Dec 10, 2007. /Lesprom Network/. Sino-Forest Corporation, a one of the leading commercial forestry plantation operators in China, announced the signing of an agreement to acquire 150,000 hectares of plantation trees in Guangxi Province through Sino-Panel (Asia) Inc., its wholly-owned subsidiary. The Master Agreement for Acquisition of Pine and Fir Forest is with Zhanjiang Bo Hu Wood Company Limited, which will act as the authorized agent for the original plantation rights holders. Under the Agreement, Sino-Panel will, through the PRC subsidiaries of Sino-Forest, purchase 150,000 hectares of Chinese fir and pine trees in Guangxi Province with a price not to exceed RMB380 per cubic meter or approximately US$51.40 per cubic meter over a 5-year period. The plantations under Agreement include mature trees with an estimated wood fibre yield of 100 cubic meter to 120 cubic meter per hectare, or an aggregate 15 million cubic meter to 18 million cubic meter of wood fibre. In addition to securing the tree acquisition price, Sino-Panel has pre-emptive rights to lease land at a price not to exceed RMB525 per hectare per annum for 30 years. The land lease is up to 50 years as permissible under the PRC laws and regulations after harvesting. The specific terms and conditions of such purchase or lease are to be determined upon the execution of definitive agreements between the PRC subsidiaries of Sino-Forest and Bo Hu upon the authorisation of the original plantation rights holders, and subject to compliance with the relevant PRC laws and regulations. Sino-Forest Chairman and CEO Allen Chan said, "We are very pleased to be able to lock-up a significant volume of standing timber and secure this long-term lease in Guangxi given the area is becoming more expensive in this strategic location in the southern coastal region of PRC and the favorable climate and rich soil are conducive to generating fast-growing, high-yield species. Harvested land will be re-planted with eucalyptus and we are confident that we could attain an average yield of 150 cubic meter after a 6-year cycle. Moreover, we have a 12-year track record of growing eucalyptus and operating successfully in this region." Guangxi is becoming one of the key provinces in PRC as it is close to the port of Beihai - one of the State Council's approved and established Export Processing Zones ("EPZ"). In addition, Beihai is one of the few key ports located in south-China, close to nearby ASEAN (Association of Southeast Asian Nations) countries, benefiting from favourable tax incentives of importation and re-exportation to other countries. Prior to this Agreement, Sino-Forest had approximately 129,000 hectares of plantation in Guangxi under management as of third quarter 2007. Mr. Chan added, "Sino-Forest has acquired 5.5 hectares of land with an estimated covered area of 100,000 square metres in Beihai's Export Processing Zone, which could accommodate engineered-wood production and other value-added processing. The strategic location of this facility in the EPZ synergies with our domestic plantation fibre and imported timber from nearby countries then process into high-quality, engineered-wood products, and sell to domestic markets or export to other countries." About Beihai and the Export Processing Zone in Guangxi Beihai's strategic geographic position is becoming increasingly important and distinct in the economic development of China's southwest and the Asia-Pacific region. In 1984, Beihai became one of the first of 14 coastal port cities to further open its businesses to the world trade. An Export Processing Zone (EPZ), which is somewhat similar to free trade zones are economic or development areas of a developing country, where tariffs and quotas are eliminated or reduced and bureaucratic requirements are lowered so as to attract additional business and foreign investments. China's EPZs are approved by the State Council and supervised by Customs. Goods may be brought into these zones without formal declarations having to be made or the need for payments of duties on goods that are being re-exported after processing. Trade between Guangxi and the ASEAN has expanded; Guangxi's exports to Vietnam, Indonesia and Singapore has accounted for 77.5%, 6.5% and 4.9% respectively of total export to ASEAN, and imports to Guangxi from Vietnam, Singapore and Thailand have accounted for 87.3%, 3.6% and 3.4% respectively of total imports from ASEAN.