Yihua Enterprise (Group) Co Ltd, China’s leading listed timber company that has stretched beyond borders for its forest resources, has stated its intent to aggressively expand its business in Africa with a US$1 billion investment in Gabon, located on the continent’s west coast.
The company, based in Shantou, Guangdong, signed an agreement with Gabon’s government on the joint development of the African nation’s timber industry. The projects in the pipeline include more deep processing factories, an international timber trade centre, and a timber museum.
Over the years, Yihua has come far from its roots as a furniture workshop, developing into the conglomerate that it is today, covering a broad spectrum of businesses ranging from healthcare all the way to real estate.
It holds two listed companies, Yihua Healthcare and Yihua Life. Yihua Life, a leader in the furniture design and manufacturing sector in China, acquired a Gabonese timber company including all its resources and 350,000 hectares of forested land in 2012, in its initial and vital step into exploring the African market.
Vice Chairman and General Manager of Yihua Life, Liu Zhuangchao, stated that the business deal was advantageous for both Yihua and Gabon, and revealed that Yihua invited the prime minister of Gabon to visit China in June in order to discuss the details of the deal.
“Gabon urgently wants to make good use of its timber resources to boost its economy. Our cooperation with the Gabonese government meets their demand, so we have their support to implement the agreement as soon as possible,” Liu told China News Service. “Yihua will continue to focus on Gabon for its African business, since the country has a relatively stable political situation. We will invest US$1 billion on the projects in the agreement and will add more as our cooperation expands.”
Since acquiring the timber company in 2012, Yihua has pumped US$150 million into Gabon.
Yihua has constructed four timber processing factories – two for deep processing – in the African nation. The deep processing factories employ over 1,000 local workers and can produce 400,000cbm of timber per year.
To assist Gabon’s industrial push, Yihua will invest in the two deep-processing factories, with plans to increase the yearly capacity from 400,000cbm to 600,000cbm.
President of Gabon, Ali Bongo Ondimba, visited China in December, and during talks, President of China, Xi Jinping said that China backed Gabon’s initiative to hasten its industrialisation and transform the nation’s rich and advantageous resources into value-adding results.
Xi also said that China is inviting domestic companies to take an active role in Gabonese infrastructure projects.
According to Liu, alongside the timber business in Gabon, Yihua is also looking to enter the elderly care, medical care, and real estate industries.
Yihua also recently signed a deal with the city government of Libreville, Gabon’s capital, to institute a strategic partnership in order to develop the metropolis’ healthcare, infrastructure, and social housing sectors.
As China continues to advocate the Belt and Road initiative, Yihua has been striding ahead in the business expansion the past few years under the campaign, and that includes Gabon.
Yihua Life, according to Liu, is also selling the furniture produced in 35 countries and regions internationally under the Yihua brand name. In the United Kingdom, Liu continued, one in four – or 25 per cent of – lounge suites sold there are now produced by Yihua.
In 2016, Yihua also acquired HTL International, a furniture manufacturer based in Singapore, for US$265 million.
“The purchase is a big stride for a privately owned Chinese [company], but we will continue to increase global investment in the housing and lifestyle sectors,” Liu said to China News Service. “The Chinese government encourages privately owned companies to venture overseas, especially to the economies along the Belt and Road.”
Sources: China News Service, Feng Shuang