Copyright 2000, Business Wire
September 28, 2000

Sino-Forest Corporation today officially opened its new US$24-million particleboard mill in the Guangdong Province, a major region for furniture manufacturing in Southern China.

The mill has a production capacity of 100,000 cubic metres of international-quality particleboard per year, making it one of the largest facilities in China and the largest facility that uses only plantation wood.

Sino-Forest, a Canadian publicly traded company with operations in Hong Kong and China, is committed to becoming the dominant integrated forest products supplier and leader in practicing sustainable forestry management throughout Asia.

"The opening of this facility is the first step of our whole-tree utilization and value-added processing that will expand our operations from plantation, harvesting and processing to include finished engineered wood products," said Allen Chan, Chairman and Chief Executive Officer of Sino-Forest. "Our vertical integration strategy gives us a diversified revenue base and improves our position in the fast-growing Asian market."

Revenue from the new particleboard mill is expected to be approximately US$10 million for 2000 and US$35 million in 2001. The company expects to earn an average margin of 35 per cent on the products produced in the mill.

Serving as the company's base in Southern China, the new mill will allow Sino-Forest to develop a comprehensive wood-processing facility for a wide range of engineered wood products. China is the world's ninth largest furniture maker in terms of production value, and seventh largest for furniture exports. The Guangdong Province is a major center for China's furniture-making industry, for both domestic consumption and export. Close proximity to this region, combined with the company's ability to access low-cost wood fibre from its nearby plantations, will provide Sino-Forest with cost advantages over other producers in China.

The mill will be upgraded in the next 12 months to add lamination capability. Laminated particleboard products will be the next step in Sino-Forest's vertical integration strategy and will add higher margin products to the company's portfolio.

"Advances in the manufacture of reconstituted wood products have increased demand for engineered wood products by more than 80 per cent in the past ten years," said Mr. Chan. "In addition, it is becoming more important to customers that wood products come from companies practicing sustainable development and responsible forestry practices and not from the cutting of old-growth trees. Our vertical integration strategy also positions us to become the dominant supplier of 'green' wood products in China and internationally."

Sino-Forest Corporation is the first foreign-owned integrated forest products company in the People's Republic of China. Well positioned to become a leader in both the Asian and global markets for its products and "Green Business Practice", Sino-Forest's growing participation in the commercialization of China's vast forestry resources will help to create sustained growth and value for the Company as well as China. Sino-Forest is a Canadian corporation headquartered in Hong Kong. Its Class A Subordinate-Voting shares are listed on the Toronto Stock Exchange under the symbol TRE.a.

Sino-Forest Corporation has updated its website with more comprehensive information about the company. Please visit the new website at www.sinoforest.com. Error: Unable to read footer file.