Watershed Premium Wines Ltd plans to raise a further $9.6 million from investors early next year following strong investor support for managed investment schemes in the wine sector during 2006-07.
Watershed Premium Wines Ltd plans to raise a further $9.6 million from investors early next year following strong investor support for managed investment schemes in the wine sector during 2006-07.
Money raised through WA-based MIS wine projects last financial year nearly doubled to $20 million, up from $12 million in 2005-06, according to a recent survey by Australian Agribusiness Group.
The survey results revealed the wine sector bucked a decline for MIS fund raisings, which fell $15 million to $230 million.
Nationally, AAG said $1.13 billion was raised for MIS projects in 2006-07, a slight decline of $2 million on 2005-06.
The AAG survey also revealed that $230 million, or 20 per cent of the funds raised across the MIS sector, was for projects based in Western Australia, which made the state the second largest MIS revenue generator next to Victoria.
AAG director Tim Lee said $120 million of the $230 million raised for WA projects was timber related.
AAG estimates that, by area, projects in WA represent 57 per cent of total land via MIS projects to be developed, up from 40 per cent the year before.
AAG said the big increase was largely due to one project, where development of large areas of cropping land was planned.
Industry observers expect another strong year for non-timber related MIS schemes as investors will only get up-front tax deductions for forestry related MIS projects up to July 1 2009.
Watershed managing director Geoff Barrett said he had decided to push ahead with another MIS project based on a successful raising last financial year.
The Margaret River winery raised about $10 million from investors in 2006-07 to develop 60 hectares of vines for stage three of its vineyard development, and will release its final project early next year to raise a further $9.6 million.
The stage four project will fund the development of 54ha of vines on a parcel of land Watershed is currently negotiating to buy for $1.5 million.
In September, the business will have planted 177ha of vines, with the stage four project extending vine plantings to 231ha.
Mr Barrett said the business was founded with a vision to have between 230ha and 240ha under vine because it wanted to generate $20 million in revenue.
He said to reach its revenue target it needed to produce between 160,000 and 170,000 cases of wine.
AAG’s survey revealed the 2006-07 MIS grape projects will fund the establishment of 600ha of vines, with 230ha based in WA.
AAG figures reveal that, in 2005-06, MIS projects funded the development of 140ha of vines in WA.
Non-MIS wine operators have been highly critical of the tax-effective schemes to fund vine development and argue they have contributed to an oversupply of grapes.
Critics argue that planting more vines is likely to push the industry back to a period of grape oversupply, which crippled many players in the sector a few years ago before tough weather conditions led to much smaller harvests in 2006 and 2007.
