Toronto, Ontario, Canada, 23 June 2008 -- Cathay Forest Products Corp., announces that its Russian Joint Venture, DalEuroles LLC. has received approval from the government of the Russian Federation for a 49-year land lease of an additional 400,000 hectares from the government of Khabarovsk Province. This concession is adjacent to DelEuroles’ current 271,000-hectare concession acquired in 2007. The propose lease is subject to final agreement with the government of Khabarovsk, which Cathay expects to complete next week when two ministers are visiting Toronto.
As previously announced in a press release dated 09 May 2008, the Ministry of Industry and Power Engineering of the Russian Federation has included the DalEuroles LLC as a company included in the list of Priority Investment Projects.
In announcing this agreement, Anthony Ng, CEO of Cathay Forest Products commented that “The acquisition of this additional concession solidifies Cathay Forest Products commitment to the Russian forest industry and demonstrates our ability to work closely with the Russian government with regards to the expansion of the forestry industry in the Khabarovsk Region. With this agreement,Cathay will continue to aggressively pursue its strategy to export forestry products to China and Japan.”
In addition to the acquisition of forestry rights in Russia, Cathay also has signed a distribution agreement with Marubeni Corporation. Under terms of the agreement Marubeni will act as a distribution agent for Cathay to sell, market, and distribute roundwood and other wood products in Japan.
“This is an important agreement for Cathay as it allows us to establish a foothold in the Japanese wood products market by leveraging the established sales and distribution infrastructure of Marubeni, which should provide Cathay with a more favourable profit margin for its products ” commented Anthony Ng, CEO of Cathay Forest Products Corp.
Terms regarding the logistics of transporting Cathay’s wood products from its properties to Marubeni are being finalized.
About Cathay Forest Products
Cathay Forest is a forest products company that, with the newly acquired Russian lease, will manage approximately 700,000 hectares of standing timber properties and fast-growth, high-yield poplar plantations in China and Russia. Cathay Forest is building a world-class forest products company through a customer base that includes the domestic Chinese pulp and paper industry and other wood products customers in the Japanese market.
About Marubeni Corporation
Marubeni is one of the largest trading conglomerates and importers of wood products in Japan. Its Forest Products division engages in all operations relating to paper and pulp, ranging from forestation, production of wood chips and pulp, and suppling wood building materials, to collection of used paper and the manufacture and marketing of paper and hardboard products. Marubeni has the largest market share of the wood chips import business and of the paper and pulp trading business in Japan.