TORONTO, Dec. 10 /CNW/ - Sino-Forest Corporation ("Sino-Forest") (TSX:TRE
and TRE.S), a leading commercial forestry plantation operator in China, is
pleased to announce the signing of an agreement to acquire 150,000 hectares of
plantation trees in Guangxi Province through Sino-Panel (Asia) Inc.
("Sino-Panel"), its wholly-owned subsidiary. The Master Agreement for
Acquisition of Pine and Fir Forest ("Agreement") is with Zhanjiang Bo Hu Wood
Company Limited ("Bo Hu"), which will act as the authorized agent for the
original plantation rights holders.
Under the Agreement, Sino-Panel will, through the PRC subsidiaries of
Sino-Forest, purchase 150,000 hectares of Chinese fir and pine trees in
Guangxi Province with a price not to exceed RMB380 per cubic meter (m(3)) or
approximately US$51.40 per m(3) over a 5-year period. The plantations under
Agreement include mature trees with an estimated wood fibre yield of 100 m(3)
to 120 m(3) per hectare, or an aggregate 15 million m(3) to 18 million m(3) of
wood fibre. In addition to securing the tree acquisition price, Sino-Panel has
pre-emptive rights to lease land at a price not to exceed RMB525 per hectare
per annum for 30 years. The land lease is up to 50 years as permissible under
the PRC laws and regulations after harvesting. The specific terms and
conditions of such purchase or lease are to be determined upon the execution
of definitive agreements between the PRC subsidiaries of Sino-Forest and Bo Hu
upon the authorisation of the original plantation rights holders, and subject
to compliance with the relevant PRC laws and regulations.
Sino-Forest Chairman and CEO Allen Chan said, "We are very pleased to be
able to lock-up a significant volume of standing timber and secure this
long-term lease in Guangxi given the area is becoming more expensive in this
strategic location in the southern coastal region of PRC and the favorable
climate and rich soil are conducive to generating fast-growing, high-yield
species. Harvested land will be re-planted with eucalyptus and we are
confident that we could attain an average yield of 150 m(3) after a 6-year
cycle. Moreover, we have a 12-year track record of growing eucalyptus and
operating successfully in this region."
Guangxi is becoming one of the key provinces in PRC as it is close to the
port of Beihai - one of the State Council's approved and established Export
Processing Zones ("EPZ"). In addition, Beihai is one of the few key ports
located in south-China, close to nearby ASEAN (Association of Southeast Asian
Nations) countries, benefiting from favourable tax incentives of importation
and re-exportation to other countries. Prior to this Agreement, Sino-Forest
had approximately 129,000 hectares of plantation in Guangxi under management
as of third quarter 2007.
Mr. Chan added, "Sino-Forest has acquired 5.5 hectares of land with an
estimated covered area of 100,000 square metres in Beihai's Export Processing
Zone, which could accommodate engineered-wood production and other value-added
processing. The strategic location of this facility in the EPZ synergies with
our domestic plantation fibre and imported timber from nearby countries then
process into high-quality, engineered-wood products, and sell to domestic
markets or export to other countries."
About Beihai and the Export Processing Zone in Guangxi
Beihai's strategic geographic position is becoming increasingly important
and distinct in the economic development of China's southwest and the
Asia-Pacific region. In 1984, Beihai became one of the first of 14 coastal
port cities to further open its businesses to the world trade.
An Export Processing Zone (EPZ), which is somewhat similar to free trade
zones are economic or development areas of a developing country, where tariffs
and quotas are eliminated or reduced and bureaucratic requirements are lowered
so as to attract additional business and foreign investments. China's EPZs are
approved by the State Council and supervised by Customs. Goods may be brought
into these zones without formal declarations having to be made or the need for
payments of duties on goods that are being re-exported after processing.
Trade between Guangxi and the ASEAN has expanded; Guangxi's exports to
Vietnam, Indonesia and Singapore has accounted for 77.5%, 6.5% and 4.9%
respectively of total export to ASEAN, and imports to Guangxi from Vietnam,
Singapore and Thailand have accounted for 87.3%, 3.6% and 3.4% respectively of
total imports from ASEAN.
About Sino-Forest Corporation
Sino-Forest Corporation, a Canadian company, is a leading commercial
forestry plantations operator in China. The company started its operations in
1994 and is the first foreign and privately managed operator involved in
forest products in China. Its principal businesses include the ownership and
management of forestry plantation trees and sales of standing timber, wood
logs, and complementary manufacturing of downstream engineered-wood products.
The Corporation's common shares trade on the Toronto Stock Exchange under the
symbol TRE since 1995.
Please note: This press release contains projections and forward-looking
statements regarding future events. Such forward-looking statements are not
guarantees of future performance of the Company and are subject to risks and
uncertainties that could cause actual results and company plans and objectives
to differ materially from those expressed in the forward-looking statements.
Such risks and uncertainties include, but not limited to, changes in China and
international economies; changes in currency exchange rates; changes in
worldwide demand for the Company's products; changes in worldwide production
and production capacity in the forest products industry; competitive pricing
pressures for the Company's products and changes in wood and timber costs. All
amounts in US dollars are translated at a rate of RMB7.39 to US$1.00.
For further information:
For further information: SINO-FOREST CORPORATION, Toronto, Dave Horsley
- Senior Vice President & Chief Financial Officer, Tel: (905) 281-8889, Email:
email@example.com; Hong Kong, Louisa Wong - Senior Manager, Investor
Communications & Relations, Tel: +852 2514 2109, Email: