Cathay Forest Products has commenced planting trees in Jiangsu Province and Jiangxi Province in China four weeks earlier than planned due to favorable weather conditions.

With the beginning of this season's planting, the local government of Tongzhou in Jiangsu Province is compensating farmers whose land is being planted on and who also assist in planting and maintaining the company's trees. For every hectare planted which achieves a survival rate of greater than 90%, the local farmers will receive approximately RMB1,200 per year.

The Province of Jiangsu is striving to reach a goal of 25% green coverage. Planting trees qualifies as green coverage and as such, the government is introducing programs such as the compensation for planting and maintaining Cathay's trees. The area being planted in Jiangsu is part of Cathay's strategy of planting on under-utilized land along riverbanks in prime agricultural areas on China's eastern-central coast. In return for the use of the land, Cathay splits harvesting proceeds with the local farmers. This has been a successful program, allowing Cathay to increase its portfolio of property economically.

The planting in Jiangxi follows Cathay's recently signed agreement to develop a fast-growth poplar plantation along the lakeshore of PoYang Lake in Jiangxi Province. It is estimated that there are more than 100,000 hectares of land available for developing poplar plantations in the area surrounding PoYang Lake. The poplar is intended to be used as feedstock for one of the largest paper companies in China, which has a mill within 100 kilometres of PoYang Lake.

Cathay Forest is a forest products company managing standing timber properties and developing fast-growth, high-yield poplar plantations in China. Cathay Forest says it is building a world class forest products company through a customer base that includes the domestic Chinese pulp and paper industry and harvesting customers serving a variety of wood product industries.