Chinese firm buys timber concession

[PHNOM PENH POST]

Cambodia has granted Chinese timber company Shengda Wood a 22,600-hectare timber concession in Kratie and Strung Treng provinces, officials said.

The Shenzhen Stock Exchange-listed company would export wood from the 70-year concession to supply a depleted market in China, Li Jie, a management official in Sichuan, told the Post, although he declined to disclose the price of the concession.

Despite China’s austerity measures aimed at reining in its overheated real estate market, Shengda chairman Jiang Changzheng said concessions abroad would play an important role in fuell-ing the country’s domestic market.

“Domestic demand [in China] has only just now been ignited. Although real estate is facing short-term government control, it still has great potential for solid demand,” he said last week in an interview with Securities Times.

The company would do some value-added processing on its wood products in Cambodia, which was expected to create local jobs, Li Jie said.

Final processing will be done in Shanghai, and finished wood will sell for at least US$1,600 a cubic metre, according to Securities Times.

Gao Hua, president of the Chinese Chamber of Commerce in Phnom Penh, said Shengda was one of several Chinese companies to recently receive land concessions in Cambodia.

Thinning resources at home did not completely account for the number of incoming companies, Gao Hua said, nor did the much lower capital required for such ventures in Cambodia.

Preferable climate and business conditions attracted Chinese investors in search of land concessions, he said.

According to a company announcement, Shengda acquired three concessions totalling 22,600 hectares. Two concessions are in Kratie province’s Sambo district, and one is in the Se San district of Strung Treng province.

All three concessions previously belonged to Chinese nationals, according to the Ministry of Agriculture, Forestry and Fisheries’ website.