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June 13, 2002
Aquatic Cellulose Uses Robotic Technology to Harvest Trees Underwater
    by William Baue

Canadian company offers an environment-friendly alternative to traditional forestry and a socially responsible alternative to other forms of underwater tree harvesting.

Trees play an integral role in the global ecosystem by absorbing carbon dioxide and emitting oxygen. Trees also, however, are a vital resource for economic growth. This creates a dilemma. One possible solution is harvesting trees that no longer absorb carbon dioxide or emit oxygen. But where could such trees be found?

"In reservoirs behind many dams around the world, you will find millions of acres of forest that were never cleared prior to flooding. No longer living, these woods are beautifully preserved in the fresh water," said Michael Lacy, manager of Investor Relations for British Columbia-based Aquatic Cellulose International Corporation (ticker:ACQI.OB).

Aquatic Cellulose (ACQI) went public in 1997 to exploit this timber, which represents an environment-friendly alternative to cutting live trees. Although this is not a new concept, Aquatic Cellulose pioneered a novel approach. Other methods of underwater forestry risk the safety of divers. Aquatic Cellulose uses a patented robotic technology called the Aquatic Timber Harvester (ATH). The ATH enables safe and efficient recovery of underwater timber without divers, which is a first in the industry.

Currently, the ATH-60 enables Aquatic Cellulose to harvest timber at depths of up to 60 feet. A new model, the ATH-120, will double this reach. The company is in the final stages of software development.

"The ATH-120 represents a significant evolution in our technology," Mr. Lacy told "We have upgraded the system software to enhance operating performance, expanded underwater reach capabilities to over 120 feet, and widened load capacity to enable harvest of timbers up to six feet in diameter. The ATH-120 will allow us to safely harvest virtually all of the more than 400,000 acres of timber inundated at Tucurui Reservoir [in Brazil]."

In January, Aquatic Cellulose bought out ECOMAB, the joint venture the company created with the Brazilian company Sulpam Maderias to log the underwater rainforest at Tucurui Reservoir.

"The acquisition gives ACQI 100 percent control of our timber leases at Tucurui Reservoir and all resulting revenue from sales," said Mr. Lacy. "Additionally, we have removed logistical barriers to substantially improve our efficiency and enhance our production capabilities. The ECOMAB project at Tucurui is roughly valued at $1 billion."

In April 2001, Aquatic Cellulose entered into an exclusive supply agreement with Milwaukee-based Timber Holdings Ltd. (THL) for its total production of underwater harvested Ipe hardwood. THL placed orders totaling more than $1.5 million, a portion of which is for a boardwalk reconstruction project at Asbury Park in New Jersey. This decking installation is currently in the second of three phases, according to Mr. Lacy.

ACQI's stock price has been steadily climbing this year, closing yesterday at $0.08 after opening in January at $0.01. The stock price reached its peak at $1.28 two years ago, in April 2000.

While the environmental benefits of underwater forestry are evident, Aquatic Cellulose's operations offer significant social benefits as well. Besides protecting employee safety by harvesting the trees remotely, Aquatic Cellulose supports the local economy in Brazil through its Micro-Industry Program.

"Micro-Industry is a unique economic and social program designed to assist low-income families, maximize efficient use of indigenous forest resources, and significantly enhance our revenue," Mr. Lacy told "Working with local communities, Aquatic Cellulose will partner with education and economic agencies to provide the tools, training, and ongoing support for local families to create successful home-based businesses. Each business will craft useful and interesting products from the hardwoods harvested by Aquatic Cellulose."

In the future, Aquatic Cellulose plans to stockpile reserves of salvaged underwater timber to ensure its future stability and generate long-term growth.


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