China's Shengyang scoops up Gabon timber firm

LIBREVILLE (Reuters) - China’s Shengyang Group has finalized its purchase of French timber firm GEB in Gabon, completing a Chinese takeover of an industry once controlled by firms from former colonial power France.

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 French since independence in 1960.

Some in Gabon are concerned about the environmental impact of newfound Chinese dominance of the timber industry.

After six months of talks, Shengyang inked its 68 million euro ($87.28 million) purchase of GEB, Gabon’s No. 3 timber firm on Wednesday, a year after Chinese businessman Guohua Zhang bought Plysorol, Europe’s No. 1 plywood manufacturer.

Plysorol also 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.

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.

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.

($1=.7791 Euro)

Reporting by Phal Gualbert Mezui; writing by David Lewis