Sino-Forest Signs Long-term Tree Acquisition Agreement in Fujian Province



    TORONTO, Aug. 11 /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 200,000 hectares of
non-state-owned, plantation trees in Fujian Province through Sino-Panel (Asia)
Inc. ("Sino-Panel"), its wholly-owned subsidiary. The Master Agreement for
Acquisition of Pine, Chinese Fir and Eucalyptus Forest ("Agreement") is with
Zhangzhou Lu Sheng Forestry Development Company Limited ("Lu Sheng"), which
will act as the authorized agent for the original plantation rights holders.
    Under the Agreement, Sino-Panel will, through PRC subsidiaries of
Sino-Forest, purchase 200,000 hectares of trees in Fujian with a price not to
exceed RMB350 per cubic meter (m(3)) or approximately US$51.40 per m(3) over a
10-year period. The plantations under Agreement include mature trees with an
estimated wood fibre yield of 100 to 120 m(3) per hectare, or an aggregate 20
to 24 million m(3) of wood fibre. In addition to securing the maximum tree
acquisition price, Sino-Panel has pre-emptive rights to lease land at a price
not to exceed RMB450 per hectare per annum for 30 years. The permissible land
lease term is up to 50 years under 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 Lu Sheng 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
sign another long-term agreement that locks up a significant volume of
standing timber. Over the past two years, we have locked up a total 950,000
hectares of standing timber, including this Fujian deal, at an agreed maximum
acquisition price per cubic metre. This is beneficial to Sino-Forest as we
expect demand for fibre and its market price to grow continuously and
steadily."
    Allen Chan added, "Fujian is strategically located along the coast of
south-east China and we have been operating in this province since 2001. Our
intention is to apply our forestry management expertise to convert
low-yielding plantation forest to fast-growing, high-yielding plantations, and
to establish an integrated upstream plantation and downstream manufacturing
operations similar to our base of operations in the south-west China. This
will enhance economic development and local employment, which aligns with the
Central Government's 11th 5-Year Plan."

    About Fujian

    Fujian is strategically located along the coast of south-east China, next
to Zhejiang, one of the major, wood-product manufacturing hubs in China, and
facing Taiwan across the straits. It stretches from the Yangtze River Delta to
the north to the Pearl River Delta to the south with a vast hinterland. The
total land area of Fujian covers 121,400 square kilometres. The province has 9
major cities and is subdivided into 84 counties. Largely made up of mountain
and hills, Fujian is ranked first nationwide in terms of forestry coverage
(approximately 62% of land area). Fujian has a subtropical climate, with warm
winters. In January, temperatures in the coastal regions average around 7 to
10 degreesC and 6 to 8 degreesC in the hills. Average annual precipitation is
1,400 to 2,000 mm. The province has a total population of approximately 35
million.

    About Sino-Forest Corporation

    Sino-Forest Corporation is a leading commercial forestry plantation
operator in China. The Canadian company started its operations in 1994 and was
of the first few foreign and privately managed operators 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 RMB6.85 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:
davehorsley@sinoforest.com; Hong Kong: Louisa Wong, Senior Manager, Investor
Communications & Relations, Tel: +852 2514 2109, Email:
louisa-wong@sinoforest.com

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