The 12-year deal will see Inner Mongolia Forest and Timber Resources Company Ltd (EJV) and Erlianhot Lianhe Forestry Bureau supply logs and sawn timber.
EJV will supply Sino-Forest with an annual volume of at least 1.5 million m3 of logs and sawn timber, which will be acquired from the forestry bureau. The bureau will supply the wood itself in circumstances where EJV fails to make deliveries.
Sino-Forest and EJV also intend to jointly manage a regeneration programme of secondary forests in order to improve yield and conserve species grown in the Inner Mongolia Autonomous Region.
“This large-scale, long-term wood fibre agreement brings Sino-Forest an important step closer to reaching our strategic goal of 15-20 million m3 of annual fibre ouput in China, compared to to our current supply of 8 million m3,” said Sino-Forest chairman and chief executive officer Allen Chan.
He said the deal and regeneration programme reinforced the company’s leading position in sustainable forestry and plantation management in the country.
