Hi there,Just following up on discussions re oil content. I have...

Hi there,

Just following up on discussions re oil content. I have gone back and reread through the TFS product 2009 PDS statement and I am feeling very comfortable with TFS predictions. Also in light of comments in east vs west conflict posting...Why are Lush, perfume houses and the middle east falling over themselves for TFC / TFS products!

Collective objective evidence in my view - Company statements, independent expert statements, off take agreements, direct investment by MIS investors and now funds all bodes well!

I encourage you to do this also - you will also note that TFS is a very professional / well managed company.

http://tfsltd.com.au/library/file/product-disclosure-statements/TFS%202009_PDS_FINAL_WEB.pdf

Interesting points include:

TFS statement:

TFS group aims to become the world’s leading producer
of sustainable, ethical and environmentally-responsible indian
sandalwood and related products, produced in a sustainable, ethical
and environmentally-responsible way. The experienced team at TFS
deliver first-class plantation management aimed at providing investors
with the best growth, yields and returns.

Indian sandalwood expert statement:

I have considered the TFS Plantation Management Plans, and have
reviewed the TFS plantations in May 2008. I am of the opinion that
the forecast of an average yield of around 30kg of heartwood per
Sandalwood tree is achievable in the plantation time frame.

I have viewed the TFS plantations, and have had analysed trees
at the age of 3 years for oil, and can confirm that analyses have
PROVEN the presence of oil within those trees – EARLIER than would
normally be found in a natural environment in India.
In April 2005 I also received from TFS core samples from 31 six year
old Indian Sandalwood trees from their 1999 plantings. These were
analysed at the Institute of Wood Science in Bangalore and returned
very good oil yield results considering the age of the trees. In 4 cases
the oil yield was over 2% which is EXCEPTIONAL for trees of that age.
Seventeen of the samples had 0.5% oil content or better. In all but three
cases evidence of oil was detected. These results auger well for the
future of the Indian Sandalwood industry in the ORIA ,as in India as
such consistent oil indications would not be expected in trees so young.
Heartwood is contained within the trunk, butt, roots and major
branches. The oil content in the butt and the roots is slightly more
than in the trunk and the branches. It is said that one tonne of good
sandalwood roots and butt will yield 55 to 60kgs of oil; whereas
the branches would yield a lower percentage of oil. Within the tree
there will be slight progressive reduction in the oil content from roots
to butts to stem and ultimately to the branches.

Other relevant points:

Although individual trees and some trial plots of Indian sandalwood
in the ORIA have been grown to the harvesting age of 14 years,
they have collectively provided limited samples from which yields on
a plantation scale may be calculated with a degree of precision.
However, the growth and yield data from this source has been
supported by the data reported in the scientific literature form India
for Indian sandalwood, and from New Caledonia where a similar
species Santalum austrocaledonicum is grown.
All the technology to be applied to the establishment and
maintenance of the sandalwood plantations for this project has been
developed and extensively tested locally over a period of 22 years.
It has been proven also by 10 years experience in establishing
plantations on a commercial scale in the ORIA. The Consultant has
been closely involved in these stages of development and regards
the techniques and protocols that have been developed and which
will be adopted for this plantation project to be robust and reliable.
Yield estimates given in this PDS are based largely on the FPC
experimental plantation and on the extrapolation of growth rates and
characteristics of other individual and small groups growing in the
area. This is supported by scientific literature of Indian Sandalwood
which is largely based on trees growing in natural forests.

Testing performed on 20 of the 14 year old trees from the FPC’s
experimental plantation showed an average oil yield of 3.15%.
This oil successfully met the International Standards Organisation
(ISO/DFIS 3518) for Santalum album oil (see Expert Forester’s
Report for further details).

The development of heartwood in plantation grown trees in the
ORIA has been found to have started in most trees by the 5th
year after planting. 90 percent of a sample of 31 trees cored by
the Responsible Entity in their 6th year from planting had readily
detectable amounts of oil in their heartwood when analysed by the
laboratories of the Institute of Wood Science and Technology in
Bangalore, India. Subsequent development of the heartwood has
been monitored by purchasing small numbers of privately grown
sandalwood trees that were destructively sampled to their heartwood
content and by a government funded study of 10 year old trees.
The Responsible Entity has been unable to acquire any trees of an age
suitable for harvesting – they are exclusively government owned. As
a consequence estimates of heartwood quantity and quality in trees
of this age have had to be made by simple modelling from the data
released by government from limited core sampling of their 14 year
trees and from the Responsible Entity’s own investigations.
Estimates are based on our knowledge that sapwood is converted to
heartwood when it is 5 years old. Thus the heartwood core of a 10
year old tree is the same diameter as the as the whole tree was at
age 5 years. Similarly the heartwood core at age 14 is the same as
the total diameter of the tree was at age 9 years.
The usable heartwood core of a tree is in the form of a truncated
cone, and the volume is calculated by multiplying the basal sectional
area by the height of the bole and dividing the result by a “form
factor”. In the case of a true cone the form factor would be 0.33.
For the truncated cone of usable heartwood in a 14 year old tree
a factor of 0.5 is used (this is a conservative estimate; most log
volumes are calculated using a form factor of 0.6).

The basal diameter of the heartwood at age 14 is expected to be
16 cm in the intensively managed TFS plantations, and the length
of marketable heartwood core is expected to be between 2.5 and
3 metres. Using these data, the volume of heartwood expected in
the bole of an average 14 year tree will be: basal sectional area of
201 sq. cm. multiplied by the height of 250 cm and multiplied by
the form factor of 0.5 = 25.1 litres. The heartwood has a specific
gravity of 0.9, so the weight of heartwood in the bole is calculated
at (25.1 x 0.9) = 22.6 kilograms. To add to this figure, there is
additional marketable heartwood in the butt and larger roots of
the tree that contribute at least 20 percent of the total heartwood
weight. Taking the butt and roots into account the average 14 year
old tree is estimated to produce around 27 kilograms of heartwood.
Oil quantity and quality in the heartwood is of great importance to
the market. The trees sampled by the government in its 14 year old
plantation had an average oil content in the heartwood of the lower
bole of 3.15 percent. This is a commercially acceptable level.
Oil quality is judged mainly on the percentage of alpha- and
beta- santalols it contains. In the above study of 14 year old
trees, alpha-santalol varied from 44.7 to 46.7 percent and betasantalol
from 20.8 to 22.8 percent. These levels comfortably meet
the International Standards Organisation’s standards for Indian
sandalwood oil (ISO/DFIS 3518) which are 41 to 55 percent for
alpha-santalol and 16 to 24 percent for beta-santalol.
These figures are indicative of the high quality of the oil that can be
expected from trees grown in this project