Brochure

Ukraine Agricultural Land Investment

Low-entry – just US$1,865 per hectare
High-yield – 415% forecast appreciation after five years
Fully-managed – a hassle-free addition to an investment portfolio

The BBC investigate why buying Ukraine
agricultural land is a must for any
serious investor.

“As fast as the combines can get the wheat out of the fields,
it’s being gobbled up by a ravenous international market.”
Jeremy Cooke, BBC

BBC Newsnight Report, 24th August 2009

In a special report on the food shortages facing the world, Jeremy Cooke,
a top journalist and specialist on agricultural issues, visited the vast
farmlands of Ukraine to report on the huge changes currently taking place
on one of the world’s most fertile but least exploited agricultural areas.

To watch Jeremy Cooke’s report in
full on BBC Newsnight visit:
http://landing.obeliskinternational.com/ags/ukraineframe.php

Contents
4 Why Invest in Agricultural Land in Ukraine?
5 The Investment
6 Investment Model: Wheat
7-8 Why Invest in Agricultural Land?
9 Why Invest in Agricultural Land
& Crops in Ukraine?
10 - 11 An Overview of Ukraine
12 About Aston Lloyd & Eurofarms
13 Purchase Process
14 - 15 Crops
16 Why Buy Agricultural Land in
Ukraine?
17 About Obelisk

Lutsk Kyiv Kharkov
Lviv
Dnipropetrovsk
Donetsk
Zaporozhye

Odessa
Sevastopol
Yalta

3
To find out more about this investment visit:
WWW.OBELISKINVESTMENTPROPERTY.COM


Why Invest in
Agricultural Land
in Ukraine
• Incredibly low entry price – just US$1,865 per hectare.
• Investment with a well-established London-based plc with over €120
million in property currently under management.
• 415% projected capital appreciation after five years.
• Dual-moneymaking opportunity – annual return from harvest profits and
capital gains from increasing value of the land.
• Ukraine’s harvest yield is expected to double over the next five years.
• Fully-managed and therefore worry-free investment.
• Rising world population and higher prices are creating food shortages
meaning the need for additional food supplies is urgent.
• Opportunity to diversify your portfolio.
• Due to increasing oil prices, crops grown for biofuels, such as wheat and
rapeseed, are in very high demand.

4


“The business of feeding the world has emerged as an important
investment theme which should have a place in all well diversified
investment portfolios.” (Baring Global Agricultural Fund)

The Investment
This latest Obelisk recommendation offers several outstanding investment advantages:

• low-entry – just US$1,865 per hectare.
• high-yield – 415% projected capital appreciation after five years.
• fully-managed – a hassle-free addition to an investment portfolio.

The investment involves the purchase of land rights The purchase of land rights offers investors dual
in agricultural land situated in the Crimean Peninsula returns. The land will be planted (as from February/
in Ukraine. Ukraine has one of the world’s richest March 2010) with five different crops (wheat, barley,
and most fertile soils. Around 70% of the country is rapeseed, sunflower and corn) on a rotational basis
arable and Ukraine boasts a significant proportion and harvested. Every January during the investment
of the world’s chernozems (highly-fertile black period, investors receive 30% of the net harvest profit
topsoil). Known as the ‘bread basket of Europe’, from the previous year. At the end of Year 5 of the
Ukraine grows a variety of agricultural products and investment period, the site is expected to be sold
is the world’s 10th largest cereal exporting country, in its entirety to institutional funds, offering investors
although non-intensive farming methods mean that substantial return on their initial investment.
yields currently fall short of potential.
Farmland has recently sparked considerable
Despite its rich soil and agricultural potential, interest among institutions and foreign investors.
land prices in Ukraine per hectare are currently For example, the Baring Global Agricultural Fund
far below those in other key grain-producing launched in January 2009 gained 28.6% from
countries. For example, prices in Argentina range April to October 2009. According to Baring’s
from US$4,400 to US$7,800, those in the US, October 2009 report, “the business of feeding the
US$4,500 to US$11,000 and those in Western world has emerged as an important investment
Europe, US$13,200 to US$32,200. theme which should have a place in all well
diversified investment portfolios”. Investment
Investors purchase the land rights for a minimum of specifically in Ukraine includes Morgan Stanley
one ‘pai’* of prime agricultural land at the very low who bought 40,000 hectares in March 2009 and
price of US$1,000 per hectare (plus legal fees of Landkom International (the UK company featured
$115 per hectare). In January 2010, investors are on the BBC2 Newsnight report) who has leased
required to make a one-off cultivation payment of 115,000 hectares to farm directly.
US$750 per hectare.
* Ukrainian term for an area of land consisting of between 2 and 20 hectares.

5
5

$3,403 per
gain

Investment Model: Wheat

Land purchase Annual projected ROI annual Projected land ROI land
return from harvest yield value per ha value
harvest per ha*
Initial Investment US$1,000
Year 1 US$93 12.4% US$1,920 192%
Year 2 US$125 16.7% US$2,457 246%
Year 3 US$160 21.3% US$3,145 315%
Year 4 US$198 26.4% US$4,026 403%
Year 5 US$240 32% US$5,153 515%

Total US$816 per ha 108.8% 5 year US$4,153 per 415% (241%
equivalent ha gain including $750
cultivation)

Current income projections in the above table are highly conservative in Yield: recent analysis into Ukraine’s agricultural industry
comparison to the 8.6 mt/ha generated in the UK (Scottish Government, 2009) and has found yields (i.e. metric tonnes of produce per ha)
in consideration of projected increases in commodity prices and yields as a result of surging above 2010 projections. The yield is projected
continued investment in the region. to be within 3.5 and 8 metric tonnes per hectare
(Agricultural Marketing Resource Centre, 2009).

Harvest Projections: Wheat
Exit: as a result of expressed interest from institutional
funds, we expect the site to be sold in its entirety after
Potential Crop Price** 5 years, offering significant ROI for investors.

US$205 US$215 US$220 US$230

4 mt/ha US$81 US$93 US$99 US$111
per Hectare***
Metric Tonne

5 mt/ha US$143 US$158 US$165 US$180
6 mt/ha US$204 US$222 US$231 US$249
7 mt/ha US$266 US$287 US$297 US$318

* Based on a combined projected wheat price and crop yield increase.
** Based on projected wheat price released by Chicago Board of Trade, November 2009.
*** Based on a potential yield growth of between 3.5 and 8 mt/ha (USDA, 2009).

6


“The bottom line is that the world’s population is going
up and food supply is going to be more of a problem.”
(Professor David Pink from Warwick University and
interviewed on BBC2 Newsnight)

Why Invest in
Agricultural Land?
Agricultural produce provides the world’s food Prices of agricultural commodities rose to record
and as long as people need to eat, there will be levels in 2008. At the height of demand, wheat
demand for agriculture. This demand, whether reached US$13 a bushel, its highest price ever,
crops for human consumption or crops for animal with corn costing US$7.50 a bushel. 2008
feed, is consistently growing fuelled by an ever saw record crop yields, which led to a fall in
increasing world population and by changes in crop prices, although the international price of
diet, particularly in China and India. grain has risen strongly since March this year.
Several factors lead experts to believe that
The world’s population is growing at an astonishing prices are likely to continue a steady upward
rate. According to the US Census Bureau, the global trend. According to a report published by the
population reached 6.79 billion in November International Food Policy Research Institute in
2009. The UN expects the world population to rise October 2009, climate change means crop prices
by 33% by 2030 when it will reach 8 billion. The will rise spectacularly by 2050. For example,
Food and Agriculture Organisation (FAO) projects wheat prices are expected to increase by 194%,
that the world will need an additional 1 billion maize by 153% and rice by 121%.
tonnes of grain by 2030.
“The bottom line is that the world’s population
The world’s appetite is changing too. As wealth is going up and food supply is going to be
increases in the world’s largest countries such as more of a problem,” says Professor David Pink,
China and India, so does the desire for a better interviewed on BBC2 Newsnight. In countries like
standard of living, which includes better food. For China and India, grain is not just a commodity
example, demand for meat among the Chinese but also a strategic material.
and Indian fast-expanding middle classes has
grown hugely over the last few years. Therefore,
the demand for animal feed has also grown,
which in turn has led to rises in crop prices.

7
5


The Facts

Wheat yields (2008/2009) projections
9
8
Crop yield (mt/per ha)

7
6
5
4
3
2
1
USDA, 2009
0
y e y e a S. a
UK an nc ar ai
n in U. tin
er
m Fr
a ng Uk
r Ch ge
n
G Hu Ar

Potential wheat yields: Current versus obtainable yield
9.0
8.0
7.0 Current

6.0 Obtainable
5.0
4.0
3.0
2.0
World Bank, Ukraine’s
1.0 response to the global
0.0 food crisis. May 2008
y ne y ia il a a
an ai
A ke tin ni
m r US Tu
r i op az n a
er Uk Eth Br ge nz
G Ar Ta

8
3


Why Invest In
Agricultural Land
& Crops in Ukraine?

Known as ‘the bread basket of Europe’, Ukraine has In 2008, a European Bank for Reconstruction
a long-standing tradition of agricultural production. & Development (EBRD)/FAO report identified
Home to rich fertile soil with an abundance of Ukraine along with Kazakhstan and Russia
chernozems, Ukraine is 70% arable land and as three of the few countries where both an
is currently the world’s 8th largest exporter of expansion of arable land-use and considerable
wheat and ranks 10th for overall cereals exports. intensification could take place without serious
According to World Focus, “the perfect balance of environmental consequences. According to the
sunshine and rainfall on Ukraine farmland means it report, these three countries could have a crucial
is bursting with marketable products”. impact on the world food situation. Professor Ian
Crute, Director of Rothamsted Research (the UK’s
The forecast for yields and production of major largest agricultural research centre) says that
grains (e.g. wheat and oilseeds) in Ukraine for “prospectively, Ukraine is becoming an important
2009 are excellent. As of early November, Ukraine source of food supplies”.
had harvested almost 45 million tonnes of grain.
Farming practices and grain storage facilities are
Ukraine is a grain-producing country with huge currently under major improvement in Ukraine in
potential to produce more (see Table 3 on page order to increase agricultural output. This is known
8). At a time when the world’s demand for food as the ‘catch-up effect’, and Ukraine’s harvest
is increasing dramatically, Ukraine is, according yield (metric tonne per hectare) is expected to
to the World Bank, “in a position to make a more than double over the next five years.
significant contribution to the international effort to
deal with the food crisis”.

9


Known as ‘the bread basket of Europe’, to the international effort to deal wi
Ukraine has a long-standing tradition of food crisis”.
agricultural production. Home to rich fertile
soil with an abundance of chernozems, In 2008, a European Bank for Reco
Ukraine is 70% arable land and is currently & Development/FAO report identifie
the world’s 8th largest exporter of wheat and Ukraine along with Kazakhstan and
ranks 10th for overall cereals exports. as three of the few countries where
an expansion of arable land-use an
The forecast for yields and production of considerable intensification could ta
major grains (e.g. wheat and oilseeds) in without serious environmental conse
Ukraine for this year are good, with wheat According to the report, these three
production expected to reach the highest could have a crucial impact on the
levels since 2002/03. Acreages and yields food situation.
of all crops are predicted to increase on last
year’s. Farming practices and grain storag

An Overview of Ukraine
Ukraine is a grain-producing country with
huge potential to produce more (see Table
are currently under major improvem
Ukraine in order to increase agricu
output. This is known as the ‘catch-u
?? on page 5). At a time when the world’s and Ukraine’s harvest yield (metric
Ukraine’s economydemand for food is increasing dramatically, In common with the is expected to more than d
saw growth was 7.9%.
hectare)
vast majority
of nations worldwide, Ukraine experienced a
extraordinary growth between to theslowdown last year, althoughover thewas still years.
Ukraine is, according World Bank, “in
growth
next five
a position to make a significant contribution
independence and 2007 when 2.1%. In its Economic Update in October 2009 on
Ukraine, the World Bank predicted 2.5% growth in
GDP growth was 7.9%. In 2010. The EBRD is predicting 3%. These predictions
common with the vast majority of vastly improved growth are based on Ukraine’s
strong export market comprised mainly of steel,
of nations worldwide, Ukraine chemicals and grain.
experienced a slowdown last year,
Ukraine became independent from the former
although growth was still 2.1%. Soviet Union in 1991 when a democratic republic
was established.
With an area of 603,700km2, Ukraine is Europe’s
second largest country and has a population of
Improvements in the political situation led to
around 45.9 million. Located at the crossroads of
the IMF Mission to Ukraine in October 2009
east-west and north-south trading routes, Ukraine
reporting that the economic and financial situation
enjoys an ideal position for exports, which is
in Ukraine is stabilising. The IMF has allocated a
enhanced by high-tech transport infrastructure.
US$16.4 billion loan to Ukraine.

Ukraine’s economy saw extraordinary growth
between independence and 2007 when GDP

10


Ukraine became a member of the World Trade
Organisation in May 2008 and belongs to the
EU Eastern Partnership (EP), an alliance similar
to a customs union. EP membership has allocated
Ukraine €494 million in EU funds between 2007
and 2010. In addition, in late October 2009, the
EU Commission agreed a loan of €500 million
to Ukraine. Discussions for membership of NATO
are well advanced and Ukraine aspires to EU
membership within the next few years.

Ukraine’s property market expanded hugely
between 2002 and 2007, particularly in the
capital, Kyiv. The capital’s property market
remained stable during 2008, although the house
price increase of 7.2% was the lowest since
2003. In common with property markets globally,
Ukraine has been affected by the economic
slowdown. However, property in Donetsk,
Kharkiv, Kyiv and Lviv is expected to receive a
boost from the UEFA Euro 2012 matches held in
these cities.

Ukraine’s tourism is currently under-developed,
although expanding fast. According to the World
Travel and Tourism Council (WTTC), the tourism
sector in Ukraine will see real growth of 6.4%
annually over the next decade. The WTTC ranks
Ukrainian tourism 20th in the world in terms of
growth. Ukraine received nearly 25.5 million
visitors in 2008, a massive 10% increase on the
previous year.

11


Aston Lloyd About
& Eurofarms
This latest Obelisk investment recommendation is
backed by firm credentials, affording the investor
peace of mind along with excellent returns.

Owners of the lease on the land in Ukraine are
Aston Lloyd Agri-Commodities Ukraine, a Ukraine-
registered limited liability company (LLC). This LLC is in turn owned by Aston Lloyd Agri-Commodities Ltd, a
subsidiary of Aston Lloyd Holdings plc, a London-based property development and investment company.

Aston Lloyd Holdings plc brings over 30 years property investment experience to this low-entry investment and
the company currently has a property management portfolio of over €120 million. Specialising in emerging
markets, Aston Lloyd’s existing portfolio includes residential and hotel developments in Bulgaria, Northern
Cyprus, Slovakia and Turkey.

Managing operations and cultivation of the farmland in Ukraine
is Eurofarms LLC, a Ukraine-based farm management company.
Eurofarms’ responsibilities include farm management, the
implementation and supervision of modern technology, constant
monitoring of the land, optimum soil conservation and the
timely sale of agricultural products at the highest profit.

Eurofarms’ principal strategies are to improve productivity
and yield, to control grain storage facilities (vital for flexibility
in pricing) and centralise key processes and control. These
strategies will increase yield and therefore profitability from the
land.

Eurofarms has a highly experienced team of experts and advisors. These include the Chief Executive Officer,
Richard Rozwadowski who brings more than 30 years’ farm management experience to the project. Richard’s
expertise includes heading a major EU project to develop supply chains in Ukraine and advising FAO in
Ukraine. Eurofarms LLC’s economic advisor and market analyst is Dr Sergey Feofilov, managing director
of UkrAgroConsult, a leading Ukrainian agricultural economic and market research company. Further
information about Eurofarms is available on the company website: www.eurofarms.com.ua.

12


Purchase Process
Invest between 9th November and
31st December 2009 at US$1,000 January 2010
per hectare1 One-off cultivation fee of US$750 per
(plus US$115 per hectare legal fees) hectare to be paid²

January 2011
Harvest profit paid to investors4 February/March 2010
Crop plantation begins

September 2010
Crops sold at market
price3

July/August 2010
Crop harvesting
commences
1.Investors must purchase at least one ‘pai’consisting
of 2 to 20 hectares.
2.In any force majeure event (e.g. drought, flood, disease or
insect attack), investors will be required to pay an additional
recultivation fee, which will not exceed the cultivation fee.
3.Time of sale and volume of produce sold is strictly dependant
on market conditions and will be based on when the highest-
market price can be achieved.
4.Investors will receive 30% of the net profit from
the harvest.

13


Crops
Ukraine’s fertile soil lends itself perfectly to the cultivation of a number of crops, all of
which are vital soft commodities. The following five crops will be grown on the
farmland on a rotational basis* (essential in good farming practice):

Barley

Barley is a main source of animal feed and is also used for malting
and health food. Demand for barley is increasing along with
the demand for animal feed (developing nations such as China
and India are eating more meat). Since the per kilo beef /crop
production ratio is 1:7, barley will continue to be in high demand.

Barley is the fourth most produced crop in the world and is known for its
strong yields. Drought-tolerant, barley also has a short growing season.

Current market price: 130.7 (US$/mt)**
Current futures price: 153 (US$/mt)***

Maize

Maize (corn) is the most widely grown crop in the world. This cereal
grain is mainly used in food production, particularly industrialised
food as maize is a major source of starch. Maize can also be used
to produce biofuel and as such is in high demand.

Current futures price: 214.2 (US$/mt)***

Rapeseed

Rapeseed is an important source of vegetable oil (like sunflower
oil, it can help reduce cholesterol levels), animal feed and biofuel.
According to USDA, rapeseed is the world’s third most-produced
vegetable oil and the second source of protein meal.

Rapeseed production is increasing annually and 2008 saw record
levels of rapeseed production.

Current futures price: 1,561 (US$/mt)***

14


Crops
Sunflower

Sunflower is a highly versatile crop. It is used for vegetable oil,
margarine and animal feed. Sunflower also produces latex and
research is advanced in the use of sunflower as an alternative to
hypoallergenic rubber. In addition, sunflower is a ‘carrier oil’ for
bio-diesel production.

Sunflower has a short growing season (it can be sown and harvested
after wheat) and is tolerant of summer drought. Sunflower crops also
improve soil quality as they help remove toxic ingredients.

Ukraine forms part of the ‘sunflower triangle’ (along with Argentina and
Russia), the world’s top three producers. The 6.18 million tonnes harvested
during the 2008/09 Marketing year was a record in Ukraine.

Current market price: 1,029 (US$/mt)**
Current futures price NB: No futures market is trading for this crop

Wheat

As the biggest global source of dietary protein and food, wheat is
the world’s most important crop. It is used in thousands of foodstuffs
including bread, breakfast cereals and beer. It is also an animal feed
and is even used for construction material.

Like sunflower and maize, wheat is also grown for carbon-negative
biofuel, considered a vital tool against global warming. For this
reason, many countries are expanding their production of wheat.

Wheat produces high yields and is therefore widely cultivated as a
cash crop. It grows well in many countries including Ukraine and is
one of the crops in highest demand in the world. The variety grown
in Ukraine is mostly Hard Red Winter wheat.

Current futures price: 215 (US$/mt)***

* These crops are provided as an indication of what could be planted. Eurofarms LLC will also monitor market price performance and seed
availability of various other crops to ensure the strongest returns for investors. Therefore it may be necessary to produce a crop not listed above.
** All prices are based on November 2009 figures available from the World Bank Global Commodities Index and USDA, as well as Chicago
Board of Trade. Note, wheat price is based on production of winter wheat, the dominant wheat grade grown in Ukraine.
*** Futures prices based on current global commodities index long-term futures contracts for September 2010.

15


Why Buy
Agricultural
Land in Ukraine?
This farmland investment opportunity offers several compelling reasons to invest:

• Low-entry price.
• High-yield returns on a small investment.
• Opportunity to enjoy annual returns as well as capital gain at the end of
the investment period.
• Global demand for grains is steadily increasing.
• Ukraine has huge untapped agricultural potential.
• Fully-managed and therefore worry-free investment.
• Investment with a well-established London-based plc with a property
management portfolio worth over €100 million.
• Opportunity to diversify
your portfolio.

12
16

About
Obelisk
Obelisk is an award-winning property investment
company, renowned for its expertise in the world
of international property investment. Obelisk
carries out thorough in-house research and
analysis plus compulsory due diligence on all its
recommended projects ensuring that clients are
provided with only the best, financially secure
investments.

For more information visit:
www.obeliskinvestmentproperty.com

Disclaimer

Information contained in this brochure is believed to be correct, but this cannot be guaranteed. Whilst Obelisk makes every
effort to ensure that information herein is correct, it is not to be relied on as a basis of any contract or commitment and should
not be construed as an offer or invitation to invest. No personal recommendation is being made to you and the past is not a
guide to the future. Obelisk does not accept responsibility for any of the content, effects of errors or omissions.

The brochure in its entirely is protected by legislation on intellectual and industrial property and it is forbidden to reproduce,
distribute, publicly disseminate or transform it, except for personal use. It is also forbidden to reproduce, relay, copy, assign or
broadcast, in whole or part, the information contained in this brochure, for whatever purpose and by whatever means.

17

For general and international enquiries: Tel: (0034) 952 820 319 Fax: (0034) 952 825 790
info@obeliskinvestmentproperty.com l www.obeliskinvestmentproperty.com

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