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Source: Reuters

China's Shengyang scoops up Gabon timber firm

Published: 19 Aug 2010 17:26:03 PST

* Chinese firm scoops up French timber company in Gabon

* Sale underscores Chinese dominance in sector

LIBREVILLE, Aug 19 - China's Shengyang Group has completed the purchase of French timber company GEB in Gabon, completing a Chinese takeover of an industry once controlled by firms from France.

After six months of talks, Shengyang inked its 68 million euro ($87.3 million) purchase of GEB, Gabon's No. 3 timber firm on Wednesday.

The watering down of French interests in Gabon fits with President Ali Bongo's aims to diversify industries and investors in the oil-producing nation, which has maintained close economic and political ties with the former colonial power since independence in 1960.

But some environmental activists in Gabon are concerned about the impact from Chinese dominance of the timber industry.

The GEB deal comes a year after Chinese businessman Guohua Zhang bought Plysorol, Europe's No. 1 plywood manufacturer, which owns two other leading timber firms in Gabon, leaving Chinese firms as the main operators in the country.

According to the deal, Shengyang will now control 1.47 million hectares of Gabonese forest and inherit the firm's forestry equipment. Neither of the firms made any statement during the signing ceremony.

Forests, which cover about 85 percent of the country, are seen as a potentially vast economic asset for Gabon, though experts say major reforms must be enacted for this to happen.

Marc Ona Essangui, a respected Gabonese campaigner who won an environmental prize last year for his work challenging Chinese plans to open an iron ore mine in the jungle, expressed concern about the environmental impact of the deals.

"By the time it is noticed, it will be too late to repair the damage," he said. Gabon, a tiny Gulf of Guinea nation, has long pumped hundreds of thousands of barrels of oil per day, but Bongo is seeking to wean the economy off its reliance on oil as fields mature and reserves diminish. ($1=.7791 Euro)

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