CFGC has been importing timber globally to meet the rapid growing demand of timber consumption in China. As encouraged by the “going global” policy, the Group has established procurement networks with 21 countries and regions to broaden its procurement channels. Aside from the sourcing enhancement, the Group has also been actively seeking for opportunities for the acquisition of forest resources to ensure a stable and secure supply of timber to feed its continued growth. The Group is currently in possession of over 30 forests across New Zealand, amounting to 29,000 hectares of plantation on around 42,400 hectares of land, of which about 6,700 hectares of land is available through harvesting right or rental agreement. Additionally, the Group has also obtained the exclusive selling right of the forests owned by Hong Kong Greenheart Company in New Zealand, which has enabled the Group to become the most influential foreign forest enterprise in New Zealand. The continuous expansion of its global footprint has also led to a successful comprehensive strategic cooperation with RFP (Far East Forestry), the largest timber corporation in Russia, to further develop forest resources in Russia. Furthermore, CFGC has been persistently building networks to ensure a stable and secure supply of timber via direct procurement and gaining exclusive selling right in countries and regions rich in forestry resources, such as the United States, Canada, Gabon, Suriname and etc. As a result, CFGC has secured supply of timber from around 18 million mu of forest lands around the world as of Sep 2020. The Chinese government announced Commercial Harvest Exclusion Policy in 2015 with the intention of prohibition on commercial logging of natural forests, which has provided numerous opportunities to global forestry enterprises. CFGC has benefited from the policy which has created increasing reliance on timber imports and needs for domestic production of merchantable timber. Therefore, the Group has been actively participating in the afforestation projects in Leilin, Cenxi and Chongqing which would help to secure the future supply of domestic merchantable timber. The Group possesses approximately 865,000 mu of forests land in Zhanjiang Guangdong and Cenxi Guangxi. It is the largest plantation forest in southern China and is the leading eucalyptus chip supplier in China. Furthermore, CFGC has formed partnership with the Chongqing Municipal Government on a forest reserve base project to build a 5-million-mu national forest reserve. The reserve base will be an ecological barrier in the upper reaches of the Yangtze River.
CFGC’s geographic expansion has been focused along the Sino-Russian border, the Yangtze River and the coastline of China in view of lowering the logistics costs of timber transportation, which accounts for a significant portion of total cost. The strategy reduces price transmission of logistics costs to the downstream supply chain. It allows the Group to maintain its sustainable competitive advantage in timber trading and operation of industrial Park. Suifenhe Guolin Wood Industry Park and Manzhouli Yilito Park, which are both developed by CFGC, are served as pilot projects for the Northeast Asia forestry industry to showcase successful timber trading and processing with Russia. In addition, CFGC has been developing industry clusters by integrating ports of Rugao, Xinminzhou, Rongsheng and Chongqing Western Timber Trade, together with Ruichang Huazhong Timber Park to achieve synergies to serve economic integration in the Yangtze River Delta. The Group has fully utilized the ports’ vast hinterland by transforming them into industrial parks. A “Port-Park” model is a new concept for the integration of timber supply chain and industrial chain. The innovative "Parks+" strategy has successfully attracted thousands of small and medium timber products enterprises to the industry clusters. It has helped with the transformation and upgrade of the forestry industry in China.
CFGC has formulated the “Lakes +” strategy which integrates the Group’s forestry, tourism, and forest therapy businesses. This integrated approach to the development of tourism, recreation, forest therapy, ecological fishery and green catering is an innovative idea derived from the “two mountains” theory raised by General Secretary Xi. Founded on the success of the pilot project of Qiandao Lake AECO fishery (Aquatic Ecosystem Conservation Oriented Lake Fishery), the Group has built a complete industrial chain that consists of aquaculture, marketing, processing, gastronomy, tourism, and cultural creativities. The pilot project has become a paradigmatic example for the development of eco-fishery in China. The success story of the project has been selected as an academic case studies for the lecturing of “two mountains” theory in the Party School of the CPC Central Committee since Jun 2019. CFGC’s ecological approach to lake development over the years has evolved into a replicable and promotable business model. It enables geographic expansion of the “Lake +” strategy. The development strategy of the expansion can be concluded as “Ten lakes learn from one lake and ten lakes lead to a hundred lakes". The success of the Qiandao Lake ACEO fishery project has attracted local governments to establish strategic cooperation with the Group for the development of Poyang Lake in Jiangxi, Fushui Lake in Hubei, Limu Lake in Xinjiang etc.
Overview of CFGC
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