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Home My WebLink AboutCOM 0265.000 1996-1998 OOJMYY Of pqw'' DOMINIC YAGONG ~d~r,., I'honc (808) 961-8254 Gnmcilrnrmber FAX: (SOS) 9693291 ay:;- „ ro ~re'u .N'r CO COUNTY COUNCIL pn County of Hnwnii CO ~ March 27, 1997 Hawaii County Building ~ L N ~ ~ 1 25 Aupuni Street ~ ~ ~ Hilo, Hawaii 96720 ! 2I ~ ` j i ~ N _ N Aloha! I would be very interested in your opinion on the enclosed Oji/Marubeni proposed forest plantation project. I recently sent you highlights of [he proposal, but [he enclosed document contains a more in depth view of the project. As you know, the proposal will come before the County Council for review and approval or disapproval. The council role would be to authorize the leasing of 4400 acres of county lands to Oji/Marubeni for the proposed forest plantation project. The entire proposal includes negotiations with the State and private landowners. Specifically, I would like to know whether or not your organization supports the proposed project? Do you have a specific concern about the project or the language of the lease'? Would you consider this a wise investment economically'? Do you have any environmental concerns regazding the project'? Do you support the administration proposal to utilize these lands in [he forestry industry, or do you have alternative proposals for the 4400 acres'? As I have stated in a previous letter, the delegation from Oji/Marnbeni will be in Hawaii for informational meetings in May. 1 will keep everyone abreast of the details regarding [he community meetings as they become available. As the Councilmember of the Hamakua District, I would sincerely appreciate your feedback on this proposal. Specific questions regarding the proposal can be directed to John Michael White of Hawaii Land Company in Honolulu. He can be reached at (808) 524-(000, Extension 1. Thank you for your time and effort in sharing your opinions regarding this proposal I look forward to your response. abmest Aloha. Dominic Yagong,!C~u~m man Hawaii County Council i DY/la Enclosure . _._~-S APR 2 2 t93t F.;.e. iPdt B.~,~,._ .......~~.-..tea w REPLY PLEASE AEFE~ TO SEC nO LETTER NO January 31. 1P9i [[unorable Stephen K. Yxmashiro Mayor of the County of Hawaii 2~i Aupuni Street. Pooml15 llilu,IG•twaii 9Gi10 Dear Mayor Yamashiro Pic: Hawaii Susrlinable Forest Plantation Prnioct We are pleased to propose, on behalf of Oji Paper Company. Ltd. and Maruhcni Ccxporation as follows: Oji Paper Company, Ltd., is the largest paper company in Japan and Marubcni Corporation is one oC the largest trading companies in Japan. l3uth companies were c•stahlishod in [he 1800's anti have been operating successfully. Cor over Ip0 year:. antl Oji has joint-ventured numerous afforestation projects in various rt•gions of the free world. The most recent oC these projects arc located in Australi;t. New %calancl and Vietnam. In thc• mid-1~iD's. biafubeni Corporation imported wood chips Crum I I;twaii Island to J;tpan Cur the paper production of Oji Paper Company. In the course of several yertrs. a substantial quantity oC wood chips were sent to Japan Cmm the Island of Hawaii. Unfortunately, the supply ofcxisting sources of wood was limited at that time. and when both companies explored the possibility of developing a major afforestation project on the Island. the upporwnitics did not look promising. Our interest in developing a major afforestation project on the island of Elawaii has been renc•wetl recently. as a resultof interest in the subjact being cspressc•d by both you anrt Mr. John Michae•I Whito during numerous mt•etings than we have had with you over the past three years. Wo untle•ratrtntl t.h;u t.~^ opporwnity for starting a new industry uC this type on the island i~ core pram sing uulay. and we are in the process now oC finalizing-qur feasibility studi,a Cor such ;t venturi~ _ MARUBENI CORP'ORA7ION L V.O. 00%595. TOKYO 10691. DAMN TELEVMONE: TOKYO 3R-3111 CABLE .MARUBENI TOKYO TELE%: R273fi. J72327. d33y9 I €~~w^a~~a~rl Our feasibility studies Indicate that the minimum :trey fur an affures[ation pruject on the island of Hawaii should be '15.000 acres. 1'he availability of additional land in the area. for possible expansion of the pruject in the future. would be preferred as well. ~4'e helieve that your Hamakua coast lands. and near-by land; owned by the state of Hawaii and others, would be an ideal site location fur a project oC chic type. If we ore provided with suitable land. cleared and with good access. an atvertge of :3.100 acres oC new trees could be planted each year. We estimate that the [reel would be harvested on a cycle renging Crom six to nine years. We have calculated an average eight year cycle in our feasibility studies, to be conservative. We helieve that the idea( combination of hinds for this project is as follows: County of Hawaii land 4,400acres State oC"IFB" Hawaii land S.l00acres State existing timbers 1,100acres Other Lands 14.400acres Towl 25.OOOacres As stated shove. our minimum requirement for this pruject is 25.000 acrta. and if we are able to st:cure more acreage it will be preferable. We have already obtained a position on the State "IFB~ lands oC5.100 acres and State existing timberlands of 1.100 acres referred to above, and we must havo other Iantls which arc adjacent to or located near-hy to ensure the success oC this project. Without these other lands we may he unable [a justify going forward with the project. We recognize the interest of the state. the county anti the community in creating as many new jobs in this area as possible, clue to the recent closing of the sugar plantations. As our project is dcvoloped over the years. an increasing number oC new jobs would become available. Our interest would he to hire as many local residents of the region as roasonahly possible, with a minimum number oC managemont or teaching personnel coming in from other areas. It may be possible to accelcrue the number of new jobs created early on. if we arc able to harvest the existing trees now growing on [hc many state and private plantations in the area. As p:trL uC Lhc new pruject. we woo!„ develop a new job training program, to assist those formerly working in the sugar industr i, Icarn the trade of forestry. Undersutnding the great interest oC the state. count}' and local community fur protection of the environment. we promise to put our very best management practices into effect Cur the establishment of this project. The detail- are explained further un in this proposal in the paragraph entitled. "Forest Management Plan" of the enclosed 'O/M Flawaii Forest Project Proposal Outline"("Proposal Outline'). We believe that our companies arc ideally qualified to develop this project, in view of our prior experience on the island oC Fiawaii, our expertise in this Cu+ld for many years, and our ability to guarantee purchase of the end-product of the plantation ut harvest. A primary factor to consider also should be our guutl reputation and cre[lit worthiness in [his industry. We are only interes[etl in pursuing such a project iC we are certain [hat it will be a successful endeavor. 1'he basic business terms oC our proposal to the County arc set Furth in the enclosed Proposal Outline, which in turn is based on terms already negotiated with the State of Hawaii for the State "IFB" lands. The enclosed Proposal Outline is intended w express our very sincere interest in developing an Afforestation Project on your lands in combination with other lands in the area. We hope [hat such a project can be created, and that Oji. Maruheni and the county oC Hawaii can enter into a cnisCactory agreement to incorporate county lands into this project. With this objective in mind. please realize that you should not consider this letter xntl the Propus:ll Outline as legally binding upon Oji or Maruheni, unless and until all such definitive Icgal agreements have been executed and delivered between the parties. Thank you very much Cor taking time to consider this Ietter.etntl our enclosed Proposed Outline. both oC which up-date our prior proposal [o you of July 2C,. lp~('>>. We shall look Curwartl to hearing from you soon and upon a favorable indication from you we will be happy to present our Letter oC Intent which would enable us to go Corwacd with our clue diligence study of your lands in anticipation of signing a Ieasc agreement Cur this project. In the meantime. please Ccel free to contact us. or Mr.dohn Michael White or McCliffurd J. Miller should you have any further questions re~arcbn~ our proposal. Sincerely, L ~~'Ti. +..""...'li~~~1 Oji Paper Company Ltd. \larubeni Curpuration i Shinji akui iienji Mizobc General Manager, Gcnoral Man~~gcr. Overseas ACCorestation. Wood Chip Department Wood anti Purchasing Divisiun encl: O/M Forest Project Proposal Outline to County oC I [awaii cc: Mr.John Michael White, Flawaii Land Company cc: Mr.Clifford J. Miller. Esq. & Mr.David Kuriyama, Esq McCorristun Mihu 64iller Mukai t_"3"~' ~~'0~71 O/M Hawaii Forest Project Proposal Outline 1. Forest Management Ptan J-1 Outline of Forest Manaeement Proposal (Plan) a. Obiectives Our objective Car this project is to establish a Eucalyptus plantatiun to produce pulpwoods on former sugar cane lands situated on Hamakua/Dlorth E[ilo coast. and manufacture in Elawaii wood chips for export to Japan. In order to achieve this objective, we will manage the plantation forests and forest land; with close attention to local environment and to beneC~ts of local communities. b. Species to be planted We will select the species based on suitability of the local environment. At this moment, we are planning to plant Eucalyptus glohulus on the Innds higher than 2.000 Ceet elevation and Eucalyptus grandis Cur elevations below 2.000 feet. Since the County land is located at elevations below 2,000 feet. must of the trees wuuld he E.grxndis. Flowever, hecauso of the high pulping quality of the species we would like to expand tho globulus plantation area as much as possible. c. Plantine schedule With a combination oC the County. the state ant) other lands. wo will plant a minimum 25.000 acres in 8 years. Our basic planting schedule. oC the project is to plant trees on 3.125 acres in total per annum. Although the county of Hawaii land would constitute roughly IS percent oC the total project area. we prefer to plant trees on the County oC E[awaii land 3 to 5 years later after execution of the land lease as such land is currently in interim uses for pasture. etc. d. Harvest and replantine schedule Harvest will sGtrt in t`.~ 9th year or earlier. anu ~aplanting fur thc• 'Intl rutatiu.. will he ;i. at that time if the estimated coppice regrowth is dot.-mined w be unsatisfactory. We also expect to start hacrvestin~ and chip pnxluction earlier ~~~~-ra3~~si than the harvest of our own plantation trees by hopefully utilizing the osistin, u~ees. mostly in the State of Ha~caii forest. to improve viability of the project. early new job creation antl early trtining. e. Expected «eld for each rotation Our estimated yield fur each eight year rotation is 2.524 cubic feet (eft)/acre (under bark) or 80m:3/acre (under bark): MAI :353 eft (under bark)/acre/year x 8 years or lOm:3(under b.vk)/acre/year x 8 years 1-2 Details of Forest Management Plan a. Species and provenance selection Por the first year plantation, wo would like to use existing seed swcks owned by _ the State oC Elawaii nursery. ACter the expansion or establishment of a new nursery, we would like to try other provenances in the world as well. including hybrids, such as globulus x grandis and grandis x urophylla. Wo would also like to place a provenance trial within the plantation site. Oji has an Institute Cor Tree Improvement, which is the largest private organization of its kind in Japan. and from which wo c~tn obtain Cull support. b. Nursery activities For the first year plantation. we would like to purchase seedlings Crom the existing State of E(awaii nursery. [n the ~cond year we may ask the State of Hawaii [o expand the existing State oC Hawaii nursery ur we may choose to establish a new nursery by ourselves. [n either case. we would pmfer to have such nursery located in the Flamakua/North Hilo coast area rather than in Waimea, because oC the better climatic conditions nearer the project site. At this moment wn du not have exact seasonal weather data in our hands. but if pussible• we may consider a comhin:ttiun of container seedlings antl bare rout seedlings. c. Planting desiett and time table :!e are planning the Cullowing pros+tlures Cur the astahlisL,sentof the plantation. let voaroneration Site preparation Mowing left over sugar cane Flipping [o break hard pan (and hard lava) Liming to neutralize soil Weed control by herbicide spray Plant seedlings by manual labor rertilizing twice Cur early growth 2nd vear oneration 2nd year wend control by herbicide spray :3rd application oC fertilizer Site preparation will be clone mostly 6y tractors with rubber tires, except perhaps for ripping, in order to protect any unnecessary damage un the ground. We will try to rip parallel to the contour lines and keep 1:3 Ceet distance between lines. to protect erosion. We will also apply a special land preparation process for [he wet land, such as drainage or mounding. Weed control will 6e [lone by herbicide spray, but we will try to minimize utilization oC herbicide. We will spiry on the ripping line ahuut S feet in width. We will nut apply herbicide by aircraft ;praying or at stream sides or other dangerous places, to prevent contamination oC [he water. In our experience. weed control is the most important Cac[or to achieve early growth. (even more important than fertiliyation), su that we will apply weed control process in the 2nd year as well. Planting will he clone by manual labor, but mechanical pl>mting may he introduced in a later year. The spacing will be 1:3 Ceet x f.f feet (4mx2m). that we will plant about 50f seedlings per acre. Considering possible innutrit.ious soil conditions clue to the past. sugar cane operation. we will try to apply fcrtilizt:r :3 times in the first'l years. Un the uthor hand wo will keep monitoring to avoid excessive nutrient su as nut w affect the laral environment. L w~:'9.31~~3~ d. Erosion control measures we mentioned above. we will try to minimize damage un the ground. try to rip and plant parallel to the contour line. and in any other case iCa special measure is necessary, we will make our best effort to protect erosion. e. Riparian protection widelines We will plant on former sugar cane lands. excluding steep area: or stream slopes and riparians, Cor the protection oCerusion and natural vegetation. f. Road construction and maintenance Wo will keep maintaining existing road system, and would like to utilize them Cor plantation and harvesting activities. So far we have nu inu:ntion to construct other additional rorul system. e. Insect and disease control For monitoring and protection against insect, disease and climatic calamities. we will patrol the sites regularly. We will try to minimize utilization of pcaticidus. h. Fire manaeement We will pay close a[luntion to potential tiro hazards. We will take appropriate precaution. including tiro breaks. regular patrol. systematic mpurting system. etc. i. Harvestine operations Harvest will start in the 9th year or earlier. and we hope. we can start to harvest the existing trees earlier as well. Harvest operation will he done basically all year round. su that hauling activities on public roadways will be minimal. Though we have not finalized the details, we are considering to use a system which can minimize ground damage. Cur harvesting operation. We may also considar debarking trues on Cores[ sites. to keep nutrients in the soil. j. Replantine elan We will study wppicc regrowth Cur the 2ntl naat.ion and un, but. if it, is dt•4•rmincd unsatisfac:ury ur iC we can ge; better genetically improved auedlin~s. we will replant. For safety, we have used replanting coats Cnr our calculation ~n this proposal. l~ ]-3 Other activities a. Other species To create landscape buffers, we would plant usher species un front Imes facing public coatis for improved visual impros_iun. Some of these longer term growth species miry be suitable far local saw mill resources. b. Cattle grazing Por the purpose of maximizing land use and minimizing land holding cult. we appreciate the County oC Hawaii plan to pursue interim cattle grazing on idle land. 2. Economic Development Plan 2-1 Narrative of Development Plan All planted trees, excupt fur a small volume allocated to the local saw mills, will be processed into wood chips in Hawaii and will be exported to Japan. Though we have not finalized [he details of processing yet. we art• planning as follows; Harvest contract out to appropriate local contracture Transnorrrtinn contract out to appropriatt• local cunrracurrs Chinning operate by the joint•venture or contract out to local contractors Chin stnraec and shin Io:trlin<_• utilizu the land anti facility ownctl by the Purt Authority xt Kawaihac a. Twe of processing facility Though we have not finalized the details Cor the system anti situ of chipping. we are considering the use of a site at or near the port of Iiaw:tihac. \Ve are also cunsitlering the use of mobile inforest chippers to avoid noise pollution. If we tlo tlecitlc to install :r chipping facility near the port, we may still dob:crk in the forests to keep soil nutrients. b. Market development and utilization [n our project, as buyer of th : rodu^ts created by the project. we can assure [h:rt [he market is completely and auwrnatically se•cun:d. Additionally, there may be ;ome by-products from the pruject which may be utiitzecl luc•allc. c. New Job Creation iVe can expect many benefits such as erosion control and now empluy'ment. :\c fur the new job creation, please refer to our enclosed "Estimate oC New Jub Crcntiun " (APPENDIX 1). From the first year we will start [his pruject with annual planting Icvcl at :3.127 acres, the constant employment Cor planting activities, converted to annual base, is estimated to he 55 persons. And the constant employment fur harvesting and processing activities, converted to annual base, is estimated to be 74 persons. Also please note that these estimates oC new jobs to bu creatvtl arc "direct" jobs, relating specifically to the project. More new jobs will indirectly bo created in support industry and other business. d. Small independent Prowers Depending on the available land and other conditions. we may be able to accomodate small independent growers growing trees in the pruject area. Elowever, in theso cases we need separate arrangements with them and perhaps with the county if the county is involved. In addition. iC small land owners grow pulpwood on their land or on leased lands. we would be able to purchase these trees or lugs at fair market price provided that the. species and quality arc acceptable to u s. 2-2 Forest area and wood volumes to support production 1'he yield we arc expecting at our own plantation is 2.824 C['T (under [3;trk)/acre. Unless we start harvesting earlier, we will he able to supply at 8.3'L7A00 CFT (3.125 arses) in nth year and beyond from only our own plantation which will be the base volume to support the processing facilities. 2-3 Development costs a. Plantation establishment and maintenance costs Estimated operation costs ;tre also atuu:hod in Appendix 2 "Summary of I;stimatetl [nwme and Expense" and more dertiled annual schedule. arc in Appendix :3 "Detailed Calculation Sheets". The costs, excluding !and Ic;tse cult. for the first 24 years (first 2 rotations) arc as follows: I ~~J~Sa~3"~w'~5~7. (U ~'['1' : 'U(1OUSS~ For total For 4.400 acre, 2s.oao acres Plant.inc costs 24.702 •1.:363 (Direct costs Cor establishment and replantin,•) Other costs :3.043 b36 (Supervision, Public relation, Security. Insect & disease control ctcJ Administ.ratinn costs :3100 563 (Mann:cement oC the field work) Peal nronerty taxes 1.7:52 :305 (usS4.U7/rtcro fur the planted area Crum the start up to Che completion of [he harvest oC [he pruiectJ Overhead 9.:300 l.C,:37 (Overall mana;;ement uC the project) Total 43.073 7.404 Ahove figures tlo not include inflation Cacturs, interest on loans. income taxes antl Genorxl oxcisc tax. b. Investment on vrocessine facilities As we mentioned before. the harvest and transpurtatiun opcr:uiun will be [funs by local contractors. There Core, our direct construction investment will be a chipping facility and the motlerniiation oC the existing ship footling Gccility. Our rough estimate of these costs will he as follows; Chinning Facility S'2.000.000 Lrrulin~_ Parility SLS00.000 We estimate the planted trees will become harvestahle at the 9th ye:v ur earlier. The actual range will ha Crom six years minimum to nine years maximum. We must finalize a concrete plan Car processing facilities well in :ulv;cncc of harvesting Lho pnalucts. If we can successfully acquire existing standin;; timber. of courso. the timing will br Much earlier. antl the creation of more new jobs will be e: 'ier a8 well. 2.4 Development schedule We have a revised development schedule described below at this moment. Peh -Mar. 97 Discuss and determine basic project scheme including business arrangement between land owners and Oji/iViarubeni. Anr.-.Jun. 97 Perform detailed feasibility study and duo diligence with a land owner and ?nalize project plan. [n the same period (Mar.-Jun. 9~: Organize plantation managemt:nt personnel (or party) Prepare necessary documents to establish joint-venture company. Order seedlings Cor the first year. Jun. 97 Establish joint-vcnwrc company ("0/M Joint Venwrc"). [f 0/M Joint-Venture decides to use another organization as a management party. conclude consignment or agency agreement _ with such party. Son. ~7 Start to arrange the seedlings Cur first year plantation. 2.5 Ooeratine income and expense proiections Our preferred manner oC financial arrangement hetwcon the land owner and the 0/M Joint-Venture would he by way of a straight lease and royalty. We have prepared assumptions and have calculated the expected income and expense of the arrangements Cu your consideration (Please refer to the attached "Summary oC Estimated [ncome and Expense" (APPEPIDIX 2) enclosed.). The Terms of our lease rent and royalty are the same as Cor the State "(P R- land, and can he summarizod as follows: The 0/M Joint-Venture and the County of Hawaii would participate in a straight Land Lease (S40/Acrd) and Royalty ($0.60/m :J) Agreement. The County will receive a Gxcd rate of land lease and royalty in this arrangement. rogardless of the performance oC the project. In this arrangement. the county dugs nat h:rvo to worry about any potential share in loss resulting from the upcr:Uiun. During the first 15 years oC the lease, the axed rent shall be S40/acre Cur each acre actually planted. Land !^a,.e rent should be re-oponcd Crom S40lacre every 10 yca~s after first fifteen yea •s. i.e. years 1G - 25, lG - 35. etc. 1'hcreCore, we will adjust the land lease at the 15th year for the 1G ro 25 year period of the lease tcrrtt. and at the '?:ith year fur the 2G to :3S year period oC the Ieasc term. The adjustment of the land lease should be done by appraisal bared upon the market value of (ands leased Cor the plantation oC pulplogs on [he island of F[awaii in the applicable time period. The following is our suggested plan of [he Gsed Icase rent. L-I5 years S40/acre/year Cor the planted acres lf•25 years adjusted by appraisal 'ZG:35 years adjusted by appraisal :3G-55 years adjusted by appraisal (2 options to extund Icasc at 10 years per option) [n addition to payment of the shove ["fixed rent, the O/M Joinc Venwrc would pay the County royalty equal to 50.50/m3 of 0!M's harvested trees, calculated at the time oC harvest. Oji will assure the O/N1 Joint-Venture oC purchase of the products. 2-& ~roiect Finance Plan We will establish the 0/M Joint•Venture in Hawaii. All the expcndituros fur the project will be paid by the O/M Join[•Venture. The O/ivl Joint-Venture will he funded in a Corm oCequity and debt at each project year equal to the expectod expenditure fur the following year until harvest revenues off-:et thu expenses. The equity portion will be invested by the parent companies, and [he debt portion maiy bt• ohuined by the O/M Joint•Venture itself. but most likely will he financed by the parent companies. APPENDIX 1. (_stimate of New Job Creation ) 1.Plantino (men/veari for 3,125 Acres 1st Rotation 2nd Rotation 1 2 9 10 Planting , Planting Mowing 2 . Ripping 4 _ Liming 3 Spraying. 3 3 Planting ~ 7 7 • Fertilizing 10 5 10 5 • Hvst Cleaning 4 - Security etc. • 2 2 Supervision 1 1 • Sub Total . 32 8 2=. 5 Nursery 15 ~ 15 Total 47 8 33 5 2. Harvest - Shio Loadino (menWearl Chipping at Kawaiha_ (ex-Capital Chip Site) Harvest Volume : 2,824rn3/acre under ba't Chio in Loss : 2%, Shrinka a 3% 3,125 Acres Remarks Harvest 34 7,OOOcft=2.5 Acres/Crew, 6 Lo gets/Crew, 250 Days/Year Log Hauling 12 • 25 Ton/Truck, 4 Times/Day Chipping Chip/Debark 4 Z Men/Shift Log Yard 6 3 Men/Shit ~ ~ • Mai~t~nance ~ ~ 4 2 Men/Shift, Maintenance ~ Knife Grainder Office ` 4 Mill Manager, Foreman, Clark, Accountant - : ' - Sub Total •18 Chip Hauling 5 25 T^n/Truck, 10 Times/Day Port Yard 3 Ship Loading ? 30,000-40,000 ToNShioment 6 Men/Shift, i2 Shifts/3hipment Total 74 3. Estimate of Nsw Job Creation for Ezch 1'z2r to establish 25 OCO zcres o(antation 1 2 3 4 5. 6, 7 ~ B Plantation Area(Acre) 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 Harvest Area(Acre) Planting 47 55 .55 55 ~ 55 55 55 55 . Logging -Ship Loading Total ~ 47 55 55 55 55 65 55 55 9 10 11 12 13 14 15 16 PlantationArea(Acre) 3,125 3.125 3,125 3,125 3,125 3,125 3,125 3,125 HarvestArea(Acre) 3,125 3,125 3,125 3,125 '3,125 3,125 3,125 3,125 Planting 47 44 44 44 44 44 44 44 Logging -Ship Loading 74 74 74 74 74 74 74 74 Totaf 121 118 118 118 118 118 118 118 Remarks This estimate is based on new plantaticn only. ~ ~ . If we could include utilization of the exis::;.g forest, we Hill be able to expect much more earlierjob creation. ' This estimate does not include chip mill a::~ loader construction, nor does it include support service. A P P E N D~ X 7 (Su-rarv of Estinate~ Intone arc' Ex ns ) 1~Calculation Base s'Plantation area :Project total 25. 000 'acres :The County land, 9,900 acres ~2rotation:24years--:Actual operation may be perpetual. This 2 rotation example is only for calculation purpose. . jst- 8th year :Planting 9th- 16th year :Harvest & Replant 17th- 29th year :Harvest• 1<YicId:HAI 353cft/year (under bark)/ acre x $years = 2.829cft/acre (under bark) ':No inflation is considered for either Incase or expense; IIlnterest rate 7% per year flncame Tax 45% per year IJoint-venture debt equity ratio 70:30 ~Oividend :100$ only for calculation purpose 3Revenue: - - Sales Price as per attached Stumpage Price calculated 6y FOB Market Price comparable . to similar woad chips: (at this moment Silracel/South Africa Eucalyptus Chips) SExpenditure: Land rent USS40/acre/year for net plantnble area (excluding roads etc-) until completion of 2nd harvest on each site, Excluding property tnx• Property Tax ltSS4.07/acre/year for net plantabie area (excluding roads etc•) until completion of 2nd harvest on each site Planting cost as per attached Other cost Supervision,Pu6lic.Relation,Security, Insect d vermin Control etc, Letter sent to: Kekba Camp Association Haina Community Assocu,ation Rural South Hilo Community Association Pauka'a Community Association Honomu Community Association Kukuihaele Community Association Paauilo Community Association Paauhau Community Association Ookala Community Association North Hilo Community Association Pepeekeo Community Association Ahualoa Community Association Pa paikou Community Association Hamakua District Development Council Friends of Hamakua