Two major international companies will spend $60 million in Western Australia over the next ten years on commercial tree plantations.
Premier Carmen Lawrence said today it was the first time overseas companies had invested in commercial hardwood tree planting in Australia.
Dr Lawrence said the landmark agreement had been reached between the Department of Conservation and Land Management and Oji Paper Company and Itochu Corporation.
"The companies chose Western Australia's South-West after assessing the potential for commercial tree plantations in 38 regions around the world," she said.
The Premier said plantations would be established on 20,000 hectares of already cleared farmland in the Albany region. The companies would fund the entire project and contract CALM to supervise the operation.
The project would return about $50 million a year to Western Australia as the trees are harvested.
"Oji Paper Company is Japan's largest pulp and paper company with an international reputation for outstanding management and research. Itochu Corporation is another leading Japanese company which is already a major contributor to the State's economy through the iron ore industry," Dr Lawrence said.
The Premier said a feature of the tree planting scheme developed by CALM was the formation of partnerships between farmers and the investors.
"The investors will not acquire any land. Plantations will be established on a share-farming basis with participating farmers being paid a percentage of profits," she said.
"The trees will be integrated into other farm activities so there is no conflict with traditional farm production. In fact, the shelter from trees can increase the production from other crops and stock."
In the next year, 1.25 million trees would be established with a total of 25 million trees to be planted over 10 years. All the seedlings would come from CALM's nursery at Manjimup.
The Premier said the project would generate significant job opportunities associated with planting, managing and harvesting the trees.
Additional job prospects would flow from an estimated $20 million which was likely to be spent on port facilities and processing plant in Albany.
"Detailed technical and economic studies undertaken by CALM over the past five years show high quality wood fibre can be produced in the Great Southern region as efficiently, or more efficiently, than anywhere else in the world," Dr Lawrence said.
"The suitability of the region for commercial tree plantations - particularly the large area of alredy cleared land - has encouraged other major overseas companies to begin negotiations with CALM for similar ventures."
