Cathay Forest Products plans to continue its growth in China and Russia by “adding valuable forest assets to its portfolio”.
In August, Cathay acquired 51% of Russian company DalEuroles, which owns 270,000ha of standing timber in Khabarovsk, adding it to the company’s existing “fast growth, high-yield” operations in the Shandong, Jiangsu, Heilongjiang, Henan, Jiangxi, Hanan and Guizhou provinces of China.
Cathay said that its acquisition in Russia, coupled with further purchases, should help it to overcome roundwood supply shortages in China and allow it to become “a world-class forest products company”.
“The focus of the company is to build a world-class forest products company serving a customer base that includes Chinese-based pulp and paper companies and timber harvesting customers which in turn supply a variety of wood products industries in China,” said Cathay.
The company added that it will “require new funding” in order to carry out the planned growth, with the recent introduction of “favourable policies for forestry companies” by the Chinese government, including the removal of the forest levy and full or partial exemption of corporate income tax, aiding Cathay with its growth.
