well as being responsible
for a large, local workforce.
Agricultural Director - Robin Jewer
With a PhD in organic farming and husbandry, Robin has more than 25 years’ experience in the
management of global agricultural operations. Born in the UK, and having spent the first part of
his career working on large UK farms, Robin went on to manage some of Russia and Europe’s
biggest agricultural estates for both listed and non-listed companies. Robin is ‘Basis’ qualified,
which enables him to dispense advice on agronomy to current and would-be growers, and
lists his tenure as the Agricultural Director for the Saudi royal family as one of his many career
highlights. Robin’s agroforestry expertise and experience play a vital role in the development and
success of APC’s managed plantations.
Logistics Director - George Auger
With a Master’s degree in Supply Chain Logistics, George brings decades of experience to his
role as Logistics Director at APC. He has worked in the USA, Spain, Poland, the Dominican
Republic and Russia in a variety of capacities ranging from farm manager to agronomist, and now
specialises in processes that ensure the efficacy of the supply chain in ideal, vertically integrated
business models. In his younger days George worked for the UK’s Forestry Commission, and,
most recently, has been involved in maximising agricultural yields and creating product control
systems on extensive estates in Europe.
Thailand Chairman - Roger Hargreaves
Roger is also the Operations Director for Thailand and, with his extensive experience in identifying
and negotiating suitable land purchases, is actively involved in the expansion of new plantations
in Laos and China. He is a qualified Independent Financial Adviser, and a diploma graduate from
The Chartered Insurance Institute, London, of which Her Majesty the Queen is patron.
Key Management and Executives
36
Special Scientific Advisor - Dr Pakamas ChetpattananondhPh.D. in BioScience and Technology, M.Sc. in Environmental Diagnostics, B. Eng. in Chemical Engineering
Dr Pakamas is an Assistant Professor at the Department of Chemical Engineering - Prince
of Songkla University, Thailand. She obtained a degree of B Eng in Chemical Engineering
from the Prince of Songkla University, a MSc in Environmental Diagnostics, and a PhD in
BioScience and Technology from Cranfield University, UK. She now works hand in hand with
Songkla’s specialist research team. For the last 12 years, Dr Pakamas has focused on detailed
research into the distillation and yields of agarwood in Thailand, and is now a recognised
academic authority on the subject. She is also currently involved in ongoing collaborations
with universities in Malaysia and China.
Scientific Advisor - Dr Kodi Isparan KandasamyPh.D. and M.Sc. in Plant Biotechnolgy, B.Sc. (Hons.) in Botany
Dr Kodi is a plant biotechnologist with over 30 years of experience in the field of plant science,
and is currently the Senior Vice President at the Business Development and Investment Division
of the Malaysian Biotechnology Corporation. He has a PhD and a MSc in Plant Biotechonolgy,
and a BSc (Hons) in Botany. Prior to joining the Malaysian Biotechnology Corporation, Dr Kodi
was, for more than eight years, the Senior Scientist and head of the Tissue Culture Laboratory
at the FRIM (Forest Research Institute Malaysia). He was also previously the R&D Manager for
TropBio Research Sdn. Bhd., a private Malaysian biotechnology company.
He has published over 100 publications and is a member of the editorial boards of a number
of local and international scientific journals, including being on the executive editorial board
of the Journal for Tropical Medicinal Plants. He is also a member of the Genetic Modification
Advisory Committee (GMAC), representing the Malaysian Biotechnology Corporation.
Scientific Advisor - Dr Yumi Z Has-Yun bt Hashim
PhD in Nutrition and Cancer, M.Sc. Eng. (Bioprocess), B.Sc. (Hons.) BioMedDr Yumi is an Associate Professor at the International Islamic University Malaysia’s Kulliyyah of
Engineering, Department of Biotechnology Engineering, and a Visiting Academic at the School of
Biomedical Science of the Charles Sturt University in Australia. She has a PhD in Nutrition and Cancer,
a Msc Eng (Bioprocess), and a BSc BioMed (Hons). Dr Yumi has been working in the interdisciplinary
area of biomedical science-biotechnology-bioprocess engineering for more than a decade, with
a special interest in agarwood. She has published articles, as well as presented papers at various
conferences in Malaysia and overseas.
Scientific and Research Advisory Board
Appendix - APC Group
37
Scientific Advisor - Dr Dai Haofu, Ph.D.
Dr Dai is the Deputy Director of the Institute of Tropical Bioscience and Biotechnology and
the Chinese Academy of Tropical Agricultural Science. He graduated in chemistry from
Jiangxi University in China, and thereafter was admitted as a candidate for ‘successive
postgraduate and doctoral programmes of study’ in the Kunming Institute of Botany,
Chinese Academy of Sciences. He specialised in Biology at the German Academic
Exchange Centre (DAAD) and continued his post doctorate degree at Heinrich-Heine-
Universität Düsseldorf, Germany.
Dr Dai has more than 10 years of extensive agarwood research and development
experience. He has conducted systematic studies, not only on domestic agarwood
(including Qi Nam), but also on agarwood from 10 foreign countries. He has hands-
on experience of agarwood plantations, and has invented and developed a successful
inoculation method, which he patented. In addition, Dr Dai actively develops agarwood
related downstream products, and has developed a high-end perfume, essential oil, tea,
cigarettes and wine. He heavily promotes sustainable development within the agarwood
industry. Dr Dai is widely acknowledged as one of Asia’s leading experts in agarwood and
has appeared on CCTV (China Central Television) on numerous occasions.
Scientific and Research Advisory Board
Appendix - APC Group
38
Forestry Correlation (1987-2014)Independent Return Drivers
- Very low historic correlations
with other asset classes,
making it an excellent
portfolio diversifier
- Inclusion of timber returns
enhances portfolio efficiency
and brings about lower
risk levels
- Growth determined by
organic factors rather than the
economic climate
Natural Inflation Hedge
- Forestry in the long-term is
strongly correlated with inflation.
Its organic growth components
make it ideal for hedging against
inflation, particularly if
unanticipated
U.S Treasury Bills (90d) 0.56
Inflation (CPI) 0.46
S&P 500 0.23
S&P GSCI 0.21
MSCI EAFE International 0.19
Russell 2000 0.14
Barclays Agg. Bond Index 0.14
NCREIF Real Estate 0.02
NAREIT -0.16
-0.2 0 0.2 0.4 0.6
Source: Campbell Global (2015) Timber Primer : Campbell Global.
S&P GSCI 0.71
U.S Treasury Bills (90d) 0.67
NCREIF Timberland Index 0.46
Barclays Agg. Bond Index 0.18
MSCI EAFE International 0.13
S&P 500 0.06
NCREIF Real Estate 0.02
Russell 2000 -0.09
NAREIT -0.13
-0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8
Source: Campbell Global (2015) Timber Primer : Campbell Global.
Inflation Correlation (1987-2014)
Appendix - Asset Class
39
Best Performing Asset Class- Forestry has historically outperformed traditional asset classes
Agroforestry Returns vs. Other Asset Classes
NCREIF Timber
Global Bonds
Global Stocks Emerging Market Stocks
Large Cap American StocksReal Estate
Small Cap American Stocks
1970
1975
1980
1980
1985
1990
1995
2000
2005
2010
2015
2,500
2,000
1,500
1,000
500
0
Source: Adapted from The International Woodland Company (IWC) (2013) Timberland Investments in an Institutional Portfolio: IWC. It has been assumed that the figures between1987-2012 can be reflected over the period 1970-2015.
Appendix - Asset Class
40
Emerged as an Asset Class in the 1980s
• Biological growth reduces risk of negative returns
• Funds invested now in excess of USD 30 billion
• Superior risk-return profile
- Exit timing flexibility and inherent biological growth provide attractive return structure
- Biological growth has historically driven more than 50% of timberland investment returns, a factor independent of
economic climate
Forestry Volatility vs. Other Asset Classes
Ann
ual C
ompo
und
Retu
rn
Annual Standard Deviation
Forestry
Real Estate
Global Bonds
Emerging Market Stocks
Global Stocks
Large Cap American Stocks
Small Cap American Stocks
Appendix - Asset Class
Source: The International Woodland Company (IWC), NCREIF Timberland Index . 2015. [ONLINE] Available at: http://www.iwc.dk/wp-content/uploads/2014/09/Timberland-in-an-institu-tional-portfolio-March-2013-update.pdf. [Accessed 12 March 2015].
41
42
Kenya’s economy grew by an estimated 4.9% in the
first quarter of 2015, compared to 4.7% in the same
period in 2014, according to Kenya National Bureau of
Statistics. Agriculture, infrastructure, financial services
and information and communication technology (ICT)
contributed to the growth, but manufacturing and
tourism declined. The economy grew by 5.4% in 2014
and the World Bank, in its Kenya Economic Update for
March 2015, projected the economy will grow by 6%
in 2015, supported by lower energy costs, investment
in infrastructure, agriculture, manufacturing and other
industries. A stable macroeconomic environment,
continued investment in infrastructure, improved business
environment, exports and regional integration will help
sustain the growth momentum.
Kenya has the potential to be one of Africa’s great success
stories from its growing and youthful population, a
dynamic private sector, a new constitution, and its pivotal
role in East Africa. Addressing challenges of poverty,
inequality, governance, low investment and low firm
productivity to achieve rapid, sustained growth rates that
will transform the lives of ordinary citizens, will be a major
goal for the country.
Economic Overview
Appendix - Kenya
43
Real GDP Per Capita - Kenya
Agriculture remains the backbone of
the Kenyan economy, contributing
25% of GDP. About 80% of Kenya’s
population of roughly 42 million
work at least part-time in the
agricultural sector, including
livestock and pastoral activities.
Over 75% of agricultural output is
from small-scale, rain-fed farming or
livestock production. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
GDP per capita (current USD)
1,400
1,200
1,000
800
600
400
200
0
USD
Year
Source: The World Bank (2016) GDP per capita (current US$) , Available at: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?page=5 (Accessed: 2016).
Appendix - Kenya
44
Q1. Who is Africa Plantation Capital?
African Plantation Capital is the owner and operator of
bamboo plantations in Kenya, and forms part of the APC
group of companies (APC). Its aim is to build a diverse range
of commercial plantation and farming businesses across
Africa.
APC’s focus is on multicultural and diverse plantation
projects geared to the domestic and commercial demands
of the countries in which it operates. Working closely with,
and supporting fragile local communities, is an underlying
core principle of its business, providing social and cultural
support, as well as investment, to encourage these
communities to move away from traditional deforestation
and illegal logging activities as a main source of income.¬
Q2. Who is Africa Plantation Capital Management?
Africa Plantation Capital Management is the plantation
management company responsible for the planting,
husbandry and maintenance of plantations across Africa.
Q3. Who is the APC Group?
The APC Group has provided sustainable forestry and
agricultural land acquisition services to the global forestry
and agricultural sector for more than 10 years. It has its own
in-house land surveying team, as well as expert foresters
and agronomists.
The APC Group owns its own freehold and long-term
leasehold plantations in Sri Lanka, Thailand, Malaysia and
Kenya. Its wholly-owned land portfolio is free from any
bank debt, and has been purchased with the company’s
own funds.
The Group’s mission is to become the leading provider and
operator of sustainably managed forestry and agricultural
plantations - from project evaluation all the way through
to specific plantation acquisition. It believes that corporate
responsibility is not simply about securing profit for
shareholders and owners, but also involves a positive
contribution to society and the environment.
With local people at the heart of our operations, and sustainable
practices adopted throughout our agroforestry, we are a
positive example of the ‘people, planet, profit concept that is
inspiring modern, sound business practices today.
Appendix - Frequently Asked Questions
It currently has plantation and agricultural projects on three
continents, with operational projects at various stages in
Kenya, Thailand, Malaysia, China, Laos, India, Cambodia, Sri
Lanka, Vietnam and the U.S.
Q4. What are the benefits of owning my own bamboo
plantation?
Please refer to page 14 within this document.
Q5. What is bamboo and what is it used for?
Please refer to pages 7-13 within this document.
Q6. What is the global demand for bamboo per year?
The global market for bamboo and bamboo related
products is expanding at an extraordinary rate. Estimated
to have been worth around USD 25 billion 2012, the 2015
figure is believed to be approximately USD 42 billion.
Demand is expected to rise in line with population growth if
not significantly more once bamboo’s biomass applications
become main stream. Please refer to page 10 within this
document for further information.
Q7. What is the current price for bamboo fibre?
The retail pricing of bamboo fibre is currently USD 900- 3,000
per tonne, according to Alibaba, depending on its decitex
(count grading). Prices are subject to change and dependant
on market dynamics.
Q8. Why is there no guarantee on the bamboo fibre yield
per tree?
Bamboo clumps are growing organisms and thus fibre
yields per bamboo clump may vary. Africa Plantation
Capital Management however is confident of producing
an average of 15 tonnes of fibre per acre. Exact figures,
however, cannot be guaranteed.
Q9. Who will manage my purchase of land and bamboo?
The company that you choose to employ is entirely up to
you. If you wish, Africa Plantation Capital Management is
available to act as a manager. If chosen, you will enter into
a separate Management Agreement with Africa Plantation
Capital Management.
45
Q10. Are there any management fees/sales commissions’
payable?
As your designated plantation manager, Africa Plantation
Capital Management, will cultivate and manage your
bamboo plantation on your behalf. No annual management
fees are payable for the duration of your Management
Agreement. Instead, a harvest cost and sales commission
equating to 30% of the gross harvest sales proceeds will be
applied. As a result, Africa Plantation Capital Management’s
interests are completely aligned with your own.
Q11. How financially stable are Africa Plantation Capital
and Africa Plantation Capital Management?
Africa Plantation Capital and Africa Plantation Capital
Management are cash-based businesses with zero debt.
The APC Group has assets under management worth
approximately USD 650 million. This gives the Group
ultimate strategic and financial freedom, and a strong and
secure financial position. It also owns outright a large and
growing land portfolio, free from any bank debt.
Q12. Why does African Plantation Capital sell bamboo to
third parties?
Africa Plantation Capital made a strategic commercial
decision that entails sacrificing some of the returns on a
proportion of its plantation assets (that which is sold to
owners) in exchange for financial autonomy. The cash
inflow from its forestry plantation model has enabled it to
grow at a rapid pace, both in terms of size and capacity,
without any bank or third party debt.
Q13. Is the land suitable to cultivate the bamboo?
When considering sites for plantations, Africa Plantation
Capital performs a wide variety of tests in order to establish
the ideal conditions for optimal growth. These include soil
and water tests to check for fertility depth, as well as levels
of calcium (Ca), phosphorus (P), potassium (K), nitrogen (N),
and other organic matter. Access to a reliable water supply
is also a major factor. All of its plantations are optimised for
the cultivation of bamboo.
Q14. What if something happens to my bamboo?
Loss or damage to stock could occur for a variety of
reasons. If such an event or events (as listed below) were
to occur, Africa Plantation Capital Management undertakes
to replace the impacted bamboo with other bamboo (the
age of which will be determined by Africa Plantation Capital
Management at its sole discretion) at no extra cost to the
owner, for the entire duration of the agreement.
• Fire
• Lightning
• Wild animal damage
• Cyclone
• Drought
• Vandalism
• Flooding
• Pest and disease
• Theft
• Hail Damage
In order to mitigate all risk factors, rigorous assessment
and due diligence of plantation sites, are conducted. Each
plantation is irrigated, fenced, and has a forestry manager
available 24 hours a day.
Q15. How will I be notified when my bamboo is
harvested and processed??
When the bamboo’s is harvested, the harvest process
is meticulously controlled and recorded throughout. A
Harvest Certificate is given to owners, detailing the amount
fibre produced from their bamboo. This will be checked
and verified by the Processing Manager. At any stage of the
process, owners are welcome to observe or appoint their
own observers to oversee this procedure.
Q16. How long will it take to sell my bamboo fibre
after harvesting?
It takes around 90 days after harvesting to process the fibre
and sell it into the market place.
Appendix - Frequently Asked Questions
46
Q17. Can I take physical delivery of my bamboo?
Yes, you can take physical delivery of your bamboo if you so
wish. All costs associated to physical delivery will be borne
by you, the owner.
Q18. Does Africa Plantation Capital Management
underpin the bamboo price?
Africa Plantation Capital Management provides you with a
minimum price guarantee of USD 500 per tonne of fibre
that it sells on your behalf.
Q19. When do I receive a return on my bamboo?
Africa Plantation Capital Management shall, within 30 days
of the collection of the sales proceeds, pay the balance,
after deducting the 30% harvest cost and sales commission,
to the owner’s nominated bank account.
Q20. What is the ownership structure of my
bamboo plantation?
You gain ownership of your bamboo plantation either by
long-term lease, or title deed issued by the Kenyan Ministry
of Land, Housing and Urban Development.
Q21. How do we identify your purchase as distinct from
others owner’s?
You are allocated a unique reference code which is
associated with your specific piece of land and bamboo
clumps. This code is used throughout the term of the
agreement. Your harvested bamboo is individually tagged
with this reference code when weighed on the weighbridge.
Q22. Can I physically go and visit the plantation to see
my bamboo purchase?
Yes, visiting the plantation to see your bamboo is
encouraged, and allows you to develop a greater
understanding and appreciation of how the plantation
operates. We have a dedicated team on hand to arrange
and coordinate the trip.
Q23. What reports will I receive from Africa Plantation
Capital Management and when?
You will receive an annual growth report (Annual Report),
for the duration of the agreement. In addition, owners will
receive annual market trade reports.
Q24. How long is the management agreement for?
The initial Africa Plantation Capital Management agreement
is for a 15 year term. After the end of your term, we would
love for you to renew your contract with us, however, you
are under no obligation to do so and can terminate or
select another management company if you wish.
Q25. What happens if I pass away?
Your bamboo plantation will be treated the same as any
other asset in which you own. Just like your house, the
bamboo plantation is your property and can be passed on
to your children and future generations if you so wish. We
however are not estate planning advisors. While we will try
to be as helpful as we can, we recommend that you consult
with a professional estate planner to determine specifics.
Q26. Can I transfer title deed or lease, and are there any
fees involved?
Yes, you can transfer the title deed or lease. A nominal
administration fee will be charged for transferring the legal
titles.
Q27. In which currency are the returns paid?
Returns will be paid in United States Dollars (USD), to the
bank account provided. All payments will be made net
of all, withholding tax, if any; with all bank charges, fees,
expenses and other taxes borne by you.
Q28. Is there any tax payable?
Even though all returns are paid to you net of all withholding
taxes in USD, we are not tax advisors and legally cannot
offer tax planning advice. Please consult your local trusted
tax professional.
Appendix - Frequently Asked Questions
47
Q29. What is the legal structure, and what
documentation will I receive?
Land purchase is for Kenyan citizens only, all other
nationalities will receive a 99-year lease agreement.
For Kenyan citizens you will sign two copies of an Agreement
for Sale, upon completion you will receive a fully executed
copy of the Agreement for Sale along with the title deed
pertaining to the land purchase and a Bamboo Ownership
Certificate.
For all other nationalities you will sign two copies of a
Sales and Purchase Agreement and Lease Agreement,
upon completion you will receive a fully executed copy of
the Sales and Purchase Agreement and Lease Agreement
and a Bamboo Ownership Certificate.
All the above documents will be signed and stamped by
Africa Plantation Capital. The contents of the agreements
shall include items such as the names and addresses of all
owners, the plantation address, the number of bamboo
clumps purchased, and the size and exact parcel of the
land and the unique reference code relevant only to the
individual owner’s bamboo clumps.
If Africa Plantation Capital Management is your chosen
Managing Agent, you will be required to sign two copies
of the Management Agreement, of which you will receive
a personal copy, and one copy will remain with Africa
Plantation Capital Management. All the above documents
will be signed and stamped by Africa Plantation Capital
Management.
Q30. Is Kenya a safe country to invest in?
Please refer to page 38 within this document.
Appendix - Frequently Asked Questions
48
49
Disclamer
While Africa Plantation Capital and any other subsidiary and/or associate company of Africa Plantation Capital, collectively referred to as “APC”, makes every effort to ensure that the information provided to you (“You”), pertaining to the forestry and farming projects (“Opportunity”) is accurate and complete, it is provided subject to the following:
• The Opportunity is not a regulated product.
• APC, its authorised representatives and the Introducer do not provide investment advice nor are they licensed with any authority to do so. APC recommends in considering the Opportunity, You seek independent advice from your professional advisers. APC is not a regulated entity and there is no requirement for it to be so regulated as it is not undertaking any regulated activities.
• The information is intended only to assist You in deciding whether You wish to proceed with further investigation of the Opportunity and does not constitute an offer or solicitation or contract, or part of one, in relation to the Opportunity and shall not be so construed.
• You should not rely on statements or representations (oral or written) made by APC’s authorised representatives, the Introducer or any person engaged by APC in whatsoever capacity, in relation to the Opportunity or its value or condition as APC does not in any way guarantee, whether explicitly or implicitly, the accuracy thereof.
• The information contained in this document is purely for information purposes only and no representation or warranty is given as to the accuracy thereof. None of APC’s authorised representatives, the Introducer or any person engaged by APC in whatsoever capacity has any authority to make any representation or warranty, express or implied, in relation to the Opportunity.
• You must satisfy yourself regarding all aspects concerning the Opportunity including (by way of example but without limitation), its suitability, value or condition for your intended purpose, before You enter into any legally binding commitment and/or agreement in relation to the Opportunity by undertaking your own searches, researches, enquiries, surveys and inspections as well as taking all appropriate advice from qualified professionals including lawyers, accountants, forestry managers and surveyors.
• You are responsible for ensuring and verifying that under the laws of your home country, You are not prohibited from taking up the Opportunity. You are responsible for ensuring compliance with all relevant laws, regulations, directives and requirements of your home country. APC does not give any representation to that effect, nor does it assume any responsibility in that regard.
• Photographs are as they appeared at the time they were taken and are illustrative only and not definitive.
• Currency conversions, if given, are illustrative only, and will fluctuate from time to time. It is for You to satisfy yourself regarding the accuracy and “up to date” position of any financial figures and currency exchange rates, bearing in mind that currency exchange rates fluctuate.
• Drawings, measurements and any reference to distances are approximate only and not drawn to scale (unless otherwise specifically stated).
• Any information APC provides may be subject to change from time to time by APC without any notification.
• All information in this document is subject to change from time to time.
• No information in this document is to be copied, modified, distributed or reproduced in whole or in part without the prior written consent of APC.
• As far as applicable laws allow, APC shall under no circumstances whatsoever be liable to You, whether in contract, tort (including negligence), breach of statutory duty, or otherwise for any loss of profit, or any indirect or consequential loss arising from or in connection with any information provided to You in connection with the Opportunity.
50
www.africaplantationcapital.com
AFRICA PLANTATION
For further information, please contact your local office:
Switzerland
Asia Plantation CapitalQuai Gustave-Ador 181207 GenevaSwitzerland
Tel: +41 22 707 7330
Email: [email protected]
Luxembourg
Asia Plantation Capital4 Place de ParisL-2314 Luxembourg
Tel: +352 2648 3841
Email: [email protected]
Kenya
Africa Plantation CapitalCity Mall 3rd Floor Nyali – MombasaKenya
Tel: +254 733 203 084
Email: [email protected]
Africa Plantation CapitalUnit No. 5-9 , 5th floor Top Plaza Kindaruma RoadKilimani, Nairobi
Tel: +254 731 771 141
Email: [email protected]
Malaysia
Asia Plantation Capital21st Floor, Unit 9, G Tower199 Jalan Tun Razak 50400 Kuala LumpurMalaysia
Tel: +603 2181 6790
Email: [email protected]
Asia Plantation Capital25A Jalan Straits View 680100 Johor BahruMalaysia
Tel: +607 207 0276
Email: [email protected]
Thailand
Asia Plantation Capital 153/3 Golden Land BuildingC-3 Floor, Soi Mahardlek Luang 1 Rajdamri Road, LumpiniPathumwan, Bangkok 10330
Tel: +662 684 1082/3 Fax: +662 684 1081
Email: [email protected]
Singapore
Asia Plantation Capital107 Amoy Street, #02-01Singapore 069927
Tel: +65 6222 3386 Fax: +65 6221 2197
Email: [email protected]
Asia Plantation Capital 51 Cuppage Road, #07-11 Singapore 229469
Tel: +65 6632 8566 Fax: +65 6635 3233
Email: [email protected]
China
Asia Plantation Capital 325 Tian Yao Qiao Lu, Unit 2321Jia Hui Square, Xu Jia HuiXuhui District, PuxiShanghai PRC
Tel: +86 021 6432 5059 Fax: +86 021 6125 2030
Email: [email protected]
Hong Kong
Asia Plantation Capital Unit 1803, Jubilee Centre 18 Fenwick Street, Wanchai Hong Kong
Tel: +852 3628 3238 Fax: +852 3621 0693
Email: [email protected]
United Kingdom
Asia Plantation Capital 35 High Street Egham, Surrey TW20 9HL United Kingdom
Tel: +44 20 7060 3633 Fax: +44 20 3411 8293
Email: [email protected]
United Arab Emirates
Asia Plantation CapitalOffice 1102, Level 11, Arenco TowerMedia City, Dubai, United Arab Emirates
Tel: +971 4362 4701
Email: [email protected]
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