Guangzhao Industrial Forest has used tissue culture to breed a strain of poplar -- whose fibre is used to make paper -- that can mature in four to five years, less than half the 10-12 years it normally takes to grow in the wild.

The rate of maturity for the "Guangzhao Fast-Growing Poplar" is faster than poplar breeds cultivated in North America which can take six to seven years, officials of the Singapore-listed company told AFP.

And in a recent breakthrough, Guangzhao Industrial Forest scientists successfully tested a poplar strain with a high salt-tolerance level, allowing the plant to be grown in China's vast arid lands.

The success is significant for the company because China has wide tracts of land which are either too salty or arid for most forms of cultivation.

With most provinces willing to offer these barren lands for cultivation without cost, Guangzhao Industrial Forest can saturate wide areas with its poplars virtually for free, company officials and industry analysts said.

The company expects to fell the first mature poplars, up to 12 metresfeet) high, next year for sale as timber to pulp companies.

This should boost earnings currently derived from selling seedlings and saplings for reforestation purposes.

Company executives hope their unique business model will help meet China's paper demand while at the same time aid in reforesting the country, where only 17 percent of the land is covered by forests.

China ranks as one of the world's top five consumers of paper and pulp products. In 2003 it accounted for 16 percent of global paper and paperboard consumption.

And being the world's second largest timber importer, China's enormous appetite is also hastening the destruction of Southeast Asian and Siberian forests, environment experts said.

"At the moment, China imports 95 percent of its pulp needs. With the economy booming, the demand for paper is rising quickly as well," said Guangzhao Industrial Forest chairwoman Susan Su.

Its imports mainly come from Southeast Asia, New Zealand, Russia and Brazil.

"Deforestation is growing globally at an alarming scale," Su said, adding that the answer could lie in using biotechnology to grow trees faster.

Backed by a team of scientists, Guangzhao Industrial Forest has been doing research at its laboratory on the outskirts of Shanghai since it was founded in 1999.

The company has planted more than 14 million poplar saplings in the provinces of Shanxi, Jiangxi, Guizhou and Shandong for eventual sale as timber.

Separately, the company hopes to start large-scale cultivation of its salt-tolerant poplar variety in China's arid lands in 2005.

The company's environmental mission could be traced to its founder, former student revolutionary Jack Song, 51.

In 1969, at the height of the ultra-radical Cultural Revolution, the then teenage Song left school and, fired up by the thoughts of Chinese leader Mao Zedong, worked in a communal farm in northern Heilongjiang province.

"I was involved in the cutting of trees for eight years. That gave me a deep understanding of the environment," Song told AFP in an interview here.

"After I cut so many trees, I knew what logging can do to the environment. So now, I'm paying back society by growing trees."

The turning point came in 1998 when Song, who became a businessman after a stint as a magazine deputy editor, was watching gripping television images of the flooding of the Yangtze river.

Hundreds of people perished and homes were swept away during the historic flooding largely blamed on deforestation and soil erosion.

"I knew something had to be done to stop deforestation but at the same time balance it with commercial success. I knew that a unique approach was needed," Song said.

Raising start-up capital of 50,000 renminbi (6,000 US dollars at current rates), Song turned to scientists in China experimenting with tissue culture and Guangzhao Industrial Forest was born.

One of the company's scientists is Xia Zhen Ao, China's top expert on tissue culture and a member of the Chinese Academy of Sciences, Song said.

Industry analysts are bullish about the company.

DBS Vickers Securities in Singapore said in a research note the company "is a unique long-term play on the growing demand for paper in China and the lack of wood fibre domestically.

"With its fast-growing poplar generating returns sooner than common hybrids, the group is well poised to enjoy firm earnings growth followed by strong, sustainable cash flows from fiscal year 2006 onwards."

Kim Eng Securities added: "The group is merely at the nascent stages of its growth and we expect the huge demand for paper products in China to sustain its growth for many years."

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