Smooth Startup of Potlatch's New Through-Air-Dried -- TAD -- Tissue Machine Speeds 'Hydrasorb' Private Label Ultra Towel to Store Shelves.

Business Editors

LAS VEGAS--(BUSINESS WIRE)--Feb. 26, 2004

Within days of startup, Potlatch Corporation's (NYSE:PCH) new Through-Air-Dried (TAD) tissue machine began producing ultra paper towels for the company's private label customers that consumers judge to be of equal quality to leading national brands.

"In initial tests, consumers reported that the Las Vegas product's performance is comparable to leading national brands in the key category attributes of absorbency and strength," noted Craig Nelson, Potlatch Vice President of Consumer Products. "Consumers also scored the Potlatch product high in other attributes of softness and thickness," he added.

Potlatch's private label customers, including major retail grocery chains, are moving quickly to add the new ultra towel to their line-up of tissue products, reports Consumer Products Marketing Director Bruce Woodlief. "With the addition of the ultra towel, Potlatch will be able to provide our customers with a full multi-tiered selection of paper towel products," he said. "This will help them grow their private label sales and provide them with yet another tool to further develop consumer loyalty and support for their brands," he said.

Several U.S. retailers will market Potlatch's new ultra towel with the Potlatch Hydrasorb(TM) trademark on their packaging, confirming that their towels are manufactured with advanced technology that produces superior towel attributes. "We believe consumers will come to associate the Hydrasorb trademark with the quality represented by our new ultra towel, which should enhance store sales and consumer loyalty," Woodlief concluded.

"This was an extremely smooth startup, which was key to our strategy of getting the product on our customers' shelves without delay," Nelson stated. "Planning and execution by our Las Vegas personnel and the machine's supplier were outstanding," he added. Toscotec of Lucca, Italy supplied the 102-inch TAD machine. Potlatch credited Toscotec with on-time delivery and outstanding support during the project.

Bob DeVleming, Consumer Products Vice President for Sales, emphasized that Potlatch promptly moved the new ultra towel through initial trials and worked closely with customers to facilitate their final reviews of the product. "To move things along even faster, we worked on package designs even as the machine was being finished," he said. "As a result, our key customers will be marketing the new ultra towels within weeks of the startup," he said.

The products will be offered in a variety of configurations competitive with leading branded ultra towel products. Offerings will include four-color process prints, regular, big and multi-size rolls and package sizes ranging from single rolls up to 15-pack value sizes.

Potlatch will convert the new ultra towel products at its Las Vegas, Nevada, and Benton Harbor, Michigan, facilities. Potlatch's western customers will be served from Las Vegas while the company's growing customer base in the Midwest, East and South will be served from Benton Harbor.

This news release contains, in addition to historical information, certain forward-looking statements. These forward-looking statements are based on management's best estimates and assumptions regarding future events, and are therefore subject to known and unknown risks and uncertainties and are not guarantees of future performance. The company's actual results could differ materially from those expressed or implied by forward-looking statements. The company disclaims any intent or obligation to update these forward-looking statements.