posted on: 2009-09-27 00:55:43
Ukraine Farmland Investments
By wito schouten Gibraltar
Business: Investment September 13, 2009 Sterling Knight offers investors an annual income on crop harvests on wheat production in Ukraine together with capital gains on the increasing value of the land.
(Free-Press-Release.com) September 13, 2009 -- "Companies with their eye on their 'triple-bottom-line' (economic, environmental, social sustainability) outperform their less fastidious peers on the stock market" - The Economist
Sterling Knight Ltd offers investors an annual income on crop harvests and capital gains on the
increasing value of the land. Smart investors are turning to this sector now - why? Supply and demand.
Demand has increased as a result of the growth in the world s population (there are approximately 211,000 more mouths to feed every single day). Add this to the need for more land to produce bio-fuels, and demand for soft commodities is higher than ever before.
However, supply remains stagnant. Production of grains is at a historical 30 year-low and yet consumption continues to grow, hitting a record high of 35 million tonnes in 2008. As a result, a significant gap between supply and demand has emerged.
This gap in the market has attracted institutional funds who have poured £8 billion into agricultural land over the past 18 months alone, despite the economic downturn. It is for this reason that Sterling Knight is excited to bring this agricultural investment opportunity in the Ukraine to the market.
Ukraine is known as the bread basket of Europe namely for the fact that 70% of its land is arable, and it has 40% of all rich black earth soil in the world. Investment with a well-established London-based plc with over ?100 million in property currently under management.
Ukraine's harvest yield is expected to double over the next five years. Rising world population and higher prices are creating food shortages meaning the need for additional food supplies is urgent.
The price of agricultural land in the Ukraine is forecasted to double in 2009 from US$1,500 a hectare, and then continue to increase by 28% per annum (areas such as Western Europe are overpriced and offer land at around US$13,200 - US$32,200 per hectare)
The global wheat price reached a massive US$205 on 26th August 2009, and is projected to be in excess of US$300 per tonne within 5 years. Wheat prices over the past decade have increased by over 105%.
A Ukraine-based management company Eurofarms LLC will oversee all operations and implement
western management techniques, technology and state of the art equipment to provide high yields for investors.
EUROFARMS
Cost of land is currently $1,000 per hectare. The capital appreciation is projected to increase by 415% over five years from the sale of the lease of the land.
Projected 14.9% yield on one-off cultivation cost of US$550 per hectare. 30% of the net profit from the harvest paid annually, providing year on year income for investors. Projected 5 year exit based on a purchase of the site after interest from institutional funds.
The Ukraine Yield improvement in wheat production in the first year alone is expected to be more than 100% due to investment in modern farming methods. This will bring yields generated per metric tonne the same as the UK.
Total Consumption of course grains has increased by 47% over the past three decades. The stock of grains as percentage of total production is down by 50% since 2004.
Stock is currently at a 30 year low. The net effect of increased consumption and supply restrictions has led to wheat prices increasing by 105% over the past decade despite consumption only increasingby 47%. Improvements in yield production peaked in 2003.
SRI - Socially Responsible Investing
Investors, who wish to align their principles with profit by investing in ethically minded products, are often perceived as a periphery group, however in recent years SRI – Socially Responsible Investing – has blossomed into an extremely viable and lucrative investment strategy.
Sterling Knight only recommend projects with humanitarian, bio diversity and environmental benefits. Tackling issues such as climate change, developing world poverty and renewable energy, Sterling Knight seek to show that helping the planet and making money can go hand in hand.
As a leader in sustainable and responsible investing (SRI), Sterling Knight recognises that investors want choice in how they meet their financial goals and impact corporate responsibility and sustainability practices, we offer three distinct SRI products.
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For more information:Suite 3 2nd Floor, Icom House,
1/5 Irish Town,
Gibraltar
www.sterlingknightconsultants.com
