GLOBALGREENCHERRY PLCINVESTING INAGRICULTURE GLOBALGREENCHERRY
INTRODUCTIONMaking investment decisions has never beenan easy feat. This is true now more thanever with the complex, fasci...
THE PRACTICALITY OF AGRICULTURE INVESTMENTEmerging Markets and Overall Population GrowthEmerging markets are developing at...
Urban Drift                                                                                   The Urban and Rural Populati...
AGRICULTURE AS A LUCRATIVE INVESTMENTLand Appreciation and Cash FlowWhen investing in agriculture, there is solid potentia...
FACTORS FOR INVESTMENT ASSESSMENTPolitical SituationIn weighing out where and how to invest in agriculture, one must take ...
Transport of CropsOnce crops have been successfully harvested, the quality of regionalinfrastructure comes directly into p...
THE NEW BREADBASKET OF EUROPE     Located in Southeastern Europe, Bulgaria is bordered by Romania to the     north, Serbia...
Bulgaria also boasts an exceptional corporate environment. Historically,Bulgarian farmland investment has achieved returns...
CHERRY PRODUCTIONOver the last ten years there have been major breakthroughs incultivation techniques utilising a method k...
LET’S TALK              To find out more and download the Information Memorandum              with Application Form, pleas...
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Global Green Cherry - investing in agriculture

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At Global Green Cherry, via our website www.ggcherry.com www.globalgreencherry.com, offer potential investors like yourself a wealth of information regarding cherry farming and the exciting opportunities on offer to you.
There are plans underway to exploit agricultural land to be acquired in Bulgaria.
Land Options have been secured over a substantial area of Farming Land with the stated aim of creating shareholder value by growing cherries on a professional scale.

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Global Green Cherry - investing in agriculture

  1. 1. GLOBALGREENCHERRY PLCINVESTING INAGRICULTURE GLOBALGREENCHERRY
  2. 2. INTRODUCTIONMaking investment decisions has never beenan easy feat. This is true now more thanever with the complex, fascinating, and oftenconfusing dynamic of the current globaleconomic environment.Increased market volatility has led to reducedinvestor interest in more traditional equities infavour of alternative investment options. Andwhat could be more productive than farmland?We all need food to survive, and virtually allfood originates from a farm.
  3. 3. THE PRACTICALITY OF AGRICULTURE INVESTMENTEmerging Markets and Overall Population GrowthEmerging markets are developing at an extraordinary pace. More andmore countries are offering their citizens the chance to live a middle-class lifestyle. This is clearly a positive step in terms of well-being, butdoes not come without consequences. There is suddenly an increase innot only demand for quantity of food, but also for its higher quality. Asincome increases more citizens are able to enjoy a more balanced diet,and the demand for fruit and proteins will continue to grow.Further complicating food supply is overall world population growth,which estimates that the world population will rise from around 6.9 billionpeople currently to between 9 and 10 billion people by the year 2050. World Population 10This becomes even more startling when we consider that this increase 8amounts to approximately 200,000 more people on our planet everyday. Billions 6The Food Predicament – Prices and Production 4In order to sustain this elevated population, it will become necessary to 2produce nearly twice as much fruit and grain as is currently being grown, 0 1950 1970 1990 2010 2030 2050clearly a difficult challenge to be faced in the near future. Even assumingoptimal agricultural production at or above average levels, it will clearly Less developed regionsbe difficult to maintain a sufficient supply of fruit and grain for future More developed regions Source: United Nationspopulation levels. In fact, over the last 30 years, production has not beenable to keep up with population as the ratio of kg of fruit and grain per FAO Food Price Indexyear per person has begun to decrease. 250 210Unfortunately, these are not the only factors that are complicating and 170 Nominalwill continue to complicate the world food supply. Food prices have 130 Real*been increasing at an exponential rate in recent years. By mid-2008, 90 50international food prices had skyrocketed to their highest levels in 30 1990 1995 2000 2005 2010years. In December 2010, the FAO food price index rose above its 2008 * The real price index is the nominal price index deflated by the World Bank Manufactures Unitpeak. Not only commodity traders are affected by this trend, but also Value Index (MUV)each and every one of us when paying our daily shopping. Source: Food and Agriculture Organisation3 www.globalgreencherry.com
  4. 4. Urban Drift The Urban and Rural Population of the World – 1950 to 2030 9In 1900, worldwide, there were 6.7 rural dwellers to each urban dweller; Billions 8now there is less than one and projections suggest there will be nearly 7 6three urban dwellers to two rural dwellers by 2025. Cities of the world 5 4have continued to grow until urbanisation has begun threatening the 3 2very food supply that enabled their existence in the first place. This 1has been underpinned by the rapid growth in the world economy and 0 1950 1970 1990 2010 2030in the proportion of gross world product and of the economically active World rural populationpopulation working in industry and services. Currently, not only the World urban population World total populationhighly valuable resource that is land, but also water, is being irreversibly Source: UN Population Divisiondestroyed by urbanisation and pollution.Loss of Arable Land Arable Land per CapitaLand that is especially suitable for growing crops, or arable land, with 5 Metres 2its fragile top 15cm of fertile soil, determines the productivity of ourfood system. Most land is either too dry, wet, steep, or cold for crop 4production, and urbanisation is further complicating this situation. Not 3only does population expansion reduce available cropland per capita, butalso on-going soil erosion and expanding urbanisation continually result 2in the slow but continuous loss of cropland. Annually, millions of acres of 1prime cropland are lost to erosion, salinisation, and waterlogging. Millionsmore are lost as arable land as urbanisation, transportation networks and 0 1960 2005 2030industries take over croplands. The Food and Agriculture Organisation Source: FAOof the United Nations (FAO) reports that already close to 200,000 km2 offertile soil have been destroyed by urbanisation. This will cause furtherincreases in food prices, and farmland will become more valuable.Climate ChangeFood commodity prices are extremely sensitive to even modest climatechange impacts on world agriculture. In a recent study, researchersfound that climate change is expected to dramatically alter global fruitand nut production, as tree crops like pistachios and cherries strugglein the rising temperatures. The study, published in the scientific journalPLoS ONE, predicted that the fruit and nut industries in California,the southeastern U.S., China’s Yunnan province and southern andsouthwestern Australia would be highly affected by global climatechanges in the coming years. The study added that the areas that havealready been affected include Israel, Morocco, Tunisia and the Caperegion of South Africa. The results would of course cause commodityprices to rise drastically.ANNUALLY, MILLIONS OF ACRES OFPRIME CROPLAND ARE LOST TO EROSION,SALINISATION, AND WATERLOGGING.
  5. 5. AGRICULTURE AS A LUCRATIVE INVESTMENTLand Appreciation and Cash FlowWhen investing in agriculture, there is solid potential for healthy returnsfrom various sources. Increases in the price of farmland have beensteady over recent years. Europe has seen prices double, triple, andeven quadruple per acre of farmland since 2004. Productive agriculturalland, with water rights and everything else, wherever in the world youlook, has, over time, outperformed CPI inflation. Cash flow that stemsfrom leased farmland or from the commodities themselves can alsoprovide a substantial return. Investors can reduce risk by renting land tolocal farmers who manage the land and make monthly lease paymentsto owners/investors. Alternatively, cash flow can be augmented bycontracting land managers or investing in funds that manage farmsthemselves. This latter option increases risk, but the benefit of higherreturns in cash flow makes this a lucrative option.A Haven Against InflationIt’s no secret that in recent years, lavish lending practices and over Inflation vs. Farmland Priceleveraging has led the global economy into crisis. Part of the solution tothis crisis has been for governments around the world to increase the Rate of inflationsupply of money. Additionally, interest rates have been brought near zero. Farmland pricesThe near future will most likely, hence, bring higher inflation. Farmlandpricing has performed extraordinarily well during high inflationaryperiods. In the 1970s, fruit prices reached astounding levels during highinflation. Considering the fact that food inflation leads overall inflation inmany countries reflects the elevated demand for soft commodities. Soagricultural investment not only offers protection from inflation, but alsoeven pays you for it. ...AGRICULTURALDiversification INVESTMENT NOT ONLY OFFERS PROTECTION FROMAgricultural land also affords investors the chance to diversify away from INFLATION, BUT ALSO EVENstocks and bonds, as farmland is not highly correlated with these more PAYS YOU FOR IT.volatile asset classes. This provides portfolio stability during volatilemarkets while enhancing a portfolio’s risk adjusted return.5 Let’s talk +44 (0)203 137 6920
  6. 6. FACTORS FOR INVESTMENT ASSESSMENTPolitical SituationIn weighing out where and how to invest in agriculture, one must take intoconsideration the political situation in any given country and how specificproperty laws may restrict investment. Some countries may not permitdirect foreign ownership of farmland whatsoever.Strength and stability of a country’s government should also be analysedespecially when considering investment in emerging markets. Factorsfor evaluation include political risk, economic performance, structuralassessment, debt indicators, credit ratings, and access to bank financeand capital markets.Local Human FactorsLocal public sentiment toward foreign investment, as well as culturaldifferences and matters of language are all crucial issues that needcareful consideration.To make sure foreign investments run smoothly, local residents must seethese ventures in a positive light. If there were any feeling of being takenadvantage of or of intrusion on their territory, the success of any foreigninvestment would be fighting an uphill battle from the very beginning.The consequences of not carefully managing local sentiment couldinclude the reduction or even the total abandonment of the investment. Itis crucial, therefore, that locals fully comprehend that the combination oftheir region-specific understanding and expertise along with the influx offoreign funds can clearly improve their livelihood.From construction companies to hair salons, law firms to restaurants,no matter how much ingenuity, funding, and ability provided byowners, finding responsible and productive employees is always vitalfor successful business operations. Finding, communicating with, andcomprehending the perspective and inclinations of workers in a foreigncountry is a challenge that confronted with patience and sensibility, canand must be overcome. STRENGTH AND STABILITY OF A COUNTRY’S GOVERNMENT SHOULD ALSO BE ANALYSED...
  7. 7. Transport of CropsOnce crops have been successfully harvested, the quality of regionalinfrastructure comes directly into play. Caring for the land and its cropsis a crucial part of any farm’s operations, but up to the point of reapingthe harvest from any season, on a financial level, only expenses havebeen incurred. The potential for profit making begins when grains, fruits,vegetables, or livestock leave a farm. Therefore, quality roads will benecessary for transportation of goods. Larger farms use hefty equipmentthat will also need to be brought to and from the farm.Once it is clear that the local network of roads and highways is THE POTENTIAL FOR PROFITsufficiently effective, the issue of who will be transporting the harvest MAKING BEGINS WHENcomes to the foreground. Sufficient options are necessary for a farm GRAINS, FRUITS, VEGETABLES,to ensure adequate quality and correct prices at this stage of the profit OR LIVESTOCK LEAVE A FARM.making process.The Essential Element - WaterAround 97% of the Earth’s water is salt water from oceans and seas, andunfortunately desalinisation is a very expensive process. Close to 2% ofthe earth’s water is frozen in polar ice sheets and glaciers. This leavesonly a miniscule amount for drinking, irrigation, and industrial use. Thisalready small amount of freshwater is being dangerously depleted. Allover the globe, water is being pumped out of the ground faster than itcan be replenished. China’s Yellow River, which is siphoned off by farmersand cities, has failed to reach the sea most years during the past decade.The green revolution in India was only possible by the installation of 20million irrigation wells. Additionally, India must now dig wells 150 metersinto the earth, compared to just 30 meters 4 decades ago. ...WATER IS BEING PUMPED OUT OF THE GROUND FASTER THAN IT CAN BE REPLENISHED.7 Let’s talk +44 (0)203 137 6920
  8. 8. THE NEW BREADBASKET OF EUROPE Located in Southeastern Europe, Bulgaria is bordered by Romania to the north, Serbia and the Republic of Macedonia to the west, Greece and Turkey to the south and the Black Sea to the East. With a territory of 110,994 square kilometres, Bulgaria ranks as Europe’s 15th-largest country. It has huge agricultural potential thanks to its fertile soil, temperate climate and its key geographical position, with crucial access to the Black Sea and the key markets in the European Union, Commonwealth of Independent States (former Soviet Republics), the Middle East and Asia. The rural regions in Bulgaria occupy 84% of the nation’s total land area while the 2.7 million people living in rural areas account for 32.3% of its total population. Bulgaria joined NATO in 2004 and the European Union in 2007, after the country moved from central planning to a more market-driven system with free movement of capital and the liberalisation of agricultural markets. Bulgaria enjoys both political and economic stability, and the decentralised government is very accommodating to overseas investors. In 2007, the Bulgarian government launched a five-year, €3.2 billion modernisation and development program, aimed at strengthening the agricultural sector. The country is blessed with rich farming and forestry resources. The extremely fertile soil (containing a moderate PH) and temperate climate, particularly around the Black Sea, provide exceptional, high yielding, top quality crops, and make Bulgaria an ideal producer of the most in-demand and lucrative fruit: sweet cherries. The hot season arrives at just the right time for cherry production and the humidity also makes for perfect growing conditions. BULGARIA The season very rarely suffers from frost or other major weather hazards. If properly handled, crops will suffer a very low production loss of 5 to 10%. €3.2 Cherries are a fruit that travels well, and once refrigerated, taste and flavour do not deteriorate easily. BILLION MODERNISATION Although it is one of the newest sources of land for cherry production, AND DEVELOPMENT neighbouring Turkey is already one of the world’s leading producers. Bulgaria PROGRAM is widely recognised as the country with the highest potential for growth as a cherry producer. The price for farmland and labour costs in Bulgaria are also considerably lower BULGARIA than the rest of Europe, with farmers of the same skill set earning an average of €200 in Bulgaria, compared with €1,000 in Western European countries. RURAL REGIONS The operating expenses are also considerably lower than orchards based in other European countries. As a result, the return on investment is much higher in a Bulgarian-run orchard. OCCUPY 84% OF THE NATION’S Farmland average price per acre TOTAL LAND AREANational average 2004 to 2007 BULGARIA $1,263 $1,966 $2,696 $4,871 $5,061 $6,053 $6,923 $14,076 $14,866 $19,119 $23,684 RICH FARMING AND FORESTRY RESOURCES, EXTREMELY s land ny ania FERTILE SOIL AND ia gium land ark and and ma her nce gar in Dem Rom Spa Eng Ger Net Bul Bel Fra Irel Pol Source: blackseaagriculture.com TEMPERATE CLIMATE
  9. 9. Bulgaria also boasts an exceptional corporate environment. Historically,Bulgarian farmland investment has achieved returns that outperform mosttraditional investment assets.Annual yield from Bulgarian cherry investments vs. traditional investments30%25%20%15%10% 30.42% 6.50% 3.52% 2.82% 2.59% 1.23% 0.00%5%0% Bulgarian Farmland 10 year S&P 500 5 Year Money Gold Cherry* Treasury Index CD Market Source: blackseaagriculture.com * Estimate of the DirectorsTHE ADVANTAGES OF PRODUCING CHERRIESCherries are one of the most succulent and sought after fruits on themarket. Due to the premium price they command – with revenues more thandoubling those of most other fruits – cherries have also quickly become oneof the most exciting and lucrative green investment opportunities availabletoday. From early May to late June, average retail prices for cherries are inexcess of €10 per kilo. Cherries also attract far higher prices at productionlevels – more than double that of grapes and almost quadruple that ofapples. Unlike the volatility that is associated with commodities, whichis subject to a lot of futures trading, cherry prices are set locally by theproducers and supermarkets.Although global cherry production has been rising in recent years, it hasfailed to keep pace with the fruit’s ever-increasing demand. According toBelrose, Inc., the world’s leading fruit producing analysts, sweet cherrieshave become the most popular fruit within the U.S. and European markets. CHERRIES ARE ONE OF THEBeyond their delicious flavour, cherries have become widely recognised for MOST SUCCULENT ANDtheir numerous health benefits. They have a high content of antioxidants, SOUGHT AFTER FRUITS ONmaking them excellent agents in helping to fight diseases such as cancer THE MARKETand other cell degradation-related illnesses.Cherries are also very low in calories and have become an important weightloss and weight management tool. A serving of cherries only contains 50-70calories making it an ideal mid-day snack. In addition, the red pigment incherries has a tremendous amount of anthocyanins, making the fruit anoutstanding natural anti-inflammatory. Cherries have been proven to offernatural relief from headaches and joint pain caused from gout, arthritis andjoint inflammation. People suffering from these symptoms are encouragedto drink cherry juice, eat fresh or dried cherries or consume cherry pills.Cherries also contain melatonin, which helps against insomnia and slowsdown the aging process. They are also a rich source of nutrients, vitaminsand minerals, such as potassium, iron, zinc, and copper.9 Let’s talk +44 (0)203 137 6920
  10. 10. CHERRY PRODUCTIONOver the last ten years there have been major breakthroughs incultivation techniques utilising a method known as high-density hydroorchard production (also known as “high density root stock”). Orchardsusing this groundbreaking technique increase plant density by growingcherries directly on the base of the tree itself and not on the branches.This results in higher volume crops with greater production efficiency andlarger cherries. Through the utilisation of the aforementioned productiontechnique coupled with sophisticated handling and transport systemsused to mitigate product perishability, a well-run cherry orchard iscapable of generating a return on investment of over 30% per year! A WELL-RUN CHERRY ORCHARD IS CAPABLE OF GENERATING A RETURN ON INVESTMENT OF OVER 30% PER YEAR!10 www.globalgreencherry.com
  11. 11. LET’S TALK To find out more and download the Information Memorandum with Application Form, please visit: www.globalgreencherry.com If you have specific enquiries, please e-mail us at: info@globalgreencherry.com If you want to talk, call us on: +44 (0)203 137 6920 Shares in GlobalGreenCherry Plc are unquoted securities and may be considered to have more risk than quoted securities and shares. The value of investments can go down as well as up and you may not get back the money you originally invested. The information contained in the document does NOT form a part of any offer for sale or subscription to or solicitation to buy or subscribe for any securitiesGLOBALGREENCHERRY or investment product(s). The document is not a prospectus and/or Information Memorandum and contains no offer to the public for the purposes of theGLOBALGREENCHERRY PLC Prospectus Regulations 2005. The formal terms of thisLloyd’s Building offer are set out in the Information Memorandum and12 Leadenhall Street applications for shares are made solely for that basis.London EC3V 1LP Any forward looking statements set out herein involveUnited Kingdom known and unknown risks, uncertainties and otherT +44 (0)203 137 6920 important factors that could cause the actual results,F +44 (0)203 137 6921 performance or achievements of the Company to differE info@globalgreencherry.com materially from any future results, performance orwww.globalgreencherry.com achievements implied by such statements.May 2012

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