BUSINESS PROFILE (The Maple Syrup Company)

The Maple Syrup Company is a partnership between two established Smith Island farmers; namely; Mr. Peter MacLean and Mr. Douglas MacMillan. The owners intend to utilize available woodlots to process sap into pure maple syrup products.

Data complied by the Smith Island Department of Forestry indicates that the best areas of sugar maple concentration is found in the Breadalbane/Rose Valley areas of Smith Island. The Company's operations will be in Breadalbane, Smith Island, located at the MacMillan farm.

The Company will be owned 50 % by Mr. MacLean and 50% by Mr. MacMillan. Mr. MacMillan will assume the overall lead role in the operations and Mr. MacLean will assist in the daily operations including sugarbush management, labour associated with the installation and maintenance of the pipeline and the processing of the sap. Mr. MacLean will also contribution initial capital to the project.

Peter MacLean and Douglas MacMillan both realize they have a valuable resource that is currently not being utilized. Furthermore, and just as important, both acknowledge that woodlots on Smith Island are slowly giving way to the ever increasing demand for farm land. The decline of the Smith Island forest contributes to more water run off and wind erosion. This contributes to additional problems with the river systems on Smith Island.

In the Central Station area, woodland is generally clear cut in order to grow potatoes. Land which is rented to supply a potato rotation can earn approximately $100. per acre annually. Woodlands, on the other hand, do not generate any income unless they are cut off. By creating a maple syrup industry on Smith Island, woodlot owners could realize an income flow and still retain their woodlots.

The primary objective of The Maple Syrup Company is to establish a viable maple syrup industry on Smith Island. By doing so, additional revenues will be realized by the Company and it will contribute to retaining and preserving a natural resource. Additional woodlot owners can recognize the value of the maple syrup industry and we anticipate some will become involved in the industry rather then clear cutting and destroying such beauty.

Mr. MacMillan is the owner of a substantial maple woodlot (approximately 150 acres). See Appendix #1 for aerial photo. Mr MacLean also has available a maple resource, however, his woodlot will not be developed within the time period covered by this plan.

There are other woodlots adjacent to Mr. MacMillan's that will be leased. The leasing of adjacent woodlots will reduce the costs associated with the necessary pipelines and add to the required gravitational flow of the sap to the sugarhouse which will be located at Mr. MacMillan's farmyard.

Douglas MacMillan currently operates a beef farm and has a cow/calf operation. He also grows various grain crops and harvests large quantities of hay. He was born and raised on the family farm and continues to live there. He has been responsible for the family farm operations for over 20 years. He is also a licensed electrician.

Peter MacLean, until 1998, owned and operated a prosperous dairy operation. He has disposed of his dairy herd and has converted his operation to beef farming. Mr. MacLean is a third generation farmer and has over 25 years experience in the operation of the family farm. Mr. MacLean attended University of Smith Island where he was enrolled in business administration. He discontinued his education in year two to assume full responsibility of the dairy farm. He also grows grain crops and soybeans.

Both partners work very well with one another. This truly benefits both their operations, especially during the busy planting and harvesting seasons. Together, they purchase and share equipment in order to keep costs to a minimal. This cooperation has been in place as long as each have been farming. Both know the meaning of hard work. This new maple syrup business venture will simply be an extension of the arrangements they have shared over the years.

MacLean and MacMillan have both spent substantial time in their respective woodlots. They are experienced chainsaw operators and knowledgeable in good woodlot management.

Both partners have others assets as outlined in Appendix #2. These assets will be available to the Company, however, they will not form part of the financial statements in this business plan as they are recognized assets of each partners own separate farming operation.

The timing of the sap run (March/April) is ideal for both partners as it is otherwise a slow period of time on their farms. It will not cause a disruption in the need for equipment, as for the most part, the equipment sits idle during this time period.

We recognize we currently lack some of the required expertise to conduct this business without direction from experts in the industry. Because of the large capital commitments (detailed later), we intend to start on a small scale and, in the beginning, hire qualified consultant(s) to assist in various segments of the maple syrup business.

Discussions have already commenced with three key individuals that have years of experience in the maple industry. The final decision on consultant(s) will be made once the final decision is made on the specific equipment we incorporate in our facility.

The Maple Syrup Company intends install 2,000 taps in year one, 5,000 in year two, and 10,000 in year three. In year four the company plans to double its production by adding an additional taps to bring the total to 20,000. In year five, we plan to remain at the 20,000 tap level.

During year one and two, at the 2,000 and 5,000 tap level, management feels they can handle all the duties required in the tapping of trees and processing of raw sap. Management is of the opinion they can accomplish this without any disruption to their existing enterprises.

In year three, we will hire one employee for a period of ten (10) weeks. This employee will receive $8.00 per hour and be scheduled to work a 50 hour week.

During year four and year five we will hire two (2) employees over the same ten (10) week period.

The employees will be responsible for going to the woodlots to ensure all taps are in good working order, hauling sap from holding tanks to the sugarhouse. The employee(s) will also assist with duties within the sugarhouse.