Barter Bulletin

With a $14 million investment literally tied up in the ground, Armidale Management Development Centre Pty Ltd (Banalasta Oil Plantation) was faced with the question of how to promote its products without further cash borrowings. The answer was simple: Bartercard.

The 6,000-hectare (14,500-acre) Banalasta property, situated north west of Bendemeer (just off the New England Highway), has been owned by the Blickling family since 1979. Originally a sheep farm, the property has diversified in recent years, beginning with the establishment of the Banalasta Oil Plantation in 1997. The operation is Australia’s largest Eucalyptus radiata (Australiana) plantation with about 400,000 working trees; spread over 260 hectares (600 acres).

Further diversification took place in the years following, with the establishment of a vineyard in 1999 – which now boasts 16,000 vines – and lavender in 2001 (currently comprising 12,000 plants).

According to Armidale Management Development Centre Pty Ltd Operations Manager John Wynan, the property’s diversification had taken its toll on the company’s cash flow.

‘”All up, our investment in Eucalyptus oil, grapes and lavender ran to about $14 million”, John explained.

“It can take at least five years to start seeing a return on these kids of ventures, which is a long time to have your money literally tied up in the ground.

When we were eventually in a position to start marketing our finished products, we were faced with a simple question: How do we do this without borrowing further cash?”

The answer for the Armidale Management Development Centre Pty Ltd came when it met with Bartercard’s North West Brokerage in May 2003.

With the help of the North West Brokerage and a Bartercard interest-free line of credit, Armidale Management Development Centre Pty Ltd was able to use Trade Dollars to embark on a major building project to market its products – the now iconic local tourist attraction, the Banalasta Visitor centre.

The cost of establishing the Banalasta Visitor Centre, which incorporates a coffee shop, wine tasting area, retail shop and a Banalasta showcase area, ran to $150,000. In total, $90,000 worth of the project was accounted for using Trade Dollars. John was able to source Bartercard Members to draw up the architecture plans as well as carry out much of the physical building of the centre.

Many local Members, as well as Members from further a field, were involved with the establishment of the centre [Leon Murray Building (building), Blekton Propriety Limited, Architectural Drafting Services (plans), Old Koreelah Timber Co., PBS Air-Conditioning and Refrigeration (air conditioning), TD's Paint Spot, Kooti Al and Glass (windows), Worldwide Retravision (kitchen appliances), 5 Star Application (labourer), Dillions Plumbing, Favero Electrical, Coffee Bean Roasting House (cafe access), Kwik Kerb Tamworth (garden edging), Pendergast Transport (freight), Agrahire (lawnmower), McKechnie Bros Hardware, Allsopp Signs (signage), Hermann Tiles].

The centre, which opened in November 2003, now hosts about 1,000 visitors a month and turns over $20,000 cash in product sales each month.

“Considering how much of our initial investment was accounted for using trade, and how much we’re now turning over a month in cash, you can appreciate just how far ahead we are through our Bartercard membership”, John said.

John said that Armidale Management Development Centre Pty Ltd had also found a host of ways to use Bartercard in Banalasta’s everyday business transactions.

“We’re been able to use Trade Dollars to pay for our roadside advertising, printing and stationary”, he said. “We’ve even found we can use it in ways we didn’t think possible. We’ve been able to buy sheep, rams and farm equipment on barter.”

“In most instances, we’ve endeavoured to source the goods and services we need on trade through the local membership, which is good news for the local trade economy. But, on the occasions that we haven’t been able to source materials locally, it’s nice to know there’s a vast and diverse Membership out there capable of delivery just about anything you need at any given time.

John in part attributed Armidale Management Development Centre Pty Ltd’s success in the Trade Exchange to its willingness to obtain a comprehensive understanding of Bartercard’s operation. He said that of equal importance were the North West Brokerage’s needs and expectations.

“When we first put our business plan to the Brokerage, they were fully supportive of what we wanted to achieve with the visitor centre”, John said.

“Brokerage Manager Kim Hawksford has continued to support us and make an effort to understand us and make an effort to understand what our business us all about. In business, if you don’t have a good working relationship with another party, the relationship simply won’t work out. It’s no different with Bartercard. The Brokerage sets itself the task of delivery what we need, and we set ourselves the task of making sure we know how best to access the opportunities on offer through the Trade Exchange.

John said that while having the backing of Bartercard and a local Brokerage is crucial in creating trading opportunities, it was equally important for members to take a “hands-on” approach in order to make the most of Bartercard.

“We received a great deal of support from the Brokerage when setting up the visitor centre, but by the same token we took a lot of the responsibility on ourselves”, John said.

“We have certainly come out in front on the project, but it just didn’t fall into place. We had to go out and make it happen, engaging in direct dialogue with a number of Bartercard Members who we identified as having the capacity to help us. The more we learn about the workings of the Trade Exchange, the better equipped we’ll be to continuing winning with Bartercard.”

In terms of advice to fellow business people considering taking out Bartercard membership, John offered to the following:

“If anyone in business is looking to improve or enhance their operation, it is certainly worth exploring the advantages of the trade economy. Like anything else in business, you need to understand how Bartercard works before you can make it work for you. But in my experience, once you understand how it works, you simply can’t go wrong making it work to your advantage.”

The Banalasta Story
Banalasta is a property located just off the New England Highway, halfway between Sydney and Brisbane and near the pretty township of Bendemeer.

The one family has owned Banalasta for over 25 years. Its total area is nearly 6,000 hectares or 14,5000 acres in the old scale. The property features three large dams and manly smaller dams and eight houses.

Today, Banalasta operates a diverse range of farming operations, from sheep and cattle to eucalyptus and lavender, as well as grapes. The higher altitude and cooler climate coupled with the sandy granite type soils make farming a challenge.

The establishment of the Visitors Centre last November allowed Banalasta to open its doors to the public, in order to showcase its achievements and products.

Eucalyptus
A chance ‘listen in’ to a radio program back in 1996 revealed that Australia was actually importing more than 90 per sent of its Eucalyptus oil use.

Although the Eucalypt is mostly native to Australia, the Government in the 1950s helped many third world countries in agriculture by giving them millions of Eucalypt seedlings for their hardwood.

These days, a by-product of their industry is the oil from the leftover leaf, which we still import very cheaply.

Six years ago Banalasta started its own Eucalypt plantation – not for timber but solely for oil.

Out of 750 Eucalypt varieties – and with a lot of research, a special species – the narrow leaf peppermint (Eucalyptus radiata) – was selected. It is far superior and smaller, so different to the common Eucalyptus seen and used by most of us. Six years ago almost one million seedlings were planted in rows and were fed water through more than 1,000 kilometres of pipes.

Well over half were lost in the first few years – mostly through frost (Eucalyptus radiata, while producing the finest oil, suffers from the severe winters on the tablelands and the small trees need to survive the first few years to toughen up to the conditions.

Harvesting
The trees (or bushes) are cut when they reach between two-to-three metres in height. They are cut about a half-metre from the ground and are expected to re-grow ready for harvesting again the next year if the weather conditions are favourable. Being in plantation format, a forage harvester is used to drive through the trees cutting them at the right level.

The trees are gobbled up by the harvester and put through a chipper and sent through a hopper into a stainless steel bin on the back. Each bin takes about 200 trees (about 800kg leaf and twig) and when full sent back to the distillery for processing. The bin is placed in a steam bath distiller with a condensing unit attached to the back. The condenser turns the steam with the Eucalyptus in it back to liquid. One and a half hours of boiling will give about 12 litres of oil, depending of leaf content. The oil is used in Banalasta’s own products as well as for export.

There are only a handful of Eucalyptus Oil Producers in Australia and Banalasta is proud to say its oil is now officially recognised as organic.