China Forestry Commits to Forest Land Development Project
Hong Kong, China, 09 September 2010 -- /PRNewswire-Asia/ -- China Forestry Holdings Co., Ltd. (HKEx: 930), one of the three largest, privately-held, naturally regenerated and plantation forest operators in China, today announced the signing of a nonlegally binding letter of intent with the government of Qiandongnan Perfecture, Guizhou Province, to invest in a forest land development project (approximately 300,000 hectares) with an initial investment of USD 220 million and an initial annual logging target of 800,000 cubic meters.
Upon further confirmation and development of the investment, this project will mark the company's foray in Guizhou's forestry industry. The company will own forest reserves in China's three top provinces in terms of forest resources (the other two being Yunnan and Sichuan).
According to the letter of intent, the investment by China Forestry will be carried out in two phases. The first phase will involve an investment of USD 90 million within two years of the project's commencement, and USD 130 million in the second phase within three years of commencement. The investment will be funded by internal resources of the company.
China Forestry's forest reserves are currently mainly located in Sichuan and Yunnan provinces. The confirmation and completion of the transaction will allow the company to strategically expand to Guizhou Province and optimize the company's forest reserves. The company shall make disclosure in accordance with the relevant requirements of the listing rules once the project is materialized.
Li Kwok Cheong, founder and chairman of China Forestry, said, "I am delighted that the government of Qiandongnan Perfecture has selected China Forestry as its partner for this forest land development project. Through this project, we will be able to expand the size of our forest reserves, which is extremely beneficial for the sustainable growth of our business."
China Forestry is one of the three largest, privately-held, naturally regenerated and plantation forest operators in China in terms of coverage area of owned forest right, possessing forestry rights in respect of approximately 171,780 hectares of forests as at 31 December 2009. China Forestry's business operations are currently focused on upstream timber activities and cover the full timber supply chain from planting of trees, the management and operation of forests and harvesting of forest resources to the sales of logs to third parties. The company has listed its shares on the Main Board of Hong Kong Stock Exchange Limited since 03 December 2009.