Potlatch Constructing New Sawmill in Oregon

Jan. 25, 2006 (Press Release) - Potlatch Corp. today announced that its subsidiary, Potlatch Forest Products Corporation, is constructing an on-site sawmill to manufacture hardwood lumber products from poplar trees harvested from the company's 17,000-acre poplar plantation near Boardman, Oregon.

The $8.1-million project, which will include equipment to produce green hardwood lumber from poplar logs, is expected to be in operation by December 2006. Once completed, the sawmill is expected to produce an estimated 30 million board feet of green hardwood lumber and employ 55 at the Boardman site.

"The new sawmill will allow us to produce Forest Stewardship Council® (FSC) lumber products in our own on-site FSC-certified chain-of-custody sawmill from our FSC-certified poplar plantation," noted Potlatch Chairman and Chief Executive Officer L. Pendleton Siegel. "We will be better able to ensure consistent high quality and service for hardwood customers." For the past five years, logs harvested at the Boardman plantation have been sold either to other FSC-certified sawmills or processed in a small, temporary facility at the Boardman site. End products from the poplar log include furniture, molding and millwork.

"There are many new, emerging markets for poplar hardwood lumber products. With our own processing facility, we will be better able to develop them," Siegel concluded.

The Boardman facility was initially developed with sequential annual plantings of poplar trees, beginning in 1993. Computerized drip irrigation conserves water and delivers nutrients to the poplar trees, which are managed on 11-year rotations and cultured to produce clear, high-quality hardwood for lumber.

Potlatch is a real estate investment trust with 1.5 million acres of timberlands in Arkansas, Idaho, Minnesota and Oregon and 14 manufacturing facilities.

SOURCE: Potlatch Corp

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