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Potlatch Corporation Celebrates Centennial Year

Wednesday, November 26, 2003

Press release from the issuing company

SPOKANE, Wash.--Nov. 25, 2003-- Potlatch Corporation, one of the nation's oldest forest products companies, is currently celebrating its centennial year. Founded in 1903 as Potlatch Lumber Co., the company built its first sawmill in 1906 at a North Central Idaho location that had been the site of Native American celebrations of gift giving and good will known as "potlatches." One of the company's initial major investors was Frederick Weyerhaeuser, the legendary lumberman and founder of the company that bears his family name. Today, Potlatch Corporation is an integrated forest products company with 1.5 million acres of timberland in Idaho, Minnesota and Arkansas, and a hybrid poplar plantation in Oregon. The company's 14 manufacturing operations in Idaho, Minnesota, Arkansas and Nevada produce lumber, plywood, oriented stand board, particleboard, bleached pulp, paperboard and private label consumer tissue products. The original Potlatch sawmill location was so remote that pack trains were required to initially supply construction materials. The company simultaneously constructed both the mill and a town to house workers and their families. Within two years, the town of Potlatch housed and provided for more than 1,500 inhabitants. In 1931, Potlatch Lumber Co. merged with two other pioneer Idaho forest products companies -- Rutledge Lumber Co. of Coeur d'Alene and Clearwater Timber Co. of Lewiston -- to form Potlatch Forests, Inc. (PFI), with headquarters in Lewiston. The new company, with John Philip Weyerhaeuser, Jr. as its first president, earned a national reputation for progressive land management practices and innovative products that efficiently utilized wood resources. Those trends have continued to the present day. For example, all of the company's forest management practices are currently third-party certified as meeting the nation's highest standards for land stewardship. Following its tradition of efficient wood fiber utilization, the company in 1950 started up the intermountain region's first pulp and paperboard mill to use sawmill waste chips and sawdust for raw material. The Lewiston, Idaho, mill has since been modernized and expanded several times and supplies paperboard for packaging to customers around the world. In 1963, Potlatch also began producing consumer tissue products from sawmill residuals, starting a new business line that would continue to grow. In the 1980s, Potlatch developed the first oriented strand board (OSB) mills capable of producing construction grade materials from wood that might otherwise go unused. Today the company operates three OSB mills in Minnesota that offer a new line of specialty products that conserve energy and have superior resistance to mold and insects. During the 1950s and 1960s, Potlatch grew through mergers and acquisitions, adding the land and manufacturing assets of Southern Lumber Co. and Bradley Lumber Co. of Warren, Arkansas, in 1956 and 1958, respectively, as well as expanding in Idaho. The company expanded into Minnesota in 1964 when it merged its assets with those of the Northwest Paper Co., a fine printing paper manufacturer with large land holdings. The company also acquired other operations and holdings in Idaho, Arkansas and Minnesota and expanded into other product lines. In 1965, the company moved its corporate headquarters from Lewiston to San Francisco. In 1973, the company changed its name from Potlatch Forests, Inc., to Potlatch Corporation. (The company moved its headquarters to Spokane, Washington, in 1997.) Potlatch, along with much of the forest products industry, endured major economic and market challenges during the 1980s and was forced to close or sell its older and less efficient operations, including the pioneer sawmills at Potlatch and Coeur d'Alene. In the latter part of the decade the company began modernizing its remaining facilities to make them competitive into the 21st century. That program extended into the 1990s. During the early 1990s, Potlatch's private label tissue business developed a new business model aimed at providing the private label market with products equal in quality to major brands. Lewiston added a new tissue machine, rebuilt its oldest tissue machine and added a new converting and distribution center in Las Vegas, Nevada, to serve its growing western customers. By the end of the decade, Potlatch captured 90 percent of the West's grocery chain private label market. The new century brought many challenges to the domestic wood and paper industry. Faced with global competition and currency valuations that favored foreign competitors in some paper grades, Potlatch exited the coated printing paper business in 2002 by selling most of that business segment's assets. Proceeds from the sale were used to reduce debt. Currently, its largest capital project is a $66 million tissue machine at Las Vegas designed to produce premium-quality toweling. Scheduled for startup in January of 2004, the machine will provide products for its growing customers in the Midwest and East as well as its western customers. "Our rich and colorful history has set the stage for an exciting new century," noted Potlatch Chairman and Chief Executive Officer L. Pendleton Siegel. "Many of the traditions and qualities we've acquired through the decades have been translated by each new generation at Potlatch into energy and innovation that we believe will assure our continued growth and additional value for our shareholders," he concluded. For additional information about Potlatch, its current products and facilities, check www.potlatchcorp.com.




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