Sino-Forest Corporation

Sino-Forest Corporation

March 30, 2005 13:44 ET

Sino-Forest Corporation Announces Merchantable Standing Volume of Timber at Year End 2004




MARCH 30, 2005 - 13:44 ET

Sino-Forest Corporation Announces Merchantable
Standing Volume of Timber at Year End 2004

TORONTO, ONTARIO--(CCNMatthews - March 30, 2005) - Sino-Forest
Corporation (TSX:TRE) announced today that it has a merchantable
(immediately saleable) volume of 16.5 million cubic meters of standing
timber of various species on 227,000 hectares with trees over four years
old, as at December 31, 2004. This volume was reported in an independent
valuation of the company's forest assets by Jaakko Poyry Consulting - a
reputable, international consulting firm - and the consultants' report
was filed last week on Assuming Sino-Forest sells trees
on 20,000 to 25,000 hectares per year, this inventory represents
approximately ten years of harvesting, excluding the company's Heyuan
acquisition in 2005 and beyond, and excluding any further replacement of
trees sold through either re-planting or acquisition of young trees.

Sino-Forest's previously announced undertaking, involving the
acquisition, sale and re-planting of plantation trees in Heyuan City
(Guangdong Province), is proceeding as planned. The undertaking calls
for the acquisition of 200,000 hectares of mature pine trees over a
two-year period, scheduled to be completed in the first quarter of 2006.
The company expects to sell trees on an average 5,000 hectares per
month, or 60,000 hectares in 2005, and to re-plant fast-growing
eucalyptus trees on the same land over a five-year period commencing in
2006. Sino-Forest estimates that the cost of the trees will be USD $18
to $24 per cubic meter, with a standing timber yield in the range of 30
to 45 cubic meters per hectare and that approximately 70% will be
recoverable. For valuation purposes, Jaakko Poyry conservatively
estimated a similar harvesting yield and a recovery rate of 60%.

In the fourth quarter 2004, Sino-Forest sold approximately 13,569
hectares of mature trees in Heyuan, and produced a return on investment
of approximately 46%. The average standing timber yield from this
plantation area was approximately 45 cubic meters per hectare. The
selling price, and cost, related to this sale was USD $35 per cubic
meter and $24 per cubic meter, respectively.

Sino-Forest Chairman and CEO Allen Chan said, "We estimate that our
strategically significant undertaking in Heyuan will represent the
harvesting of approximately eight million cubic meters of standing
timber over three years, which is in addition to the 16 million cubic
meters identified in the Jaakko Poyry report. Our wood supply is already
substantial, and we intend to undertake other acquisitions in the
future. Sino-Forest raised USD $374 million in global financing, and
generated $119 million of cash flow, in 2004, and the Heyuan acquisition
is immediately cash-flow-positive, so we expect to have sufficient funds
to cover our capital expenditures and consider other tree acquisitions."

Please Note: This news release contains projections and forward-looking
statements regarding future events. Such forward-looking statements are
not guarantees of future performance of Sino-Forest and are subject to
risks and uncertainties that could cause actual results and company
plans and objectives to differ materially from those expressed in the
forward-looking statements. Such risks and uncertainties include, but
not limited to, changes in the PRC and international economies; changes
in currency exchange rates; changes in worldwide demand for the
Company's products; changes in worldwide production and production
capacity in the forest products industry; competitive pricing pressures
for the Company's products and changes in wood and timber costs.


Contact Information

    Sino-Forest Corporation, in Hong Kong
    Kee Wong
    Executive Vice President and Chief Financial Officer
    (852) 2877-0078
    (852) 2877-0062 (FAX)
    Sino-Forest Corporation, in Hong Kong
    Allen Chan
    Chairman and Chief Executive Officer
    (852) 2877-0078
    (852) 2877-0062 in Hong Kong (FAX)
    Sino-Forest Corporation, in Toronto
    Jacques Charbin
    Investor Relations
    (416) 200-5513