fiji vanilla project information memorandum

Information Memorandum

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FIJI VANILLA PROJECT INFORMATION MEMORANDUMAddressing Vanilla Bean Scarcity © Vanilla Plantations Fiji Pte Ltd July 2021


CHAIRMAN’S MESSAGEDear Investor,

VANILLA PLANTATIONS FIJI PROJECT

I invite you to read the Information Memorandum and Snapshot in relation to an exciting area of agriculture. The Information Memorandum is based on publicly available and verifiable industry material as well as industry information prepared by the Food and Agriculture Organisation of the United Nations (‘FAO’) and various university research bodies in India, France, Australia, Fiji, Israel and elsewhere.

Why invest? There are many reasons:

• Demand exceeds supply and vanilla is now called ‘Green Gold’.

• Big Food and it’s international flavouring and fragrance partners are seeking to diversify their sources of supply for Vanilla. At the present time, 80% of the Vanilla comes from Madagascar. With the growing demand for Vanilla worldwide, particularly with China and Brazil becoming large consumers, concerns about the security and concentration of supply are coming into sharp focus.

• A prudent risk management regime is embedded in the Business Plan.

• There is a high return on investment with net profit in the order of 58%.

• Laws in both Europe and America mean that “vanilla can only be used if it is 100% vanilla”.

Over the past decade, the owners of Vanilla Plantations Fiji Pte Ltd have accumulated a wealth of knowledge and experience in developing and operating a commercial scale Vanilla Plantation. Various vanilla regions in relevant countries were visited in this respect - India, Thailand and Indonesia.

Our experienced and credentialled team is focused on delivering quantifiable results and returns for our investors utilising previous international client contacts including members of Big Food and the international flavour and fragrance entities.

Vanilla Plantations provides its investors a complete life cycle solution for those seeking to directly own their own vanilla bean assets.

The recent high profile introductions of vanilla such as Vanilla Coke and Vanilla Pepsi confirm the popularity of natural vanilla flavour. Consumer preferences for natural products coupled with changes in regulation are very positive factors.

For example, the US Food and Drug Administration has banned a number of synthetic vanilla flavours.

Its business plan is designed to meet prudential risk tolerances. Our team has the experience and the skills to match. One of the directors developed a significant east coast of Australia agricultural undertaking including major projects in the Northern Territory.

Our team will work diligently to produce quantifiable and sound returns.

Yours sincerely

Frederick T Gulson ChairmanManaging Directorwww.vanillaplantationsfiji.com [email protected]+61 408 440 816GPO Box 16348 Suva Fiji Islands Coy No. RCBS2019L4631


THE VANILLA PROJECTWhat is the investment being offered?

The Vanilla Plantation Project provides the opportunity for investors to participate in the business of commercially growing Vanilla Plantations in the Fiji Islands. The Vanilla produced on the plantations is expected to produce at source Grade A-1 quality cured vanilla beans to be sold principally to Big Food and their suppliers, the international fragrance and flavouring markets, where strong market demand exists. In addition, the new emerging consuming countries of China and Brazil are placing further pressure on demand. It is the consumers love of “all natural” that is causing vanilla scarcity world wide.

The investment unit for the Vanilla Project is a vanilla garden, which is a single area of land over which the investor is granted a right to harvest. One vanilla garden comprises 6 vines. The project will be established and maintained by the Vanilla Plantations Fiji Pte Ltd on a collective basis for between 8 to 10 years. The yearly crop will be sold on a collective basis with net proceeds of sale distributed.

Each investor must pay a fee of US $3,100 per investment unit upon application. No further ongoing out-of-pocket expenses will be payable by the investor.

WHAT IS THE STRUCTURE OF THE VANILLA PROJECT?

Each grower enters into a Vanilla Investor Agreement under which they contract with the Vanilla Manager to establish a vanilla plantation and carry on the future management and maintenance of their plantation until the end of the fruiting period of up to 8 to 10 years.

WHAT IS THE INVESTMENT BEING OFFERED?

The Vanilla Project (the “Vanilla Project”) has been established to provide investors the opportunity to participate in a business of commercially growing vanilla gardens in Fiji. It is expected to produce vanilla beans to be sold for use in Big Food, such as Nestle, Unilever, Danone, Mars, Hershey and McCormick etc.

The unit of investment of the Vanilla Project is a vanilla garden. A vanilla garden comprises an area of 6 vines. Whilst all investors will be entitled to the net profits of their plantation, the Vanilla Project will be established and maintained by the Vanilla Manager on a collective basis and after establishment of growth the beans will be harvested annually and sold on a pooled basis and Net Proceeds of Sale distributed. It is the Vanilla Manager that undertakes the responsibilities of conducting the business at its cost as explained elsewhere in the Information Memorandum.


Our Mission StatementOur mission is to create a benchmark single origin vanilla bean plantation in Fiji for the

benefit of our investors.

To provide our international clients with a superior product and a superior service.

To respect the environment and conduct our business in a sustainable manner.

To provide our employees with a rewarding working environment.

To always seek better ways to do things.

To contribute to the unique way of life of all Fijian Islanders.

To promote gender equality principles.

Restrictions on Offerees and DisclaimersThis Information Memorandum (IM) relates to the offer of Vanilla Gardens to be managed by Vanilla Plantations Fiji Pte Limited (Coy No. RCBS2019L4631) (“the Vanilla Manager”).

This Information Memorandum is intended to provide investors with a guide to the principal features of the investment offering prior to an investment decision being made.

You are encouraged to read this Information Memorandum in its entirety and to seek independent professional advice where appropriate.

Applicants may apply for up to 300 vanilla gardens. For more than 300 gardens, please contact us. The Information Memorandum contains sensitive, confidential and privileged information. The information provided is highly confidential and remains proprietary information. No confidentiality or privilege is waived or lost by any unintended or accidental discovery or receipt of this Information Memorandum or part.

For Australian citizens only: a sophisticated, professional or experienced investor’s application will have their application accepted.


ContentsGroup Advisor Directory 7

Corporate Profile 8 Why Invest? 14 Origin, History and Uses of Vanilla 17 Four Commercial Imperatives to Invest 18

1. Investment Summary 19

2. Key Features of the Vanilla Bean Project 21What is the structure of the Project? 21What is the investment being offered? 21Who is the Vanilla Manager? 21How long is the investment? 21What are the fees and expenses? 21What are the main agricultural risks? 22Are there any agricultural incentives available? 22Market Dynamics of Vanilla & Vanilla Bean Supply 22Vanilla Worldwide Usage 23Truth in Labelling 24Our Vanilla Marketing Strategy 24Vanilla Scarcity Issue - what is happening in the vanilla market world? 25

3. The Vanilla Investment Project 26The Offer 26Structure of the Project 26Acceptance of Applications 26Group Structure 26Why Fiji? 26How does the Vanilla Bean Project work? 27What happens after the Investment Agreement is entered into? 27Your investment is solely self-funded. 27What will the indicative yields of vanilla bean be? 27Application of Vanilla Funds 28When will my vanilla garden be established? 28Will my vanilla garden be separately identifiable? 28Can I sell or transfer my vanilla garden prior to the termination of the project? 28Vanilla Bean Production pattern 28Is there a vanilla plant stocking guarantee? 29What does the Independent Horticulturist do? 29Can the Vanilla Project contribute to carbon neutrality in Fiji? 29Application Monies to be held on Trust 29


When will the vanilla beans be harvested and sold? 29Vanilla Bean - Yields and Anticipated Returns 30Vanilla Bean Prices - US$ per kg as at March 2021 31Indicative Income and Expenditure 32How will vanilla returns be calculated? 33How will investors be kept informed? 33Land secured 33Sustainable agricultural practices 33

4. Independent Horticulturist’s Report 34

5. Fees and Expenses 44Fees that apply to an Investment in the Vanilla Project (all self funding): 44

6. Risks and Risk Management 46Environmental/Growing Risks: 46Market/Commercial Risks: 47Other Risks: 48What is the country risk for Fiji? 49

7. Material Documents 50Investment Agreement 50Harvesting, Marketing and Sales Agreements for Vanilla Beans 50

8. Additional Information 51Application Monies to be held on Trust 51Certificates 51Change in Circumstances 51How to Apply 51Applicant’s Acknowledgment and Acceptance 52Vanilla Investor Agreement 53Power of Attorney 54Application Form and Payment Details 57Vanilla Plantations Group of Companies 58Glossary of Terms 59

9. ‘Vanilla Scarcity’ in the Media 63


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Group Advisor DirectoryFIJI

Legal AdvisorsCromptons Barristers and Solicitors QBE Insurance Centre Victoria Parade Suva FIJI ISLANDS

AccountantsErnst & Young Pacific House 7/1 Butt Street Suva FIJI ISLANDS

HorticulturalistPacific Grow) PO Box 1451 Sigatoka FIJI ISLANDS

BankerWestpac Banking Corporation Westpac House 1 Thompson Street Suva FIJI ISLANDS

AUSTRALIA

Cordato Partners Level 5 49 York Street Sydney NSW 2000 AUSTRALIA

Bacchus Associates Pty Limited “The Cooperage” Level 2 Suite 9 56 Bowman Street Pyrmont Point PO Box 630 Pyrmont NSW 2009 AUSTRALIA

Orchid SpecialistsKultana Orchids 39/6 Nawongprachapatana Road Khwang Sikan Khet Donmuang Bangkok 10210 THAILAND

Westpac Banking Corporation Royal Exchange 99 Pitt Street Sydney NSW 2000 AUSTRALIA


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Corporate ProfileThe Chairman, Frederick Gulson, has been involved in Australia in large scale agriculture for over two decades and is a fourth generation agriculturalist. His controlling interest in an agricultural enterprise in Australia produced, amongst other products, 200+ tons of essential oil. It was one of the world’s biggest producers and was the driving force for the establishment of similarly structured agricultural projects in Australia.

Mr Gulson’s companies live up to the vision that - “we will be fair and ethical in all we do.”

We are committed in Fiji to providing a level of quality and service that is second to none and to conduct our business in a sustainable and ethical manner, as we did with our Australian operations. We believe in onsite management and as such, Mr Gulson will be residing on the plantation and executing a ‘hands-on’ approach. This is consistent with our ongoing management practices in Australia.

We strongly believe in giving back to the community and we give much importance to providing fair compensation. This will encourage productivity. Continuous education is a priority. This will allow for employees to continually develop and will also help foster a strong relationship with the people of Fiji. Promoting gender equality is a priority.

As with all our Australian agricultural enterprises, we will be an ISO certified group and will continually improve our systems and procedures.

Innovation is in our DNA and is a large part of our future.

In short, we believe that there is high potential to expand cultivation without in any way affecting price.

Vanilla ManagerVanilla Plantations Fiji Pte LimitedCoy No. RCBS2019L4631GPO Box 16348SuvaFiji Islands

C/- Cromptons Barristers & Solicitors QBE Insurance CentreVictoria ParadeSuvaFiji Islands

Website: www.vanillaplantationsfiji.comEmail: [email protected]: +61 408 440 816


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Directors

Frederick gained his experience in growing vanilla as an orchid grower from the age of 12. He has now accumulated several decades of experience with growing orchids.

Frederick has extensive experience in large scale farming enterprises. His Australian company was the driving force for 15 similar structured agricultural projects in NSW, Victoria and the Northern Territory. One of the groups in which he was a substantial shareholder was a large essential oil producer with over 149,000,000 trees under cultivation. The essential oil products were sold to over 60 countries either direct to such manufacturers as the multinational companies of Colgate Palmolive, SC Johnson, Boots Pharmaceuticals and the like, as well as to large food and flavouring ingredients suppliers.

His company generated over 500,000 cubic metres per annum of sterile biomass which was developed for the wholesale and retail nursery market in South East Queensland and Northern NSW.

In addition, his company ran two large cattle herds; a timber production operation, grain production and a live eel supply business. Ultimately, a large publicly listed agribusiness approached Frederick to sell his properties and varied enterprises.

Frederick was then involved in the largest tobacco damages case undertaken by the US Department of Justice.

In short, Frederick has a strong understanding of the disciplines in diverse agribusiness sectors and importantly, in the supply of agricultural products to the multinational flavour and fragrance companies (IFF) and their intermediary suppliers and has connections with those entities.

His driving values, in addition to increasing investor returns, are expertise, innovation and integrity.

Frederick T GulsonB.A. LL.MChairmanManaging Director


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Mr Ryan has undertaken analyses of agricultural and horticultural industries marketing and assistance arrangements for the Australian and New Zealand governments.

A former Senior Adviser to Deputy Prime Minister, Commonwealth, State and Territory Ministers for Agriculture, primarily covering commodity and biosecurity issues.

Mr Ryan was previously the Policy Director of the NSW Farmers Association, the largest farm member organisation in Australia.

He undertook the independent review of the NSW Livestock Health and Pest Authorities which are responsible for biosecurity for agriculture and horticulture in NSW.

He has been retained by Commonwealth and State governments on a consulting basis primarily on biosecurity issues for various industries.

For private sector organisations, he has undertaken studies in Europe of Irish, British and French agricultural/horticultural production and marketing arrangements. In South America, he has undertaken studies of agricultural/ horticultural production in Argentina and Uruguay.

He has undertaken major studies for agricultural and horticultural inputs, supplying industries such as the fertiliser industry in Australia.

Mr Ryan chaired the 2007 Apimondia (World Honeybee) Congress in Melbourne and was the Australian delegate to the Apimondia Congresses at subsequent conferences in Montpellier in France and Buenos Aries in Argentina.

Mr Ryan’s CV indicates his deep knowledge and passion for horticulture and agriculture.

Terry RyanB.Ec


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Post Graduated Diploma Horticultural Science - Massey Uni. NZ 2012

Bachelor in Agriculture - University of South Pacific 2007

Diploma in Tropical Agriculture - Fiji College of Agriculture

2004-2018 Various horticultural post graduate studies

Marike has a passion for agriculture and has commanded horticultural teams ensuring teamwork both at the Research Station as well as in off station activities.

He will be assisting the directors in successfully recruiting the following key plantation personnel and managing the plantation. There will be two teams of about 50 women per team each led by two suitably qualified women reporting to Marike Raduaiu.

Harry SakitiVanilla Project PlantationManager

Key Plantation Personnel

Kartika has 13 years experience in the corporate accounting profession in Fiji in industries as diverse as transport, marketing and printing. She has a strong understanding of the requirements of working within the accounting regulations in Fiji including payroll, FNPF as well as attending to the immigration formalities for executive staff.

Additionally, she has attended to a number of matters relating to foreign investment in Fiji.

Kartika has a keen sense of both professionalism and timeliness. Being raised in the Fijian Islands she has deep and extensive experience in dealing with the various groups and a range of Fijian commercial and cultural issues.

She is very familiar with the various forms of accounting software. Her knowledge and local experience will prove invaluable in our project. Her skill sets will be most valuable working within the Fijian Islands context.

Kartika (Kitts) DeviB.A.(major in Accounting& Economics)


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VANILLA PLANTATION STRUCTURE VITI LEVU - FIJI ISLANDS

Chairman/Managing DirectorFrederick Gulson

Fiji Resident

Independent Vanilla Horticulturist Fiji Financial Controller Vanilla Manager


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Senior Management FunctionsThe Vanilla Project Management comprises one horticulturalist and a Vanilla Plantation Manager. In addition, we have a back office function as well as sales and marketing functions

We have a well experienced and credentialled horticulturalist who has qualifications in both New Zealand and Fiji. The horticulturalist has sound experience with Vanilla and Rare Spice cultivation and production in Fiji. These crops were exported and most with a value added. The horticulturalist has a passion for agriculture and has commanded large horticultural teams in Fiji.

The on-farm personnel will be overwhelmingly women. The work requires full time employees who are dexterous and work with alacrity and consistent with gender equality principles. As required, the Vanilla Manager will call upon various external expertise to assist with particular issues from time to time.

The back office function will be responsible for all accounting functions, payroll matters and shipping the vanilla product to overseas clients, Big Food and their suppliers, the IFF multinationals; together with the remittance of profit to investors. The Managing Director has a long history of working closely with these entities.

All financial reports and crop records will be “backed up” off site regularly.

The Board is keen to ensure that all staff have a variety of talents and skill sharing abilities, particularly those working on the plantation. The Board believes that this will galvanise the entire plantation and elevate this Vanilla Project beyond what is expected of current vanilla plantations elsewhere.

“The amount of all the vanilla beans in the world is not sufficient to flavour everything that everyone wants to flavour with vanilla”

- Carol McBride, US Vanilla Category Manager at Symrise

(Symrise is one of the world’s most respected supplier of essence, flavours and ingredients.)


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Why Invest?Vanilla Bean Scarcity - An Investment Opportunity

“Our clients in Europe and North America are not switching: we see a sustained demand for natural vanilla extract. The market dynamics are still being driven by consumer preferences for natural vanilla.”

Yannick Leen, Global Competence Director for Vanilla, Symrise, March 2019

What has led to the continued price hikes in vanilla since 2013?There are a number of reasons.

The supply of vanilla is so in demand that Madagascan farmers guard their crops at night. Global food and beverage companies enter into long term supply contracts with the Madagascan Commerce Ministry to ensure their vanilla supply security.

Importantly, consumers world wide are demanding natural ingredients further accelerating global demand.

In short, the world market is experiencing some significant and enduring supply shortages. Put into context, the global demand is 3500 tons with global production being around 2400 tons. There is a strategic vulnerability for Big Food. Big Food is in effect dependent on Madagascar for their vanilla. Madagascar produces about 80% of the world’s supply.

“Vanilla is in very short supply.”Mintec (principal independent source of intelligence on

rare spice commodities such as vanilla)

Mintec’s observations are supported by Bloomberg, a financial publication which sources its information from the leading US flavouring company and Madagascar Commerce Ministry. Madagascar is the world’s leading producer of vanilla.

“Globally, demand for pure vanilla extract’s continues to grow….. the global vanilla demand deficit needs to be addressed through vanilla cultivation in new regions.”

Amy Loomis, Business Development Manager, Symrise Flavour


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As one food and flavouring US company put it:

“Vanilla is unique, as it is the only flavour to have a standard of identity. It is also the only flavour that may be specifically identified on ingredient legends. Such language as “pure vanilla extract”, “natural vanilla flavour” or similar are allowed. All other natural flavours are simply designated as ‘natural flavour’…. Globally, demand for pure vanilla extract continues to grow……. This is in response to consumer preferences for naturally flavoured products.”

Donna Berry, Food Business News\

“Growing consumer expectations for pure and all natural foods and ingredients have spurred global food manufacturers to embrace the use of pure vanilla, this has driven up global demand dramatically and resulted in massive price hikes.”

McCormick Spices

“The biggest issue will be quantity that is exerting more upward pressure on prices given large food companies including Nestle and Hershey have said they will use natural flavourings. This has led to a hurried search for new sources of natural vanilla flavourings.”

Melanie Legris, Sales and Marketing Manager at Eurovanille

“Other brands weren’t going to do anything until a major player pushed it. With Nestle being the biggest in the world, everyone had to follow.”

“When Nestle announced it would go all natural, that just opened the floodgates,”

Observes John Leffingwell, Head of Flavour and Fragrance Market Research firm, Leffingwell and Associates.

“The amount of all the vanilla beans in the world is not sufficient to flavour everything that everyone wants to flavour with vanilla. No other food product gets that level of government oversight.”

Carol McBride, US Vanilla Category Manager at Symrise. (Symrise is one of the world’s suppliers of essence, flavours and ingredients).


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“That is exerting more upward pressure on prices given large food companies including Nestle and Hershey have said they will use natural flavourings. This has led to a hurried search for new sources of natural vanilla flavourings.”

Emiko Terazono, Financial Times

“In 2016 as more food and beverage companies move toward natural ingredients and ‘clean’ labels…. for example, Nestle SA in February 2015 said it planned to remove artificial flavours and FDA certified colours from all of its chocolate candy products. Other companies such as General Foods, Inc and The Kellogg Co have followed with their own plans to remove such ingredients.”

Jeff Gelski, Food Business


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Origin, History and Uses of VanillaVanilla was introduced to Fiji in 1881 and was planted around Suva. Interest in the cultivation of vanilla in Fiji has increased in the last 30 years.

Indeed, at a recent meeting of the South Pacific Commission it has promoted vanilla as a key crop for Fiji and as having a very promising future.

Vanilla is the only edible fruit of the orchid family. It is a tropical orchid and there are more than 150 varieties of vanilla, though only three types - Bourbon, Planifolia and Tahitian - are used commercially.

Vanilla planifolia (also known as fragrans) forms the basis of our project. It traditionally grew wild on the Atlantic Gulf side of Mexico. The Totonaca people of the Gulf coast of Mexico were probably the first people to domesticate vanilla. They continue to cultivate the fruit that they consider was given to them by the gods. Vanilla is a sacred and very important part of their culture and their lives.

Vanilla first left Mexico in the early 1500s on ships bound for Spain. It was valued as a perfume and flavour.

Vanilla is the world’s most labour intensive agricultural crop, which is one reason why it is so expensive. The fruits, which resemble large green beans, must remain on the vine for nine months in order to completely develop their signature aroma. However, when the beans are harvested, they are still partially green and therefore have neither flavour nor fragrance. They develop three distinctive properties during the curing and drying process.

When the beans are harvested, they can be sun dried or treated with hot water or heat and are then placed in the sun every day for weeks to months until they have shrunk to 20% of their original size. After this process is complete, the beans are sorted for size and quality. Then they will “rest” for a month or two to finish developing their full flavour and fragrance. By the time they are shipped around the world, their aroma is intense.

The United States is the world’s largest consumer of vanilla, followed by Europe - especially France.

Vanilla is not only used as a flavour in foods and beverages, but also in perfumes. It is also used in many industrial applications such as a flavouring for medicines and as a fragrance to conceal the strong smell of rubber tyres, paint and cleaning products.

The dairy industry uses a large percentage of the world’s vanilla in ice creams (the largest manufacturers are Unilever and Nestle), yoghurt (fresh and frozen) and other flavoured dairy products. The French company, Danone, is a large worldwide user.


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FOUR COMMERCIAL IMPERATIVES TO INVEST

1. Demand exceeds supplyAs Symrise, a substantial International Flavour and Fragrance Global Entity, notes:

“Demand continues to grow…the demand deficit needs cultivation in new regions.”

Unsatisfied demand is substantial. As some commentators have put it:

“For the last several years supply of vanilla is down - way down.”

As a result,

“The consumers demand for ‘all natural’ is driving demand and prices.”

2. Vanilla is the second most valuable spice in the world

Currently selling at US$250 per kilo at source for Grade A-1 beans.

3. A high return on investmentRefer to Investment Project Summary & Indicative Investor Returns on page 19.

4. Big Food seeks to diversify supply sourceBig Food and it’s international flavouring and fragrance partners are seeking to diversify their sources of supply for Vanilla. At the moment they are strategically vulnerable.

At the present time, 80% of the Vanilla comes from Madagascar. With the growing demand for Vanilla worldwide, particularly with China and Brazil recently becoming large consumers, concerns about the security and concentration of supply are coming into sharp focus for Big Food and their IFF partners.


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1. Investment SummaryThis Information Memorandum offers the opportunity to invest in the Vanilla Investment Project to be established in Fiji on the main island of Viti Levu where the Vanilla Manager has determined is suitable for the commercial production of vanilla gardens.

Investors in the Vanilla Project will be granted a Vanilla Investor Agreement and will be issued with a Certificate evidencing that the Vanilla Investor Agreement has been entered into.

A summary of the terms of the investment n the Vanilla Project are set out in Section 2 Key Features (page 21). Further detailed information on the investments is contained in the remainder of this Information Memorandum, as well as the Snapshot document.

Investment Project Summary and

Indicative Investor Returns for One Garden

SUBSCRIPTION FEE PER GARDENFOR UP TO A 10 YEAR PERIOD US $ 3,100

PROJECTED YIELD DATA

Harvest Years Year 4 up to Year 10 annually*

Vanilla Planifolia 100%

Cured Beans per vine 3 kgs

Current World Price at source per kg US$250/kg

Our prudential (discounted by 20%)Price at source per kg

Year 3 to 10US$200/kg

Indicative Net Returns Year 4 up to Year 10 58%

Vines per plantation managed for life of project 6 vines**

Acres under cultivation 25 acres


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*SUMMARY OF COMPARABLE CROPPING TIMES

CROP FIRST HARVEST

Sandalwood 10 to 15 years

Truffles 5 years on average

Avocadoes 4-5 years

Macadamias 6-7 years

Table Grapes 3 years but variable depending upon a number of environmental factors

Wine Grapes Usually by the Year 3

Forestry 10 years+, a once off crop

**The care of the vanilla plantation includes all of the horticultural needs for a garden including but not limited to the following: the selection of stock, planting, tending, mulching, looping, flower initiation, pollination (by hand), thinning, harvesting, curing, ageing and selling of same at best price.

NOTES

(i) Unlike other agricultural products, the “Green Gold” as Vanilla is known as, is not listed on any exchange. The bulk of production is sold to Big Food and the IFF group. For our Information Memorandum we have allowed for an estimate of US$250 being for Grade A-1 beans at source.

(ii) For current “at source” price we have used US$250 per kilo for Grade A-1 beans for our benchmark pricing is US $200 (a 20% discount). Our provision of US$200 is prudent and takes into account future natural, economic or logistical phenomena. These provisions are also consistent with our normal agricultural budgeting practices.

(iii) Grade A-1 beans are the highest quality. There are several other (lower) grades of bean.

(iv) Our Grade A-1 beans will not be blended with lower grades. Blending with lower grades allows for a lower price per kilo to be charged. This practice is being done at the moment in culinary and baking markets.

(v) You may acquire up to 300 vanilla gardens and more by agreement.

(vi) In some seasons not all vanilla vines flower. Our enquiries in India, Uganda and PNG indicate that this phenomena is quite common and up to 25%. An adjustment has been made in our indicative financials to that effect. It is a further example of our conservative provisioning.


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2. Key Features of the Vanilla Bean Project

VANILLA PROJECT

WHAT IS THE STRUCTURE OF THE PROJECT?

Each grower enters into a Vanilla Investor Agreement under which they contract with the Vanilla Manager to establish a vanilla plantation and carry on the future management and maintenance of their plantation until the end of the fruiting period of up to 8 to 10 years.

WHAT IS THE INVESTMENT BEING OFFERED?

The Vanilla Project (the “Vanilla Project”) has been established to provide investors the opportunity to participate in a business of commercially growing vanilla gardens in Fiji. It is expected to produce vanilla beans to be sold for use in Big Food, Nestle, Unilever, Danone, Mars, Hershey and McCormick etc. There are some 1800 uses for vanilla according to Symrise.

The unit of investment of the Vanilla Project is a vanilla garden. A vanilla garden comprises an area of 6 vines. Whilst all investors will be entitled to the net profits of their plantation, the Vanilla Project will be established and maintained by the Vanilla Manager on a collective basis and after establishment of growth the beans will be harvested annually and sold on a pooled basis and Net Proceeds of Sale distributed. It is the Vanilla Manager that undertakes the responsibilities of conducting the business at its cost as explained elsewhere in the Information Memorandum

WHO IS THE VANILLA MANAGER?

The Vanilla Manager is Vanilla Plantations Fiji Pte Limited (“VP”). The management team has considerable experience in the acquisition, establishment and management of significant agricultural endeavours.

The team possesses the key building blocks for successful long term Vanilla Plantation Project management and development including:

• sound agricultural management capabilities• proven capacity to source high quality land;• management expertise to establish and manage the vanilla gardens according to industry best

practices;• financial strength and resources to allow the adoption of best horticultural practices; and• superior sales and marketing resources.

HOW LONG IS THE INVESTMENT?

The Vanilla Project is expected to run for a term of up to approximately 10 years from the commencement date. The vanilla bean gardens will be harvested each year between 3 and up to 10 years after establishment.

WHAT ARE THE FEES AND EXPENSES?

Your investment will be fully self-funding once the vanilla garden is acquired by you. All costs will be met from the proceeds of successive crops. The team has successfully adopted the same strategy in many large agricultural projects in Australia.


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VANILLA PROJECT

WHAT ARE THE MAIN RISKS?

Participation in the Vanilla Investment Project is intended to be of a medium to long term nature in commercial horticulture and is therefore subject to attendant agricultural risks and should be considered as speculative for several reasons.

The Vanilla Manager considers the key risks to be:

• Weather extremes: Weather extremes can have detrimental effects on growth. Perhaps the largest environmental risk is over rainfall (i.e. inundation conditions) which can reduce growth rates and yields and in extreme conditions can cause vine death. One of the other major weather risks are cyclones. The vanilla gardens may be damaged or destroyed by wind from a cyclonic event. Should such an event occur, this may materially impact returns to investors. Proven strategies are in place to mitigate such events.

• Failure to achieve expected yield: Vanilla gardens productivity will dictate the volumes to be achieved from harvesting, which will significantly impact on the returns ultimately achieved. Garden productivity can be affected dramatically by rainfall conditions, soil types, diseases and pests. If garden productivity is less than anticipated, returns to investors from the Vanilla Project will be affected.

• Increased costs and failure to achieve economic prices: Predicting the prices of vanilla to be exported from 3-10 years time is difficult. The eventual price achieved will depend on a range of factors, largely outside the control of the Vanilla Manager. The net return from the Vanilla Project is also dependent on the costs of harvesting, cultivation, hand pollination, sweating, curing and the world market. There is a risk that returns to investors could be affected by significant increases in current costs.

• Another pandemic such as Covid-19.

ARE THERE ANY AGRICULTURAL INCENTIVES AVAILABLE?

Yes and they are generous. Under the Fijian Tax and Customs Incentive Scheme any new activity in commercial agricultural farming, approved, can enjoy up to 13 years Fijian tax holiday - well in excess of the 8 to 10 years that the investors require. There is also a VAT holiday (9%). This means all income is tax free for the life of the Project. These tax savings will be passed onto investors in the form of a higher distribution.

MARKET DYNAMICS OF VANILLA & VANILLA BEAN SUPPLY

For some years now the global vanilla market has been undergoing very sharp and important changes. These can be best seen in the selected quotes that we have provided in both the Snapshot document and this Information Memorandum. There are several reasons why industry commentators have called it “vanilla fever”.

There are many reasons set out throughout this document for why there is a worldwide shortage. As the respected magazine, The Economist, quips, “there is a reason why your favorite ice cream may be costing a bit more”. Thanks to the rapidly growing Chinese demand and western consumers insisting on natural flavors the world seems to have developed an insatiable appetite for this fragrance spice.

One consequence of this demand has been that Madagascan farmers have been harvesting the crops before the beans are quite ripe. This means that the production of cured beans has fallen in quality and volume. Rising prices have also made small farmers in Madagascar harvest early to minimize theft.


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VANILLA PROJECT

These vanilla growers are now referred to in Madagascar as “Vanillaires”.

Madagascar has now legislated against the dealing in unripened vanilla beans (“vrac”).

VANILLA WORLDWIDE USAGE

Madagascar is the largest producer of vanilla (United Nations FAO).

Its nearest competitor is Indonesia.

Under the present conditions for growing, existing regions do not have the capacity to pick up the shortfall. This presents an ideal opportunity for Fiji.

As Director of a Canadian based vanilla importing company, Mr David van der Walde of Aust &Hachmann Canada, a company which is affiliated with the oldest vanilla importer in the world says,

“Nestle, Unilever and General Foods are the three companies that control about 80% of the products on our supermarket shelves (North America) decided they wanted their mainstream products to feature natural products and ingredients in place of artificial labeling. It was almost a perfect storm to create an environment for higher prices.”

Through one of the Director’s contacts with Big Foods and IFFs, the project has a unique opportunity to supply vanilla bean having undertaken to meet all International Standards. A very important attribute which has been adopted in the past.

Big Food, flavoring and food companies have started a trend towards pure, natural and artisanal ingredients. Others are now following.

Other reasons for pressure on prices include hoarding by dealers in the hope of further price increases and also trading in unripened green beans. Madagascan farming traders have been doing this for some years.

All of these factors have driven the increasing pressure on supply resulting in pricing increases. Vanilla bean prices continue to rise. It is now in the order of US$250 per kilo at source for Grade A-1 beans.

One respected global flavoring company has noted:

“The large scale demand from big food manufacturers and grocery chains has increased sharply as the food industry shifts towards pure, natural and artisanal (traditional food and drink) ingredients.”

Nestle, as one example, has gone to “all natural flavours”.

“Growing consumer expectations for pure and all-natural foods and ingredients have spurred global food manufacturers to embrace the use of pure vanilla in recent years, which has driven up global demand dramatically and resulted in massive price hikes….” Craig Nielsen, Nielsen-Massey VP of Sustainability

A growing imbalance between supply and demand is apparent and is unlikely to abate quickly.

The whole vanilla sector is aware of the global market price for vanilla. The rush to reduce the number of intermediaries is quickly taking place. Wholesalers and traders are facing stiff competition whilst large users, multinational American, Swiss or German companies, are looking to acquire closer contacts with their source suppliers/growers. This means the opportunity arises for direct selling to end users at higher prices. Direct selling is an important part of our business plan and a strategy successfully used in our previous agricultural projects.


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As the BBC recently noted, the rocketing price for vanilla can also be put down to food rules in Europe and the United States. The label “Vanilla” can only be used when the product contains 100% natural vanilla.

If the flavor comes in part from artificial sources the packaging must say “vanilla flavor” or “artificial vanilla”.

The US Federal Drug Administration (FDA) has regulations as to the percentage of Grade A beans in vanilla extract. Vanilla extract is largely made up of Grade B or lower grades.

Over the last few years the theft of vanilla beans by thieves in Madagascar due to scarcity has led farmers to harvest their beans before they are ready to prevent theft leading to lower quality results.

There are three principal grades of vanilla beans. The major variations between grades of vanilla beans stem from three key factors - vanillin content, moisture content and appearance.

The principal grades are:

1. Grade A-1: These beans are dark and pliable with the moisture content between 30 to 35%. This grading is the most sought after.

2. Grade A-2: These beans have a similar coloration of Grade A-1 with the moisture content being between 25 to 30%.

3. Grade B: These extract grade beans are still aromatic but drier with the moisture content of 15 to 24%.

TRUTH IN LABELLING

There is now a unique opportunity to invest in vanilla. At the present time this pricing is approximately US$250 per kilo at source for Grade A-1.

80% of the world’s supply of vanilla is grown in Madagascar, a third world country off the coast of Africa where approximately 8000 small scale farmers have a plantation size of up to 350 vanilla vines.

This makes production and the consistency of quality in vanilla beans very challenging. There is scant capital for farmers to borrow in order to improve farming and production practices. A lot are squatters in national parks. As a result, vanilla bean quality is variable. Any capital accumulated is often spent largely on cars and houses.

Our planting areas for this project is 65,000 vines.

It is the industrial food market that we will be targeting - our budgets are prepared on the basis of the industrial users (Big Food and IFF entities). One of our past European clients remarked “the project enables people to invest in vanilla farming without owning a farm.”

In short, we have the expertise to produce consistent quality beans, single plantation based with the ability to engage directly with the Big Food users and IFF directly.

OUR VANILLA MARKETING STRATEGY


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VANILLA SCARCITY ISSUE - WHAT IS HAPPENING IN THE VANILLA MARKET WORLD?

There has been a consistent increase in the price of vanilla over the last 10 years. Why? This is largely due to the large multinational food and fragrance markets - Nestle, Hershey, Danone, Pepsi Cola and Unilever.

These users and traders have corralled and otherwise tied up substantial important vanilla growingareas.

It has become common to attribute or blame price rises to shortages as a result of cyclonic or other adverse weather events. In fact, such events have always occurred regularly across the tropics, which is where vanilla grows.

There is a lively demand for vanilla beans coupled with a relative flat production regime. The result being price increases.

Prices for vanilla, which is not traded on any exchange, have already surged over the past year thanks to speculative hoarding and rising demand as more consumers shun artificial flavourings and ingredients as well as China and Brazil consuming more vanilla.

“The biggest issue will be quantity,” said Melanie Legris, sales and marketing manager at Eurovanille. “that is exerting more upward pressure on prices given large food companies including Nestle and Hershey have said they will use natural flavourings. This has led to a hurried search for new sources of natural vanilla flavourings.”

Liz Castello-Mechael, Corporate Communications Director for Nestle stated, “Nestle along with other multinationals are removing artificial additives from their products. From 2012 Nestle has engaged in a seven year research and development program which has led to more than 80 artificial ingredients being replaced with alternatives.”

“The amount of all the vanilla beans in the world is not sufficient to flavour everything that everyone wants to flavour with vanilla.”

Says Carol McBride, US Vanilla Category Manager at Symrise. (Symrise is one of the world’s suppliers of essence, flavours and ingredients)

VANILLA PROJECT


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3. The Vanilla Investment Project

The OfferTo carry on commercially growing vanilla vines on land where the Vanilla Manager determines it to be suitable for the commercial production of vanilla beans.

This will occur on the island of Viti Levu - the largest island in the Fiji Islands group.

Structure of the ProjectThis project aims to capitalise on current worldwide vanilla bean scarcity. Once the Vanilla Manager has accepted an application, the Vanilla Manager enters into a Vanilla Investor Agreement with the applicant under which the applicant contracts with the Investor Manager to establish and maintain his/her plantation. Under this Agreement, the investors will be granted one or more of the vanilla gardens of the applicants’ entitlement. The Vanilla Manager will sell the cured beans from the plantations for the best available price.

Acceptance of ApplicationsThe acceptance of applications for the project is the sole province of the Vanilla Manager to accept or reject any application at its own discretion.

Group StructureThe Group will also be a member of Fair Trade and Transparency International.

Why Fiji?• Fiji has a competitive horticultural advantage with a sound supply of surface water

and additionally, artesian water.

• The soil, climate and “terroir” in Fiji is ideal.

• Moody’s, the International Risk Rating Agency, has re-rated Fiji country risk from B1 up to B1+.

• Fiji has very stable political and financial environments. Fiji has a first world infrastructure.

• Labour costs, which are crucial for this crop, are very competitive with other vanilla bean production regions. Employee loyalty with a very low turnover. 94% of the population speak English and literacy is high.

• The area contains beautiful inland rainforests and mountain peaks.


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How does the Vanilla Bean Project work?This offer relates to vanilla gardens of at least 6 vines at a cost of US$3,100. Each Application must be for a minimum of one vanilla garden. The Vanilla Manager does not in any way guarantee Applications will be accepted and has the right to accept or reject an Application in its sole discretion.

Once the Vanilla Manager has accepted an Application, it will enter into a Vanilla Investor Agreement with the Applicant under which the Applicant contracts with the Vanilla Manager to establish and maintain the garden from the commencement date up to ten years or until it is no long commercial, whichever first occurs and under which a Vanilla Investor Agreement will be granted over one or more vanilla gardens on which the Vanilla Project will be established.

The Vanilla Investor Agreement will be issued promptly to investors.

What happens after the Vanilla Investor Agreement is entered into?The Application Price is paid to the Vanilla Manager for the establishment, management and maintenance carried out under each Vanilla Investor Agreement for the relevant period (“Establishment Services”). The relevant period for the Vanilla Project commences from the date after execution of the Vanilla Investor Agreement (“Commencement Date”). Pursuant to the Vanilla Investor Agreement, the Vanilla Manager may determine the most appropriate time to carry out the Establishment Services.

After completion of the Establishment Services, the Vanilla Manager is solely responsible for the costs of maintenance and for management of the ongoing Vanilla Project.

The investor has no further financial obligations to contribute to the management or maintenance of the vanilla garden.

Your investment is solely self-funded.In other words, once your vanilla garden is acquired, future costs and expenses will be met from the vanilla garden harvest proceeds.

What will the indicative yields of vanilla bean be?The result of a vanilla harvest is largely determined by the level of the soil fertility, its cultivation, fertilisation, weather and the plant’s variety. The optimum result of vanilla, or vanilla planifolia type, with a good cultivation technique is 3kg of cured beans per vine.

Our group has had extensive interests in intensive agriculture and recognises the risks in yields and in selling prices.


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Accordingly, we have risk weighted vanilla from US$250+/kg to US$200/kg for our budgets.

This discount, we believe, is prudent for agricultural investments. (Please note that our kg yields are based on FAO, UNO instrumentality.)

Application of Vanilla FundsYour funds will be placed in the Vanilla Manager’s separate Trust Account until such time as the Vanilla Investor Agreement is signed by Vanilla Manager.

Thereafter, the funds will be released to the Vanilla Manager.

When will my vanilla garden be established?The vanilla plantation will be established within 13 months of the issue of the Vanilla Investor Agreement.

Will my vanilla garden be separately identifiable?Yes, each investor will be granted an investor interest over one or more vanilla gardens on which the Vanilla Project will be established. All investors will be granted a separate vanilla garden, the Vanilla Project will be established and maintained by the Vanilla Manager on a collective basis and the vanilla beans will be harvested and sold on a pooled basis and Net Proceeds of Sale distributed.

Can I sell or transfer my vanilla garden prior to the termination of the project?Yes, subject to the Vanilla Manager’s right of first refusal, investors are able to sell or transfer gardens at any time if they have a willing buyer.

All sales and transfers, except transfers to Associates, relatives or the trustee of a superannuation fund of which the investor is a member or upon death, divorce or disability, are subject to the Vanilla Manager’s right of first refusal to purchase the plantations. If applicable, the investor wishing to transfer some or all of its gardens, must serve a written notice to that effect on the Vanilla Manager setting out the sale price and other information and the Vanilla Manager may then exercise his right to purchase within 30 days.

A transfer fee of FJ$100 plus VAT will apply on all transfers.

Vanilla Bean Production patternThe production pattern of vanilla plants can vary from year to year. The optimum cropping years are those from 3 to 4 years from first harvest. After that production will continue to decrease. The project ends at 10 years or earlier if the cropping becomes uncommercial.


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Is there a vanilla plant stocking guarantee?Yes. The Vanilla Manager guarantees that 12 months after the vines have been established, a minimum of 85% of the original number of vines established in the Vanilla Project will remain or be replanted at no cost to the affected investors.

The guaranteed stocking rate does not cover damage by major climatic events.

What does the Independent Horticulturist do?An Independent Horticulturalist will inspect the Vanilla Plantations over the life of the Vanilla Project. The Independent Horticulturalist will inspect all gardens as soon as practicable after they have been established for 12 months and thereafter will inspect at least one third of all plantations annually, such that all gardens are inspected on a three year rolling period. Following inspection, the Independent Horticulturalist will prepare an annual report to the Vanilla Manager one year after the first report, which will give details of any significant changes in the Vanilla Manager’s policy relating to horticultural activities and whether the Vanilla Manager has carried out Services under the Vanilla Investor Agreement in a proper and efficient manner.

In addition, to the inspection and reporting role, the Independent Horticulturalist also confirms the adequacy of stocking levels 12 months after establishment and provides other advice and assistance as required.

Can the Vanilla Project contribute to carbon neutrality in Fiji?Fiji Vanilla proposes that once the Vanilla Gardens have become productive it will determine whether the project can operate in a carbon neutral way with associated premiums.

Costa Rica leads the way in this endeavour for that country’s coffee. We can do the same for vanilla.

Application Monies to be held on TrustUntil the Vanilla Manager executes the Vanilla Investor Agreement on its own behalf and as attorney of the investor, the Vanilla Manager will hold all the Application monies which relate to the Vanilla Investor Agreement in a separate designated account.

When will the vanilla beans be harvested and sold?The vanilla beans will be harvested about 8 months after pollination each year from the 3rd year and for up to 10 years from the date of establishment (the commencement date) of each garden.

The Vanilla Manager will arrange for the manual harvest from the investor plantations. This exercise commences with hand pollination of the vanilla flower blooms.


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Investors will receive their proportionate share of the net proceeds from the sale of the vanilla (i.e. gross proceeds less all relevant costs) from the Vanilla Project as arranged by the Vanilla Manager. In this case, the returns from the Vanilla Project are averaged over the Vanilla Project. Given the expected time periods over which each harvesting event may occur, it is likely that a number of distributions of proceeds may occur within each year.

The investors irrevocably appoint and for valuable consideration the Vanilla Manager as the investors agent to negotiate and make sales of the investors project produce at the maximum practicable price available (having regard to relevant factors such as marketable volumes, terms of contract), including entering into a sale agreement with a purchaser on such terms and conditions as the Vanilla Manager considers appropriate.

Vanilla Bean - Yields and Anticipated ReturnsVanilla’s current world vanilla bean price is up to US$250/kg for Garde A-1 cured beans at the plantation gate (at source).

As experienced agriculturalists, we have based all our financial projections on other farming enterprises on a plantation at source price of US$200/kg for cured beans, a prudent agricultural allowance.

The prevailing price is US$250/kg.

This 20% discount or allowance is made to our projections to take into account many factors that may affect the production of any agricultural product. In this case, the discount or allowance includes spillage, shipping loss, pests, inclement weather, theft, spoilage or the market. The directors believe that this allowance is good judgement for an agricultural product and in line with our past experience.

The vanilla plantation will comprise of up to 65,000 plants. The optimum result is that a vanilla garden of 6 vines will yield 3kgs per vine of cured beans per year after the end of Year 3.


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VANILLA BEAN PRICES - US$ PER KG AS NOTED AT MARCH 2021The price of vanilla has soared as its use in ice cream, chocolate, perfume and soft drinks has risen. According to the US Vanilla and Flavouring Group, Nielsen Massey, prices for vanilla had already surged over the past year thanks to the rising demand as more consumers shun artificial ingredients and flavouring.

Vanilla Bean Scarcity

Price surged after several years of small Madagascar harvests eroded global supply, while demand by Big Food increased.

INVESTMENT PROJECT SUMMARY AND INDICATIVE INVESTOR RETURNS FOR ONE GARDEN

SUBSCRIPTION FEE PER GARDEN FOR UP TO A 10 YEAR PERIOD

PROJECTED YIELD DATAUS $3,100

Harvest Years Year 4 up to Year 10 annually*

Vanilla Planifolia 100%

Cured Beans per vine 3 kgs

Current World Price (at source) per kg US$250/kg

Our prudential (discounted by 20%)Price at source per kg

Year 3 to 10US$200/kg

Indicative Net Returns Year 4 up to Year 10 58%

Vines per garden managed for life of project 6 vines**

Acres under cultivation 25 acres

*SUMMARY OF COMPARABLE CROPPING TIMES

CROP FIRST HARVEST

Sandalwood 10 to 15 years

Truffles 5 years on average

Avocadoes 4-5 years

Macadamias 6-7 years

Table Grapes 3 years but variable depending upon a number of environmental factors

Wine Grapes Usually by the Year 3

Forestry 10 years+, a once off crop

Vanilla 3 years


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**The care of the vanilla garden includes all of the horticultural needs for a garden including but not limited to the following: the selection of stock, planting, tending, mulching, looping, flower initiation, pollination (by hand), thinning, harvesting, curing, ageing and selling of same at best price.

NOTES

(i) Unlike other agricultural products, the “Green Gold” as Vanilla is known as, is not listed on any exchange. The bulk of production is sold to Big Food and the IFF group. For our Information Memorandum we have allowed for an estimate of US$250 being for Grade A-1 beans at source.

(ii) For current “at source” price we have used US$250 per kilo for Grade A-1 beans for our benchmark pricing is US $200 (a 20% discount). Our provision of US$200 is prudent and takes into account future natural, economic or logistical phenomena. These provisions are also consistent with our normal agricultural budgeting practices.

(iii) Grade A-1 beans are the highest quality. There are several other (lower) grades of bean.

(iv) Our Grade A-1 beans will not be blended with lower grades. Blending with lower grades allows for a lower price per kilo to be charged. This practice is being done at the moment in culinary and baking markets.

(v) You may acquire up to 300 vanilla gardens and more by agreement.

(vi) In some seasons not all vanilla vines flower. Our enquiries in India, Uganda and PNG indicate that this phenomena is quite common and up to 25%. An adjustment has been made in our indicative financials to that effect. It is a further example of our conservative provisioning.

INDICATIVE INCOME AND EXPENDITUREVanilla US$200/kg has been prudentially allowed

Net Income (58%)

Vanilla Management (10.0%)

Cost of Production (40.0%)

Land Fee (3.5%)

International Sales & Marketing (5.5%)


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How will vanilla returns be calculated?In general terms, the return will be based on:

(a) Volumes produced at harvest (multiplying by US$ per kilo).

(b) Production costs (calculated as the prevailing costs per kilo).

Factors such as inflation rates, exchange fluctuations, whether the international market and price movements need to be taken into account, determine prevailing prices and costs at the time of sale.

How will investors be kept informed?Investors will be kept up to date with developments in the Vanilla Project through such means as the Independent Horticulturalist Report, regular newsletters, seminars, the website and general correspondence. Any relevant information including developments in marketing or the market itself will be communicated to investors.

Land securedLand to be used in the Project has been physically assessed by a horticulturalist and the Department of Agriculture, Fiji as being suitable for the establishment of the vanilla plantations.

The land (40 acres) has been secured and is located in the western division of the main island of Fiji - Viti Levu.

There is access to 3 phase electricity. The plantation has access to both surface water and artesian water. The artesian water will be drawn from the same aquifer that a popular international brand of mineral water is drawn.

Importantly, the plantation is protected from cyclonic events by the presence of high hills situated along the plantation’s south east boundaries. The presence of these hills will dissipate the force of any cyclonic conditions.

The soil is slightly acidic leading to a favourable pH which is very beneficial for the cultivation of vanilla.

Multinationals are looking for alternative guaranteed secured long term supply of benchmark vanilla beans.

Sustainable agricultural practicesThe Chairman’s agribusiness properties in Australia gave priority to sustainable agricultural and agribusiness practices. The use of chemicals was reduced by over 85% and one property also hosted a kangaroo population of over 2000 and some 350+ “Eastern Race” emus.

The same approach to sustainable cultivation will be implemented in this project. Our aim will be to increase both the sustainable cultivation practices of vanilla bean in Fiji and to address worldwide vanilla bean scarcity in a responsible way.


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4. Independent Horticulturist’s Report

January 2021

The Directors Vanilla Plantations Fiji Pte Ltd C/- Cromptons Barristers and Solicitors QBE Insurance Centre Victoria Parade Suva FIJI

Dear Directors

INDEPENDENT HORTICULTURIST’S REPORT: VANILLA BEAN CULTIVATION

Introduction

This report is for inclusion in the Vanilla Plantations Fiji Pte Ltd Project Information Memorandum.

Mr Shalendra Prasad will act as the Independent Horticulturist for all plantation projects managed by the Vanilla Manager on normal commercial rates and terms.

His background is as a Senior Horticulturist engaged with the Ministry of Agriculture, Fiji working as a Principal Research Officer. He has a Bachelors Degree in Agriculture and a Masters Degree of Science in Horticulture. He has 23 years of experience working in Fiji’s Horticulture industry. He is also the current President of the Fiji Institute of Agricultural Science.

The sites

The Vanilla Manager has selected the proposed plantation site. This report covers the general location for the proposed plantation site selected by the Vanilla Manager.

Yours sincerely

S. PRASAD Principal Research Officer (Fiji) Ministry of Agriculture (Fiji) FIJI ISLANDS


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Origin of VanillaVanilla is native to Mexico and its use was first mentioned by Hernan Cortez and his followers who came to the country in the 16th century. They discovered that the Aztec Indians were using vanilla for flavouring chocolate. It was a product of green beans/pods collected from the forest when matured and dried. Vanilla was not cultivated until the discovery of a method to pollinate the flower which technique was discovered by Edmond Albus in 1841 (Theodose R. 1973).

Vanilla BotanyVanilla is a tropical climbing orchid which belongs to the family Orchidaceae. It is fleshy, herbaceous perennial vine measuring 1cm to 2cm in diameter, which clings to supporting trees by means of adventitious roots while the base roots ramify in the humus or mulch rich surface soil. The roots are long aerial whitish in colour about 2mm in diameter and are produced opposite the leaves.

Over 50 species have been described, Ames (124) and J. Purseglove (1981). However, only three of these varieties are grown commercially. Vanilla fragrans (V. planifolia) is most important commercially. The stem is simple or branched with internodes measuring 5cm to 15cm in length and produce opposite leaves of 8cm to 25cm in length and 8cm wide.

It produces 2 or more flowers per bunch at leaf axils. The flowers are borne in a spike or raceme. They are large waxy fragrant, pale greenish yellow about 10cm in diameter. It has a short pedicel attached to tricarpillary inferior ovary with 3 sepals and 3 petals. The two upper petals resemble as the sepals while the lower petal is modified as a trumpet shaped labellum or lip. The male and female flower parts are long hairy on the inner surface. The sticky stigma (female part) is separated from the stamen (male part) by a thin flap like rostellum that prevents self-pollination. Flowers when pollinated produce fruits known as beans. They are three angled capsules narrowly cylindrical 8cm to 25cm long. The beans contain ripe myriads of minute globose seeds of about 0.33mm in diameter.

VarietiesVanilla fragrans (Vanilla planifolia) is the dominant species, indigenous to Mexico, West Indies and Central America and is grown commercially. It is widely cultivated throughout the tropics. Correll (1944) describes this as a coarse vine that climbs to the top of tall trees. Stems are simple or branched, produces opposite leaves which are succulent, nearly sessile, oblong elliptic to narrowly lamellate 9cm to 23 m long and 2cm to 8cm wide. The stem produces 20 or more flowers per bunch, which are greenish yellow in color. The flowers are composed of three sepals, three petals and a central organ known as the column (united stamen and pistil) or rostellum. It flowers in the third year after planting and require longer dry weather for flower initiation. Plants are more vigorous and the beans contain high vanillin content.

The Vanilla Plantation Project will be comprised solely of the vanilla species vanilla planifolia.

Vanilla tahitensis - This species is indigenous to Tahiti, and is cultivated in Hawaii. The stems are more slender, while leaves are narrow and the flower perianth segmented.


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Pods are short, reddish brown, 12cm to 14cm and 9mm wide, broad in the middle and tapper towards the end. The plant is less vigorous, comes into production in the second year after planting. It requires shorter dry period for flower initiation. The vanillin content is low thus less demand.

Vanilla pompon – this variety is indigenous to Central America, Trinidad and Southern Mexico. It tolerates more adverse moisture and soil conditions. It appears to be resistant to root disease. The vine forms flowers in 1 to 2 years after planting. Leaves are large 15 to 28cm long and 4 to 11.5cm wide. Flowers are greenish yellow in colour and more fleshy. Beans are triangular, more fleshy and thick, 15cm to 18cm long and 2.5cm to 3.3cm in diameter. Beans produced are of inferior quality with no tendency to split at maturity. Generally used in tobacco, soap and medicine.

Producing countriesThe main producing countries of Vanilla are Madagascar, Indonesia, Comoros, Uganda, India, Papua New Guinea, Mexico, China, French Polynesia, Tonga, Jamaica, Reunion Island, Mauritius, Mayotte, Costa Rica, Vanuatu, and soon Fiji. The average world production in good years is below 2,800 tonnes dry beans while in bad years this comes down to around 1200 tonnes of dry beans.

Most of the small Fijian crop (up to 7 tonnes) is sold in Australia, New Zealand and the USA.

Vanilla in Pacific - a long historyVanilla was introduced to Fiji in 1886. After much investigation vanilla programs were initiated in Fiji and a couple of years before this time in Solomon Islands (AACM 1983; Green 1985). Tonga has been developing the crop since 1960’s while Western Samoa took up a small commercial production in early 1990 (Grant Vinning 1992). In Tahiti, Vanilla tahitiensis variety was introduced from Central America, via the Philippines, in 1984.

Tahiti was the world’s largest producer around 1908-1909 while between 1920 and 1950 the country export averaged 200 tonnes. However, export declined in mid1960. Moreover, Correll (1953) showed that decline occurred at a time of rigid government control to maintain product quality.

Vanilla in FijiVanilla was introduced in Fiji around 1886 and was established in many areas (Parham J.W. 1972). Samples of cured beans, prepared by Mr. Leslie E. Brown of Suva, were sent to London by J.B. Thurston in 1891. This received favourable report. In the same report, it is noted that around 1950 the enthusiasm of Mr. W.J. Erich of Deuba saw the revival of Vanilla growing in Fiji.

Vanilla could be successfully re-established as a commercial crop, it has spread well across the country.

Many prominent individuals or groups are associated with this crop and have contributed to the establishment of vanilla as an industrial crop. They are Dr. Ronald


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Gatty of Spices Fiji Ltd, Mr. Liam Cooper of Australia, Dr. Mc Gregor of Koko Siga, Mr. and Mrs. Hugh Thaggard of Savusavu, Waikava Organic Producer association and Mr. Ram Naidu.

Current ProductionThe current production shows that up to 7000 kgs of cured vanilla beans were produced in Fiji in 2018. Increasing government and investment efforts are currently being directed to produce a prosperous crop to take advantage of the world market opportunities that now exist.

Managerial CapabilityA number of the directors have controlled in excess of 8000 hectares of intensive and broad hectare agricultural undertakings in the Northern Territory and New South Wales, Australia.

These agricultural pursuits range from cattle, table grapes, wine grapes, essential oils, timber, bush foods and biomass.

I consider that the current key management team is experienced and technically competent. The Manager has in place appropriate management structures, management infrastructure, skills and the necessary technology to be capable of undertaking this vanilla project.

Main MarketsThe main markets for vanilla exist in USA, Canada, European Community, other European countries and China. Total average world market production is around 2500 tonnes. Current demand is at least 4,500+ tonnes. Since the vanilla market is expanding with more use of it in the industrial food industry. There is high potential to expand cultivation without affecting price.

Uses of VanillaVanilla is the world’s most popular flavourant for numerous food products, liquors, beverages and perfumes. It is used as flavoring excellence for ice cream, soft drink (especially Coke and Pepsi), teas, chocolates, candy, tobacco, baked foods and pharmaceutical products.

Pricing Dynamics of the World Vanilla TradeIndustry sources advise that in Madagascar the government is now issuing registration documents to vanilla growers to prevent theft (see below). The Madagascan Government has also passed laws to prohibit the use of vacuum packs for the sealing of vanilla beans. This practice encourages premature harvesting of vanilla beans and adversely affects quality.

That Government has recently licensed all vanilla growers and issued them with “carte de planteur de vanilla”. The objective is to prove ownership of the crop and to curb theft.


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These practices reflect the growing value of vanilla pods (beans) which is now worth more than silver to the Madagascan economy and in the international spice market generally. Madagascar is the largest producer.

These vanilla pods are then sold middleman and exporter who resell at substantial mark ups. We are reliably informed that industrial prices are in the order per kilogram of US$250+ for vanilla delivered to Big Food i.e. General Foods, Nestle, Unilever, Coke and Pepsi under long term supply contracts.

According to the Madagascan Department of Agriculture and quoted by Bloomberg, an authoritative financial publication, the world supply was 2500 metric tons of vanilla bean whilst demand is well over 3500 metric tons.

“They (Big Food) have been ill-prepared for a spike in demand thanks to our desire for all things ‘natural’ in food production. As is typical in agriculture, the ability of producers to respond to increased demand in the short run is limited. Continued vine renewal is required as the plants that yield beans need to be replaced on a regular basis. ‘Choosy’ consumers drive a near 1000% spike in vanilla prices.”

Ian Fraser 27 February 2017

“Vanilla is one of the most complex spices in existence. It also carries the title of the most popular spice in the world.”

“Like wine, vanilla is affected by terroir, environmental condition, harvest timing and curing conditions all influence the final flavour.”

Two further reasons for price increasing is interest by consumers is artisanal food i.e. food made in a traditional way.

Multinationals are starting to buy natural vanilla extracts in such quantities as to inject high demand into a limited supply chain. The result is continuous rising prices.

ClimateVanilla, which originated from tropical rain forest at the latitude 25 degrees C North and between it and South of the equator require a warm moist climate with frequent but, not excessive rainfall. It thrives best at temperatures between 20 degrees C to 30 degrees C but can tolerate temperatures up to 35 degrees C and not below 10 degrees C. Since it is a forest plant, it requires between 30% to 50% shade for better growth and production.

Rainfall and Important Water Management TechniquesVanilla requires an annual rainfall between 2000-5000mm distributed well for 10 months for healthy vegetable growth, while 2-month dry period is necessary for flower initiation and pollination. It cannot withstand extended period of dryness or strong


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wind. The best areas for growing vanilla is where annual rainfall is around 2000mm provided the soil is well drained and 2 months dry weather exists to permit flower initiation and bean maturity.

The Project will introduce a two fold irrigation system - drip and spray systems - which will allow for sound water and humidity management.

The land will also be laser levelled by the Manager.

Soil types for VanillaVanilla can grow on any soil, provided it is not too heavy with good drainage and heavy mulch. Vanilla is a surface feeder where roots remain ramified in the 2 to 5cm of the humus rich porous soil. Roots never penetrate the soil and in poor conditions they die off with few hanging roots and a weak plant. Therefore, for good healthy plantation, proper soil condition and heavy mulch is a must with cool conditions at the roots.

The Project Management Team is well versed in mulching. Its Director’s past company was the largest supplier of biomass (compost) in the South Eastern Queensland and Northern NSW nursery market. Over 500,000 cubic metres per annum.

The land will be initially laser levelled to ensure proper drainage.

MulchVanilla is a surface feeder. The roots remain on the topsoil a few millimetres deep. Therefore, mulching is essential to have healthy productive vines. Vanilla grows best in 20 to 30 cm mulch of decaying leaves and grasses. An abundance of mulch is essential for growing a good crop. All pruned materials from pruning of the shade tree and cut grasses can be used as mulch provided it is not fresh. Otherwise, fungal disease can be a problem. Compost, coconut husk, dry grass and leaves, rotten decaying timber can be safely used as mulch.

Looping and trainingVanilla cuttings begin to sprout within 4 to 6 weeks after field establishment. Shoots grow rapidly and should be tied to the support tree or trellis. The vanilla field should be visited at least twice a month and preferably once a week to check on the quantity of mulch and tie the new shoots. When the vanilla shoot reaches the height 1.5 to 1.8 meter it is tied and permitted to drop.

Looping is essential to enable regular renewing of roots and shoots for growth of the plant. It also allows vines to be within reach of pollination. In this way, a vigorous vanilla bush is obtained. Depending on the vigour of the plants normally up to 4 stems are allowed to hang freely to induce flowering of the vanilla plant.

FloweringVanilla normally flowers in the third year after planting. In a good vigorous productive vine, flowers appear once every year. A dry spell of 2 months is necessary to induce flowering besides horticultural practices. Although flowering of vanilla fluctuates with climatic conditions normal flowering season often begins from August to November.


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Peak flowering occurs in September and October. An average flower cluster contains 14 blossoms opening over 25-day period. Usually, one flower opens a day from the appearance of the first inflorescence but it takes approximately 2 months for the first blossom to open.

Flower initiation and ClippingNormally the vanilla plant is stimulated to enhance flower production. Commencing in May usually around 2 to 3 months before flowering, the hanging stems are nipped or removed 20cm from the growing tip. This process will stop growth, slow down the plant sap flow and encourage flowering. Removal of terminal growth 3 months before flowering will encourage new shoot growth. Therefore, one has to be careful in timing the removal of the growing tip. Only good healthy plants should be induced to flower initially and stems selected for flower induction should be from previous growth and not new shoot. It is advisable that when the vanilla vine is not vigorous, leave only 1 or 2 hanging stems otherwise it will weaken the plant, drain food supply and become prone to diseases.

PollinationSince natural pollination in vanilla is rare to non-existent due to the flower anatomy, hand or assisted pollination is necessary to obtain beans. The procedure involved is simple and easily performed with little training but labor intensive.

In vanilla flower, the rostellum, a flap-like structure lies between the male and female part that prevents the pollen (from male part) to flow to the stigma (the female part) to pollinate the flower. It is necessary to lift the flap with a slender piece of wood (tooth pick) or coconut frond and press the anther (male organ) against the surface of the female organ (sticky stigma). Thus, the pollen grains from the anther are smeared on to the sticky surface of the stigma. It is a quick operation for each flower and with little experience one can pollinate 1000 to 1500 flowers in a morning when it is in full bloom.

Since vanilla flowers last for a day only, pollination must be carried out preferably in the morning and before noon when the pollen grains are fully mature, moist and sticky and does not easily fall off. Pollination is done daily throughout the flowering period.

Those flowers that are not pollinated will fall off within a day or two. Pollinated flowers hang downward to produce straight beans. It is advisable to pollinate no more than 12 flowers on each bunch and only 12 bunches per healthy vigorous vines. Over pollination will shorten the productive life of the vanilla plants and even to the extent of killing the vines. When 12 flowers in a cluster have been pollinated, remove other flowers to prevent the tip die back in the cluster.

Thinning of young vanilla beans It is recommended that on an average a good vigorous vine should produce only 100 to 150 beans in a 4 to 5 year plant. It is good practice to have 6 to 8 beans per cluster and 12 clusters per vine while the reminder removed 2 to 4 weeks after pollination. The size of the vanilla beans is determined by the number of beans per cluster and the vigor of the plant. Small, short and deformed beans should be removed about 2 months


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after pollination to allow for better development of healthy beans. Despite careful pollination, a small portion of 5 to 15% pollinated flowers drop before maturity. Vanilla beans develop rapidly full size of about 17 cm long 2 to 3 months after pollination but mature in 9 months.

HarvestingNormally vanilla bean is harvested from around April to August. From pollination to maturity it takes 7 to 9 months, depending on the environmental conditions. The mature beans show signs of slight yellowing at the apex or lower end of the beans. Beans usually become oily on the surface immediately before the apex begin to turn yellow, when mature, each bean is harvested by removing the pod by a sidewise pressure of the thumb against the base of the pod and the forefinger or by using a penknife without damaging the vine. No bean should be collected before ripening since it contains more water, less sugar and starch and produce low quality product. Immature and over matured beans which split have no commercial value. Therefore, it is essential to harvest only mature ripe beans before it splits.

Curing vanilla beansThe process of curing vanilla beans is an enzymatic process (not drying) that must commence within 24 hours after harvest. Failure to do this would continue to ripen and split the bean and lower the quality. The vanilla beans harvested lacks aroma (fragrance) or vanillin. When the vanilla beans mature and ripe, a sugar compound develops inside the beans.

This sugar compound called glucovanillin is converted during processing by enzyme action and transforms (ferments) glucovanillin into glucose (the sticky compound) and vanillin (the aromatic compound). The aroma develops with slow curing that is during fermentation and drying process. The fermentation process develops enzymatic action while the slow drying removes excessive moisture.

This curing process involves four essential phases that directly affect the amount of vanilla and the quality of vanilla beans. Prior to curing, the beans must be sorted out according to their size for proper treatment. There are 4 grades.

Phase 1: Killing or wilting of vanilla beans (Kill the vegetative life for enzymatic activities)

Water killing:

Heat the water to a temperature of 62-64o C. Fill the beans in a drainer with graded size, scale. Let it sit for 3 minutes. Drain and pour the beans in clear plastic and store in the insulating box. Keep it warm for 48 hours. it is critical to maintain the correct timing and the water temperature for proper quality development.

Sun killing:

Vanilla beans of each size are wrapped in plastic sheet and exposed to the sun. When heated or sun heat decreases, store the bundles in an insulated box for 48 hours. It should be kept warm.


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Phase II: Sweating or Sun curing

After 48 hours in the insulating box, the beans are removed and spread in the sun for 1 to 2 hours to dry the moisture (sweat). Rewrap the beans in plastic and blanket and expose in the sun for more sweating. Then the hot vanilla beans put in the insulated box warm overnight. This process is continued for next 12 to 15 days until vanilla beans moisture reaches 50%. At this stage the beans become oily and shiny.

Phase III: Slow drying or in shed curing

The wrapped beans in the insulated box, spread on trays, are left in well-ventilated dry rooms. This continues for the next 60 days. The moisture content after 60 days should be 25% when beans of similar size are bundled together. Care of bean size, split and quality must be observed at all times.

Phase IV: Conditioning or aging process

The cured bundled beans are placed in boxes lined with wax paper to straighten them. Therefore, bundles of beans are lightly packed. Cover the beans with more wax paper and air tight the box with lid. It is kept in the box for 1 to 2 months before use. Ensure to check the beans weekly for mould. Should this happen re-dry and condition again.

After curing, the vanilla beans are graded and bundled. Top grade beans are oily, soft, dark brown, smooth, aromatic, moisture 18 to 25%, vanilla (minimum) 1.8% High Performance Liquid Chromatography (HPLC) test and 16 to 22cm in length with little or no split.

Bean quality

The vanilla beans once cured and ready for export must have the following characteristics:

• Moisture content 18-25%

• Appearance soft, smooth, oily and dark brown in colour

• Length 16 to 22cm long

• Vanillin content (minimum HPLC test) 1.8%

• Bundles of similar size with slight or no split

Yield

Vanilla normally comes in production in the third year after planting. It continues to increase in production for 5 to 7 years when it reaches peak production. Under average environmental condition, with good vine maintenance, vanilla vines continue production for 10 years before it loses its commercial value. Experience suggests that in good plantations cultivated under the proposed Project regime, normally 70%+ of the vines will be in production every year. A vanilla plantation should yield about 3kgs of cured beans per plant.


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Risks

I am advised that the Vanilla Manager guarantees the plantation stocking rates for the first twelve months after establishment. Risk to the investor in relation to having adequate numbers of vines available for production at that time is thus significantly reduced.

The project is subject to a number of risks that are detailed in the Information Memorandum. These risks include without limitation:

• Extreme and/or unusual weather events.

• Pests and diseases:

- Vanilla is attacked by a number of insects but none of them cause a great loss. These include green vegetable bug, scales and mealy bug.

- Some affect on climbing plants and others are vanilla specific. These diseases include Stem Rot, Black Rot, Wilt and Virus.

- Virus Control: Keep vanilla gardens from weed and burn infected plants.

Appropriate horticultural management to be implemented by the Manager will reduce or control these pests and diseases.

S. Prasad Principal Research Officer (Fiji) Ministry of Agriculture (Fiji)

January 2021

This document is and shall remain the property of Vanilla Plantations Fiji Ltd. The document may only be used for the purposes for which it was commissioned and in accordance with the Consultancy Agreement for its commission. Unauthorised use of this document in any form whatsoever is prohibited.


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5. Fees and ExpensesInvestors in the Vanilla Investment Project pay an initial Application Price. The only direct expense. At the sale of the vanilla garden produce after Year 3, the Vanilla Manager is entitled to a percentage of the Net Proceeds of Sale (plus VAT where applicable) in consideration for providing the ongoing services and access.

The table below shows the fees and other costs that you may be charged for the Vanilla Investment Project. These fees and costs may be deducted from the Application Price, the Gross Proceeds of Sale or the Net Proceeds of Sale or be payable to investors on request depending upon the particular fee or cost.

You should read all the information about fees and costs because it is important to understand their impact on your investment. There are no further direct financial obligations (refer Section 3) after the payment of the application fee.

Fees that apply to an Investment in the Vanilla Project (all self funding):

Management Costs: The fees and costs for managing your investment

TYPE OF FEE OR COST DESCRIPTION AMOUNT HOW AND

WHEN PAID

Application Fee

The fee is paid in respect of the carrying outand completion of all Establishment Services (as defined under the Vanilla Investor Agreement).

US$3100 per vanilla garden.

Paid in full by the investor on Application.

An Investor Certificate will be subsequently issued.

Ongoing Management Fee

The fee payable in consideration for the Vanilla Manager carrying out the Services (as defined under the Vanilla Investor Agreement) during the term of the Vanilla Project.

15% of Gross Proceeds of Sale (plus VAT where applicable).

Deducted from Net Proceeds of Sale at the time of each of the harvest distributions.

Access Fees

The fee is payable for the right to use the Land owned by the Operator upon which the vines are grown during the term of the Vanilla Project.

2% of Gross Proceeds of Sale (plus VAT where applicable).


Conditional Performance Fee

A Performance Fee is payable to the Vanilla Manager to provide an incentive to seek tomaximize the Net Proceeds of Sale for each investor.

Up to 15% (plus VAT) of the amount of the gross harvest weight that exceed 3 kgs.



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Costs of Production

The costs of cultivation activities (as identified in the Horticulturalist Report), pollination, curing, hand killing, marketing, shipping and costs of overseas sales (US, China, Europe, India etc.)

The amount is the amount of the direct costs payableestimated to be in the order of 40%.

These costs will be paid out of the investors share of the Gross Proceeds of Sale at the time of each of the receipt of the Gross Proceeds of Sale.

Transfer of Investment Fee

A fee is payable if you require the assign of your Vanilla Investor Agreement.

Fee payable of FJ$100 plus VAT per transfer.

Upon the transfer or assignment of a VanillaInvestor Agreement.


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6. Risks and Risk ManagementParticipation in the Vanilla Investment Project is intended to be of a medium to long term nature and is therefore subject to attendant risks.

The risks associated with growing vanilla beans are similar to those in any farming, agricultural or horticultural enterprises. The Vanilla Manager recognises the major risks associated with the Vanilla Project and whenever possible has adopted risk management strategies to minimise these risks.

Environmental/Growing Risks:

RISK DESCRIPTION OF RISK RISK MANAGEMENT

Location of the land

The land has been carefully chosen after consultations with the Fiji hydrology office and others. It is on the west side of nearby hills - up to 2000m.

The last three cyclones including a Category Five cyclone passed over the property without much damage except for rain inundation. The rain remained on the ground for less than 24 hours, the land being laser levelled for that purpose. Vanilla does not like ‘wet’ roots. The water that drained off will be channelled into a large turkey nest dam.

Wind, cyclones and other acts of God

Weather extremes can have detrimental effects on the growth of vanilla gardens, but this factor is largely outside the control of the Vanilla Manager. Gardens may be adversely affected by wind which can damage or destroy gardens. Perhaps the largest environmental risk is rainfall which can reduce growth rates and yields and in extreme circumstances can cause death of the vines.

The South Pacific area where vanillais grown, like every other vanillaregion; Madagascar, India, Indonesia, Central America, Reunion, Comoros, PNG etc, confront identical adverse climatic events.

Risk Management include laserlevelling to move water quickly from the plantations, careful land selection, appropriately constructed agricultural structures and the cabling down of buildings if needed.

We are familiar with such management practices and instituted them in northern Australia a number of years ago where they are now commonplace.


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Insects, pests, diseases, fungal, nutrition and horticulture technology

Some insects, pests and diseases can cause damage which can affect growth rates and yields.

Inter row cultivation of tomatoes etc acts as a good deterrent. This is done in Madagascar and parts of India.

Soil nutrition is another important factor that can affect growth.

The vanilla gardens will require the development of appropriate fertiliser regimes and a high standard of weed control. Failure to properly carry out this work will adversely affect the gardens productivity.

The maintenance protocol implemented for the vanilla gardens includes a surveillance regime designed to identify the existence of pests or disease, allowing appropriate action to be taken to minimise any damage.

Pest and virus control is achieved by keeping the gardens from weed and the burning of infected plants.

The impact of any initial damage is minimised through an initial 12 months stocking guarantee.

Reduced demand for vanilla products

A reduced future demand for vanilla could affect the prices at which the vanilla produce is sold.

Presently, however, worldwide demand for vanilla products is forecast to increase even further. The global demand exceeds 3,500 tons. Global production is around 2,400 tons.

We believe that there is a high potential to expand cultivation without affecting price.

Market/Commercial Risks:


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Scale and availability of resources

Availability of appropriately trained horticultural, logistical, sales/marketing and management personnel and the appropriate quantity of materials will be crucial to the success of the Vanilla Project. There is a risk that such resources will not be available in sufficient numbers.

We have secured these HumanResources.

Loss of key personnel

The ability of the Vanilla Manager to manage the Vanilla Project is dependent upon key personnel, in particular access to personnel who are appropriately qualified and trained in the establishment, maintenance and harvesting operations. The ability to retain or replace key personnel may affect the ability of the Vanilla Manager to perform its obligations under the Vanilla Investor Agreementand may affect the viability of the Vanilla Project.

A sound succession plan is being developed together with incentives.

Other Risks:


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What is the country risk for Fiji?Moody’s, a world-renowned rating agency, has this to say about Fiji:

“It has raised Fiji’s rating upwards from stable to positive. Fiji is now rated B1+.”

A pleasing upgrade. Moody’s sees three drivers creating this 2016 upgrade:

• political stability

• policy reforms

• improved funding conditions following the recent political transition

Fiji’s higher economic growth over the last four years suggest stability with rapid growth accompanied by low inflation.

For example, since the return of democracy, the Government of the Prime Minister Bainimarama’s restructuring of the civil service and public enterprise have accelerated recently. Regulatory refinements over the last year or two including the modernisation of both the countries legislation and the tax legislation bolsters the investment climate.

The US State Department and the World Bank said:

“The financial system is stable and Fiji is classified as an upper middle income economy by the World Bank.”

Source: US Department of State, June 2019


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7. Material DocumentsThe following documents are material documents to the Vanilla Investment Project. Where indicated, the documents are incorporated by reference into this Information Memorandum.

In these cases:

(a) The information provided below is not intended to summarize the key provisions of the material documents, but rather, is provided for the purpose of enabling you to determine whether or not you wish to refer to the Information Memorandum or the Snapshot document.

(b) The documents are available by:

1. Accessing the documents on the following website - www.vanillaplantationsfiji.com

2. Contacting the Vanilla Manager at [email protected] for further information.

Vanilla Investor AgreementThe Vanilla Investor Agreement which will be executed on behalf of each investor under the relevant Power of Attorney granted by the investor will incorporate, by reference the full terms of the relevant pro-forma document. The Applicant should obtain a copy of and read the pro-forma Vanilla Investor Agreement before applying for Vanilla Gardens in the Vanilla Project.

Harvesting, Marketing and Sales Agreements for Vanilla BeansThe Vanilla Manager will appoint the proposed Vanilla Export (Fiji) Pte Ltd (“VEF”) to manage the sale of the Vanilla Produce pursuant to a Harvesting, Marketing and Sales provision of the Vanilla Investor Agreement. Under the agreement, the services to be provided by VEF include assessing Australian and other international markets for the vanilla produce, finding potential purchasers for the vanilla produce, advertising the vanilla produce negotiating, the commercial terms of sale, negotiating and entering into sale agreements and harvesting and processing the vanilla produce into another form or forms and storage and delivery of the product to Big Food and other large customers in accordance with their requirements.


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8. Additional Information

Application Monies to be held on TrustUntil Vanilla Plantations Fiji Pte Ltd executes the Vanilla Investor Agreement on its own behalf and as attorney for the investor, Vanilla Plantations Fiji will hold all the application monies in a separate designated account. Vanilla Plantations Fiji Pte Ltd is entitled to any interest payable on amounts held in such account.

CertificatesFollowing the granting of a Vanilla Investor Agreement, the Vanilla Manager will cause each Applicant to be issued with a Vanilla Investor Certificate for the Vanilla Investor Agreement entered into.

Certificates will be sent to investors pursuant to this Information Memorandum not more than 30 days after a Vanilla Investor Agreement is entered into.

Change in CircumstancesAny policies of the Vanilla Manager may be subject to change in the event of any economic, financial or other changes subject to the limitations expressly provided in the Vanilla Investor Agreement, as applicable.

How to Apply1. Read the Information Memorandum or Snapshot on the website:

www.vanillaplantationsfiji.com

2. Complete, Sign and Date the Application and Payment Details Form.

Before signing the Application form, please ensure you read and understand the acknowledgment of page 52. By signing the Application Form, you are agreeing to those items on page 54.

3. Complete your International Bank Transfer otherwise known as a telegraphic transfer (“transfer”) set out on page 57.

You will see that the company as a beneficiary has already been detailed on the transfer for ease of completion.

Please confirm your payment by emailing us a copy only of your completed and dispatched form.

4. All the details required to make the transfer have been supplied on the application form. Wire transfers can be made to international accounts through your bank. Some banks allow you to make wire transfers via online banking platforms, however, some banks require you to make the transaction at a bank branch.


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You will be transferring USD into the USD holding Trust Account of Vanilla Plantations Fiji Pty Limited. There are no exchange fees applicable. Your bank may charge a wire fee for this service.

Applicant’s Acknowledgement and AcceptanceBy signing the Application Form, I/we hereby acknowledge and agree:

1. Prior to completing the Application Form, I/we were given access to and have read and understood the Information Memorandum and other documents.

2. To appoint Vanilla Plantations Fiji Pte Ltd as my/our Attorney to the extent of, and with the powers as set out in this Information Memorandum and other documents.

3. The Vanilla Manager may, in its sole discretion, accept or reject an Application in whole or in part.

4. If my/our application monies are not released by the Vanilla Manager within a period of six months from and including the date of grant of an investor interest pursuant to the Vanilla Investor Agreement to which they relate (other than by reason of my/our default), then the Vanilla Manager must refund to me/us the whole of the application monies paid which will cancel the Vanilla Investment Certificate.

5. The Project is intended to be of a medium to long term nature and I/we acknowledge the risks of the Project, as set out in the Information Memorandum.

6. If the Application Form is signed by an Attorney, the Attorney states that he/she has an irrevocable power of attorney given for valuable consideration under authority of which this Application Form is signed.

7. I/we authorize the Vanilla Manager to register me/us as an investor in respect of the number of Vanilla Gardens indicated on the Application Form (or such lesser number as may be accepted).

8. I/we acknowledge that information contained in my/our application for Vanilla Gardens will only be released in accordance with:

a) the Vanilla Manager’s Privacy Policy; and

b) as required or authorized by law.

9. I/we am/are at least 18 years of age and do not have any mental illness that impairs my/our judgment or behavior to a significant extent.

10. The courts of Fiji have exclusive jurisdiction to determine any dispute under or in connection with the agreements and understandings relating to this project.


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VANILLA INVESTOR AGREEMENTThe pro-forma Vanilla Investor Agreement is incorporated by reference into this Information Memorandum and contains provisions dealing with the following:

• Establishment Services and Services

• Sale of Vanilla produce by Vanilla Plantations Fiji Pte Ltd

• Rights of Investor to Vanilla Produce and profit a prendre provisions,

• Proceeds of Sale

• Remuneration for Establishment Services

• Remuneration for Services

• Performance of Investors Covenants

• Power of Attorney

• Restrictions on Assignment by Investor

• Default and Termination

• Notices

• Payment of Stamp Duty and Registration Fees

• Force Majeure

• Copy can be obtained by contacting us on email: [email protected]


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Power of Attorney By signing the application form on page 57 of the Information Memorandum, the applicants are agreeing to appoint Vanilla Plantations Fiji Pte Ltd (“VPF”) and each Director and Company Secretary of VPF jointly and severally to be Attorneys for the Applicant, in the Applicant’s name, on the Applicant’s behalf and as the Applicant’s act and deed on the terms specified below and to exercise the powers set out hereunder. The Power of Attorney is irrevocable and given for valuable consideration.

1. The Applicant grants the Attorney the powers listed in paragraphs (a) to (m) inclusive.

(a) to enter into and execute on the Applicant’s behalf, a Vanilla Investor Agreement (“Agreement”), which the Applicant has offered to enter into which is accepted;

(b) to date the Agreement and complete the blank spaces in the schedule thereto;

(c) to make and initial any necessary alterations to the Agreement which are not prejudicial to the Applicant’s interests in the considered opinion of the attorney;

(d) to make, do and sign all acts, deeds and things as may be necessary to procure the stamping of the Agreement (if required) with the power to instruct the Attorney’s solicitors to assist them in this regard;

(e) to vary the provisions of the Agreement, provided that the variation:

• in the opinion of the Attorney is not likely to be to the detriment of the Applicant’s interests in the Agreement;

• will, in the opinion of the Attorney, enable the Agreement to be better administered and managed in the interests of the Project;

• is, in the opinion of the Attorney, required as a matter of continuing compliance with relevant Fiji statutory requirements;

• is in the opinion of the Attorney required to correct a factual error in the documents; or

• is agreed between the Applicant and the Attorney;

(f) to make and initial any necessary alterations to the Agreement which are not prejudicial to the Applicant’s interests in the considered opinion of the Attorney;

(g) to make, do and sign all acts, deeds and things as may be necessary to procure the stamping of the Agreement (if required) with the power to instruct the Attorney’s solicitors to assist them in this regard;

(h) to vary the provisions of the Agreement provided that the variation:

• in the opinion of the VPF is not likely to be to the detriment of the Applicant’s interests;

• will in the opinion of VPF enable the Agreement to be better administered and managed in the interests of all;

• is in the opinion of VPF required as a matter of continuing compliance with relevant statutory requirements;


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• is in the opinion of VPF required to correct a factual error in the documents; or

• is agreed between the Applicant and VPF.

(i) to enter into and execute on the Applicant’s behalf, an agreement to sell the vanilla produce on such terms as VPF considers appropriate, which agreement will be ineffective if the Applicant elects on or before six years from the commencement date to take their own produce;

( j) to date the agreement to sell and complete the blank spaces in the schedule to that agreement;

(k) to make and initial necessary alterations to the agreement to sell which are not prejudicial to the Applicant’s interests in the considered opinion of the Attorney;

(l) to make, do and sign all such acts, deeds and things as may be necessary to procure the stamping of the agreement to sell with power to instruct the Attorney’s solicitors to assist them in this regard; this includes any action by another investor or its agent or agents to upset the contractual arrangements between the investor or all the investors. The Attorney may take whatever action that he considers reasonably necessary to not disturb the various agreements entered into by the investors of this project.

(m) to vary the provisions of the agreement to sell the vanilla produce provided that the variation:

• will in the opinion of the Attorney enable the agreement to sell to be better administered and managed in the interests of the project;

• is, in the opinion of VPF, required as a matter of continuing compliance with relevant statutory requirements;

• is, in the opinion of VPF, required to correct a factual error in the documents; or

• is agreed between the Investor and VPF.

2. In the case of any variation to be effected to the Vanilla Investor Agreement (“Agreement”) which, in the opinion of VPF may adversely affect the Investor’s interests, such variation may only be affected if it has been approved by an ordinary resolution at a formal meeting of Investors.

3. The Applicant agrees at all times to keep the Attorney indemnified against all claims, demands, costs, expenses, damages and losses of any type arising as a result of exercise of the Power of Attorney granted.

4. The Investor undertakes to ratify all that the Attorney lawfully does or causes to be done under the Power of Attorney granted.

5. The Power of Attorney granted by way of the Investor’s signature on the Application Form, will be an enduring one and remain in full force and effect until notice of the death of the Appointer.


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6. Any person or any other registration authority in Fiji dealing with the Attorney under this power is entitled to rely on execution of any document by the Attorney as conclusive evidence that:

• the person holds the office set out in the power;

• that the power of attorney has come into effect;

• that the power of attorney has not been revoked;

• that the right or power being exercised or being purported to be exercised is properly exercised and that the circumstances have arisen to authorise the exercise of that right and power; and

• they are not required to make any enquiries in respect of any of the above matters.


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Application Form and Payment Details

1. Name(s) of Applicant(s) Surname or Company Name

3. Contact Details for Applicant Contact Name

Applicants: Please email the completed Application Form and your bank’s payment confirmation advice of the bank transfer to:

[email protected]

(+61) 408 440 816

4. Payment Applications must be made in multiples US $3,100

Total number of Vanilla Gardens ______________ x US$3,100 per garden = US$ _________________________

International Bank Transfer

Home Phone

Email

2. Address Number & Street or PO Box

Suburb/Town/Country

Title

Mobile/Cell Phone

Note: Transfer Description Ref: Applicant’s name

(Total Amount Payable excluding VAT)

Fax

State/County

Given Name(s) (no initials)

Postcode/Zip Code

Vendor/Seller: Vanilla Plantations Fiji Pty Limited

Address: Address 5/49 York Street, Sydney NSW 2000

Account Name: Vanilla Plantations Fiji Pty Limited

Bank: Westpac Banking Corporation

Bank Address: 99 Pitt Street, Sydney NSW 2000

Swift Code: WPACAU2S

BSB: 034 702

Account No: 253 366


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Vanilla Plantations Group of CompaniesPrivacy Policy

We are committed to ensuring the confidentiality and security of the information you provide to us. To comply with legal requirements and to run our business effectively it is necessary for us to collect certain personal information about the people with whom we deal.

Information will not be disclosed beyond this group of people unless you have provided written authorization that we may do so, or unless required or authorized by law.

The information you provide will only be used for the purpose for which it was intended.

The Vanilla Plantations Group of Companies takes all reasonable security measures to protect personal information from loss, unauthorized access, destruction, misuse, modification or disclosure. As far as permissible under law, the Vanilla Plantations Group of Companies accepts no responsibility for the unauthorized use of personal information held by it.

Vanilla Plantations Group - Protecting your Privacy

This privacy policy relates to all of the operations within Vanilla Plantations Fiji Pte Ltd.


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Glossary of TermsIn this document:

Agreement means the agreement between Vanilla Plantations Fiji Pte Ltd and an Investor to which the investor engages Vanilla Plantations Fiji Pte Ltd to attend all aspects of the vanilla and the sale thereof.

Applicants or Investors means a person making an Application pursuant to the Application Form.

Application means an application for a Vanilla Garden pursuant to the Information Memorandum, Snapshot or Website.

Application Price means in the Vanilla Project, the amount of US$3100 for a Vanilla Garden.

Ariel/Adventitious Roots (Vanilla)Roots above ground used by the vine to cling to and support the host plant or trellis.

Bagasse Residue left behind from sugar cane processing that is commonly used as vanilla mulch.

Basal Leaves One that grows on the lowest part of the stem

Bourbon (Vanilla) Vanilla originating from the Indian Ocean including Madagascar, Comoros, Mayotte and Reunion Island (formerly Bourbon Island) and also the name commonly given to the curing process of the region.

Certificate means the certificate issued by the Vanilla Manager to the investor noting an investors holding or Investment Agreement.

Commencement Date means in relation to the Vanilla Project, the date of execution of the Investment Agreement.

Costs of Tending means all costs (inclusive of VAT) associated with, including but not limited to, minding, pollination, cultivating and harvesting.

Costs of Pollination and Harvesting means all costs of harvesting, curing and killing, bagasse application, pollination and all reasonable administration and management charges incurred in connection therewith.

Costs of Sale means all costs of sale other than listed above, contracts, fees paid in respect of the use of any facility or instrumentality and all taxes levies imposts and charges or any nature.

Curing The process that transforms the flavourless green beans (“pods”) into the world’s favourite flavour: vanilla.

Date of Acceptance means the date on which the Vanilla Manager accepts an Applicant’s Application.

Divanillin A compound formed from vanillin during the enzymatic curing process that adds a creamy fatty mouth feel to the flavour of vanilla beans.

Enzymatic The reaction caused by the curing process that leads to flavour and aroma development of the cured vanilla beans.


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Establishment Services means the services provided in the period commencing from the Commencement Date and ending within the estimated 13 months of the issue of the Investment Agreement (“Initial Period”), as set out in the Management Investment Agreement. Establishment Services are all commercial horticultural activities to be carried on by the investor on the Vanilla Garden according to good horticultural practices, including but not limited to the following:

(a) preparing the vanilla garden for planting necessary from the Commencement Date;

(b) procurement of sufficient vanilla vines as is reasonably required to complete the Planting Services;

(c) fertilising and mulching the vanilla garden as necessary from the Commencement Date;

(d) maintaining the vanilla garden according to good horticultural practices; and

(e) the planting services.

Fusarium This is fungal disease affecting Vanilla planifolia.

Gross Proceeds of Sale means the investors proportional interest in the gross amount received by the Vanilla Manager from the sale of Vanilla Garden produce in accordance with the Investment Agreement.

Independent Horticulturalist means a person or other expert commercial orchid growing appointed in writing by the Vanilla Manager.

Inter-cropping The cultivation of two or more crops simultaneously, occurring on the same field to manage insects etc.

Internode means a part of the plant stem vanilla vine between two of the nodes from which leaves emerge.

Investor means a party, other than the Vanilla Manager under the Vanilla Investor Agreement referred to in the Information Memorandum.

Killing The method of starting the enzymatic curing process, most commonly the act of dipping the green beans into water heated to 65 degrees Celsius.

Law The law of all of the agreements envisaged in the Information Memorandum is exclusively the law of the Fiji Islands.

Net Proceeds of Sale means gross proceeds of sale less the investors proportional share of the sum of the costs of sale and costs of managing the vanilla plantation.

Penicillium and asperfillus Mould species with a detrimental impact on vanilla vines.

Plantation Termination Date means the date on which the Vanilla Project is terminated. Generally the 10th anniversary of the planting or when they cease to be commercially viable, whatever first occurred.

Plantations means an investor’s plantation within the meaning of the Information Memorandum that produces no more than 3kgs of cured beans per vine per annum.

Project means the project embraced in this Information Memorandum.


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Raceme This is the term of branching and associated flowers that develop off the main stem.

Services means all commercial horticultural activities (excluding the Establishment Services) to be carried out by the Vanilla Manager on the Vanilla Garden to manage and maintain a vanilla garden according to good horticultural practices, including but not limited to the following:

(a) cultivating, tending, culling, fertilising and otherwise caring for the vanilla plants as and when required;

(b) keeping in good repair and condition an access road or roads within the Gardens, as required;

(c) obtaining a report by the Independent Horticulturalist for all vanilla gardens as soon as practicable after they have been established for 12 months and then by 31 July in each year thereafter for at least one third of all gardens, on a three year rolling period, to be furnished to investor made available on the internet;

(d) the Vanilla Investor Agreement, organising and accounting for the Net Proceeds of Sale;

(e) carrying out any other obligation to be performed by the Vanilla Manager pursuant to the terms of any agreement entered into by the Vanilla Manager pursuant to the Vanilla Investor Agreement for the sale of vanilla produce.

(f) marketing and sales of vanilla beans.

Terroir means the set of special characteristics that are the geography, geology, climate, soil composition of a certain place or area that apply to the vanilla garden.

Total Net Proceeds of Sale means the total Net Proceeds of Sale over the term of the Vanilla Project, including the Net Proceeds of sale in relation to the Final Harvest Distribution.

Trellis means a timber frame or steel wires used to support the vines in the plantation.

Tutor(s) means traditionally a term used to describe a shrub or small tree on which the vanilla vine is grown, now also used in reference to artificial supports such as timber poles.

Vanilla Investor Agreement means the agreement between the Vanilla Manager and an investor pursuant to which that investor engages the Vanilla Manager to manage the investor’/s Vanilla Plantation and sale of produce.

Vanilla planifolia means the vines grown on each trellis or like from time to time.

Vanilla Plantation Fiji Pte Limited means the Vanilla Manager.

Vanilla Manager means the manager in relation to this vanilla project.

Vanilla bean yields means in terms of green or ‘vrac’ beans being 5 to 6 kgs of ‘vrac’ beans to every 1 kilogram of cured vanilla beans. The quantity of cured vanilla beans per vine will be up 3kgs as set out in the various tables of the Information Memorandum and elsewhere.


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Vanillin This is the principal compound responsible for the flavour and aroma of vanilla beans.

Vrac means the green vanilla bean (pod).


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9. ‘Vanilla Scarcity’ in the MediaThe following media articles can be found on our website under ‘Media Resources’.

Investor sees future for vanilla farmingAbishek ChandTHE FIJI TIMESFebruary 7, 2020

Vanilla Bean scarcity a blow to chefs and food industryAustralian Food NewsMarch 18, 2020

Fiji pounces on vanilla scarcity opportunityLena ReeceFijian Broadcasting CorporationJanuary 20, 2020

Pacific hoping to cash in on worldwide demand for vanillaEvan WasukaABCDecember 26, 2019

Vanilla Production in Uganda Surges as Farmers Battlle ThievesFred Ojambo and Matthew HillBloombergMarch 7, 2018

How to ensure stable supplies in a volatile vanilla market?Nilamh MichailFood NavigatorMarch 8, 2019