Rayonier Reaches Agreement on More Than USD 2 Billion of Cellulose Specialties Contracts into 2011

Jacksonville, Florida, USA, 13 July 2006--(BUSINESS WIRE)--With the signing yesterday of a major five-year contract with a Chinese company, Rayonier (NYSE:RYN) said its Performance Fibers unit now has historic long-term contracts with the world's largest manufacturers of acetate-based products and other key customers into 2011 for nearly 80% of the company's high value Cellulose Specialties production, representing almost 2 million metric tons and more than USD 2 billion in revenue at current pricing.

The most recent long-term agreement for Cellulose Specialties products is with fast-growing Nantong Cellulose Fibers Company (NCFC), a subsidiary of China National Tobacco - the world's largest manufacturer and marketer of tobacco products. Since 1994, Rayonier has been NCFC's sole supplier of specialty cellulose fibers used to produce cigarette filters and has seen sales grow dramatically with NCFC's rapid and continuing expansion. The new five-year contract is expected to generate sales revenues of nearly USD 500 million.

Rayonier's unique high purity Cellulose Specialties fibers are used by customers worldwide in the manufacture of LCD screens for televisions, computers, phones, and digital cameras; photographic film; cigarette filters; textiles; automotive filtration media; industrial tire cord; impact resistant plastics; paints; food products; and pharmaceuticals.

"As markets for our Cellulose Specialties continue to grow, our focus remains on enhancing our competitive position through targeted capital investments and operational efficiencies that not only improve costs but further enhance the quality of these high value products," said Paul G. Boynton, senior vice president, Performance Fibers. "Cellulose Specialties sales have increased 40% since 2000 and now account for nearly 75% of Performance Fibers revenue."

Rayonier's 150,000 metric ton sulfite mill in Fernandina Beach, Florida, and 590,000 metric ton kraft mill in Jesup, Georgia, provide customers with the flexibility of choosing from more than 25 grades of specialized fibers, manufactured to their production requirements using either kraft or sulfite processing methods.

Approximately 50% of Rayonier's Cellulose Specialties sales are to customers in North America, 25% to Europe, and 22% to Asia, primarily China and Japan, supported by offices in Shanghai, Tokyo and London.

About Rayonier

Rayonier is a leading international forest products company with three core businesses: Timber, Real Estate, and Performance Fibers. It owns, leases or manages 2.5 million acres of timber and land in the United States, New Zealand, and Australia. The company's ownership includes approximately 200,000 acres with residential and commercial development potential along the fast-growing Interstate 95 corridor between Savannah, Georgia, and Daytona Beach, Florida. Its Performance Fibers business is the world's leading producer of high value specialty cellulose fibers. Approximately 40% of Rayonier's sales are outside the United States to customers in 50 countries.