Investing for the Future

Transcription

1 Investing for the Future Palm Oil Commodity

2 Investment Theme: Commodities Investment Themes for the Next Decade Commodities Energy Agriculture Technology Emerging markets (BRIC) consensus view of leading investment banks, fund managers and analysts.

3 Why Commodities: 20-year historical prices Gold: +6% p.a. Reasons for commodity price increase Fast growth in demand due to rising income and population Oil: +7% p.a. Rice: +4% p.a. Supply not catching up fast enough Minerals and oil are depleting Agriculture land not increasing fast Climate change is limiting crop production overseas Iron Ore: +7% p.a. This trend will continue for the next 30 to 50 years due to rising income in China and India

4 All commodities follow this trend Metals and Energy Prices rose by 2.1% and 7.7% p.a. Food and Vegetable Oils rose by 2.5% and 6.8% p.a. Commodity price increase over the last 20 years Commodity price increase over the last 20 years Uranium Iron Ore Gold Nickel Tin Copper Lead Zinc Aluminium Crude Oil Natural Gas Coal LNG 2.1% 3.5% 7.7% 7.0% 6.0% 5.6% 5.6% 5.3% 5.2% 5.4% 5.0% 4.7% 7.0% Palm oil Olive oil Rapeseed oil Sunflower oil Soybean oil Cocoa Barley Rice Coffee Sugar Wheat Corn 3.6% 3.0% 2.5% 4.1% 3.9% 3.9% 3.6% 2.9% 2.7% 2.6% 5.6% 6.8% -2% 0% 2% 4% 6% 8% 0% 2% 4% 6% 8%

5 Palm oil price follows the trend Palm Oil price has increased by an average of 7% p.a. over the last 20 years and should continue to increase in the next 20 years CPO Price % increase p.a. Price of Palm Oil in 20 years 3% RM4,696 5% RM6,899 7% RM10, Palm oil is a a valuable commodity because it is highly versatile. Examples of its wide applications are: Food source cooking oil, pet food Chemical source soap, detergent, cosmetics, lubricant, oleochemicals Energy source biodiesel

6 Share of Palm Oil vs Other Vegetable Oils in Global Consumption Palm Oil gaining share in global consumption of vegetable oils Palm oil is gaining market share against other vegetable oils even though its price is rising faster than other vegetable oils Other Vegetable Oils Soybean Rapeseed Sunflower Peanut Cottonseed Coconut Olive Palm Oil (36% share in 2009) Price increase over the last 20 years Palm oil 6.8% Olive oil 5.6% Rapeseed oil 3.6% Sunflower oil 3.0% Soybean oil 2.5% Advantages of palm oil over other types of vegetable oils : Highest Yields per hectare Excellent r & D over Oil Palm

7 Summary 1. Invest in commodities your annual profit will increase as price increases 2. Oil palm has been a good investment in the past, and should continue in the future due to its versatility and strengths compared to other competing products Investment Lessons 3. Invest in a scheme where you truly enjoy the full upside as price increases

8 Golden Palm now offers you the opportunity to invest in a palm oil plantation and enjoy the full profit upside

9 Outline of the Investment Scheme The Investment Scheme: 19,600 (70%) Grower Plots is available for sale RM7,000 investment per Grower Plot Guaranteed annual return of 6% during 1 st 6 development years Enjoy 17 years of full plantation profit from Year 7 onwards Opportunity to extend returns after 23 years Enjoy plot buy-back and transfer rights The Asset: 7,000 acres of plantation land, divided into ¼ acre plots, giving a total of 28,000 Grower Plots Gua Musang, Kelantan year lease Status: Phase 1 30% of 1 st Phase is planted Fully planted by Dec 2013

10 Estimating potential returns ¼ acre = 1 Grower Initial Offer Price of RM7,000 Development stage (Yr 1 to Yr 6) Clearing of land Planting out Maintenance to maturity Commence harvesting Production stage (Yr 7 to Yr 23) Estate Maintenance, incl fertilizer programme Harvesting & transport to Mill FIXED RETURN OF 6% Year 1-6 RM420/year Achievable Targets from Plantation FFB Yields increasing from 17 tonnes/hectare to 30 tonnes/hectare in production stage CPO prices of RM 2,500 ANNUAL PAYOUT Year 7-23 RM910/year Note: This slide is based upon projections

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12 Sample Applications of Financial Planning

13 1. Alternative for Fixed Deposit Golden Palm (GP) for Fixed Deposit Invest in 8 plots for $56,000 # of GP plots Investment Annual Payout Yr 1-6 Annual Payout Yr 7-23 Interest if put in 2.75% 1 7, ~ ,000 1,260 ~2, ,000 2,100 ~4, ,000 3,360 ~7,280 1,540 Year 1-6 RM3,360/year Year 7 to 23* ~RM7,280/year (*average based on CPO price of RM2,500) 10 70,000 4,200 ~9,100 1, ,000 6,300 ~13,650 2,888 + land value on sale after 23 years ,000 8,400 ~18,200 3,850

14 2. Allowance for Child Expenses GP for Child Expenses # of GP plots Investment Annual Payout Yr 1-6 Annual Payout Yr 7-23 Invest in 5 plots for $35k 3 21,000 1,260 ~2, ,000 2,100 ~4, ,000 3,360 ~7,280 Year 1-6 RM2,100/year Year 7 to 23* ~RM4,550year (*average based on CPO price of RM2,500) 10 70,000 4,200 ~9, ,000 6,300 ~13, ,000 8,400 ~18,200 + land value on sale after 23 years

15 3. Retirement Allowance for Yourself or your Parents GP for Retirement Allowance # of GP plots Investment Annual Payout Yr 1-6 AnnualPay out Yr 7-23 Invest in 15 plots for $105k 3 21,000 1,260 ~2, ,000 2,100 ~4, ,000 3,360 ~7, ,000 4,200 ~9,100 Year 1-6 RM525/mth Year 7 to 23* RM1,150/mth (average) (*average based on CPO price of RM2,500) ,000 6,300 ~13, ,000 8,400 ~18,200 + land value on sale after 23 years

16 Why Golden Palm Profit share scheme, hence can enjoy full upside potential when commodity prices increase Strong management team Corporate governance Plantation expertise

17 Our Bill of Guarantees 6% return a year for 1st 6 years fully backed by cash deposited with a licensed trustee For remainder of the Scheme (Years 7 to 23) minimum 9% return a year if CPO prices exceed RM1,500/mt* 100% of audited net profits will be distributed Upon expiry of the Scheme in 23 years, you will share in any capital appreciation of the plantation In Year 19 we will give you the opportunity of extending the Scheme beyond 23 years through a replanting program We will repurchase Grower Plots from you at full price anytime after Year 6* Grower Plots are freely transferable after 12 months When all Grower Plots have been sold, we will establish a mechanism to facilitate trading of Grower Plots

18 Why Invest? Better than FD return Best hedge against inflation and currency depreciation Excellent Retirement Plan Provide Recurring Income to your child Investing in palm oil has many benefits: Palm oil prices increase Proven Industry