AGW Funds Management Ltd
ABN 64 149 301 299
349 Forth Road, Devonport Tas 7310
PO Box 1283, Devonport Tas 7310
Australia
Telephone: +61 (3) 6427 5019
Free call: 1800 446 979
Fax: 1800 770 186
Email: agw@websterltd.com.au
27th September 2012
Dear Grower,
Growers’ Newsletter September 2012
Tree health
It is now spring time and the walnut trees are really starting to move. The past winter has been the
best so far for winter chill accumulation. See the graph below which shows this year’s chill units
for the Tabbita Orchard compared to the previous 4 years. As mentioned in the last Newsletter,
this is important for even flowering and nut-set. The trees appear to be very healthy and the
orchards have had organic matter in the form of cow manure from nearby feedlots and gypsum
applied to improve soil health and micro-organism activity.
Orchard activities
The orchards are now receiving copper-based blight sprays as a preventative action against
walnut blight which can, if not prevented, cause crop loss due to rain events during mid to late
spring and early summer prior to shell hardening. Multiple spays will be applied over this period to
maintain cover on new vegetative growth.
Weed control is a year-round maintenance job but even more so in spring and early summer.
Mulching of pruned limbs and twigs is still in progress and the mulched material will break down
prior to harvest. The following picture shows the copper-based blight sprays being applied. Note
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the early stage of leaf and both female and male flower development. It is important to get the first
of these blight sprays onto the trees at the right time.
Blight spraying
Leeton walnut orchard coming into leaf (taken 25th Sept 2012)
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Male flower (catkin) at the stage where it is releasing wind borne pollen
Walnut sales 2012
Due to the previously reported heavy rain at harvest time in March this year, the walnut quality
was adversely affected. Hence a higher proportion of the crop than normal was sent to Vietnam to
be cracked, the kernel extracted and returned to Walnuts Australia for domestic sales. In-shell
walnuts were ranged in selected Woolworths’ stores prior to Ramadan which proved to be
successful and the retailer has requested a similar 500 gm pack for their stores prior to Christmas.
As well, Walnuts Australia has exported in-shell walnuts to Italy, Spain, Turkey and China.
Capital developments
1. Walnuts Australia reports that it is about to commence the construction of a hulling and
drying facility at the Leeton Orchard duplicating the existing facility at the Tabbita Orchard.
This is a major development worth approximately $3.4M and will mean that walnuts
produced at Leeton will be processed on site at Leeton.
2. Walnuts Australia’s parent company, Webster Limited has recently announced a capital
raising of approximately $20M to expand the existing orchard estate in the Riverina by
approximately 1,000 ha and also to build a cracking facility. This will enable Walnuts
Australia to produce its own walnut kernel here in Australia. It which will also complete the
vertical integration of Webster’s walnut division from root stock to kernel sales.
Growers in the 3 AGW Walnut Projects should feel comforted by this news that the owner of the
assets which the Growers lease, Webster Ltd is investing heavily in the walnut industry to ensure
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that their walnuts can be harvested and processed efficiently and also that Webster is prepared to
invest in walnut orchards in its own right.
Crop insurance
Growers should have received an invitation recently to take up the opportunity to insure their crop
in 2013 for fire and hail damage. The deadline has passed now to take up this opportunity and
invoices are about to be sent to participating Growers. As with past years, if the premium is not
received by AGW Fund Management Ltd within 14 days of date of invoice the insurance will not
be activated.
Defaulting Growers & credit card surcharge
There are still a number of Growers who remain in default on their 2011 and 2012 annual
maintenance and orchard right fees. I again urge Growers to pay their outstanding fees to protect
the integrity of the 3 Projects. Project viability is important and payment of management fees will
assist in their viability.
We also draw your attention to the introduction of a 2.0% surcharge that now applies to fees paid
via credit card. We continue to accept payments by EFT or cheque should you wish to avoid this
processing charge.
Tax deductibility of Project capital costs
As per the PDS for the 3 Walnut Projects, the Responsible Entity is obliged to advise Growers as
to the tax deductibility of the original capital costs of the Projects. Under sub-division 40F of the
Income Tax Assessment 1997, as it pertains to the write-off of eligible agricultural expenditure,
you may be entitled to a tax deduction for the capital expenditure attributable to the establishment
of walnut trees on your lot/s. This deduction is allowable when the walnut trees enter their first
commercial season and is a straight-line write-off at a rate of 13%. Please refer to prior tax
invoice summaries to ascertain the first year of commercial harvest. Based on the information
made available to AGW Funds Management Limited by Gunns Plantations Limited, the previous
Responsible Entity for the walnut projects, the relevant capital amounts are: AGW Walnut Project
No. 1 - $1,967.00 per walnut lot; AGW Walnut Project No. 2 - $1,993.32 per walnut lot and AGW
Walnut Project No. 3 - $2,003.18 per walnut lot. You are advised to seek independent taxation
advice in respect of the applicability of this information to your individual circumstances.
Gunns Limited
Further to recent media reports, please be advised that Gunns Limited and its subsidiaries,
including Gunns Finance Pty Ltd and Gunns Plantations Ltd (former Responsible Entity for the 3
AGW Walnut Projects) have been placed into receivership.
If Growers would like to know anything to do with the AGW Walnut Projects, please do not
hesitate to call the free call number (1800 446 979), and we will do our best to provide the
information you require.
Yours sincerely,
L.F.Titmus
General Manager
AGW Funds Management Limited
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