Chairman's Letter to Shareholders GUNNS LIMITED 2002-10-23...

Chairman's Letter to Shareholders

GUNNS LIMITED 2002-10-23 ASX-SIGNAL-G

HOMEX - Hobart

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LETTER TO SHAREHOLDERS

I would like to take the opportunity to outline information relating
to the Tasmanian forest industry and more specifically the Company's
operations.

I believe that shareholders should be informed about the sustainable
nature of the forest industry. Tasmania has achieved a sensible
balance between significant areas of conservation reserves and
multiple use forests available for industry and other community
purposes.

Recently, various groups opposed to forestry activity have
disseminated misinformation relating to the Company and the wider
forest industry. Many claims made by these groups are factually
incorrect.

Resource available for use by industry in Tasmania is managed on a
sustainable basis. Less than one per cent of State forest dedicated
to multiple-use and production is harvested each year. The net forest
area of Tasmania is increasing every year with the legal requirements
to replant an equivalent of all forest area harvested. Additional
land is also being developed into new forests. Over the next year,
Gunns expects to plant almost 20 million seedlings - more than one
per person in Australia. Gunns has over 80,000 hectares of plantation
under management and is increasing this estate to supplement our wood
supply for the future.

As outlined in the Annual Report, Tasmania has a world class forest
reserve system with forestry operations conducted on a sustainable
basis governed by a Regional Forest Agreement, which has bipartisan
political support in the Federal and State governments. This month
the Federal Government launched the Australian Forest Standard. This
standard will give certification to wood produced from sustainable
managed forests.

Achievement of the Australian Forestry Standard and subsequent
international mutual recognition of this Standard will provide the
community and Gunns' customers with independent and official
certification of the Company's environmental practices and its forest
products. It will further highlight the sustainability of Tasmania's
resources in the national and international marketplace. It will
formally recognise Gunns as a producer of forest products under the
highest standard and internationally recognised world's best
practices.

Enclosed with this letter is some information relating to the
Australian Forestry Standard.

I hope that this letter provides an insight into the approaches being
taken by Government, Industry and the Company to ensure community
objectives for management of the forest resource are satisfied.
Inevitably there are groups within the community who do not accept
the balance of the strategies adopted, the environmental outcomes
achieved or the contribution made by the forest industry to the
social and economic base of the State. While these groups will
maintain a vocal opposition to our industry, the Company will
continue to manage its business to optimise economic, social and
environmental outcomes from its operations.

J Gay
EXECUTIVE CHAIRMAN

A copy of the Australian Forestry Standard Information is available
in PDF format on www.asx.com.au. Alternatively it is available for
purchase from ASX Customer Service on 1 300 300 279.