China International Trust and Investment Corp (Citic) is to pay US$200m for 35 per cent of Fletcher Challenge Forests, the second largest forest owner in New Zealand, Shanghai Daily said. The purchase is being made through South East Asia Wood Industries Holdings, which is 40 per cent owned by Citic.
Citic Group Executive Director Mi Zengxin said that his company was investing in New Zealand because of the competitive nature of its forestry industry. "We know these trees will make money for us," he said.
South East Asia Wood Chairman Peter Kwok said that the holding was being made purely as an investment and that it made economic sense for China to buy its logs on the international market rather than ship them back to China from Citic's overseas forest holdings. Citic already owns forests and cutting rights in the US, Canada and Chile. China imported 60m cubic metres of timber in 2001, with Russia as the largest supplier.