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FOR IMMEDIATE RELEASE                 For further information
                                      Media Contact:     Martin H. Arnold
                                                         203-964-4621
                                      Investor Contact:  John A. Doumlele
                                                         203-964-4486


               RAYONIER COMPLETES SMURFIT TIMBERLAND ACQUISITION;
                   ANNOUNCES SHAREHOLDER VALUE RETURN PROGRAMS


Key Elements:
         Completion of Acquisition and Increased Cash Flow
         Planned Equity Offering and Use of Proceeds
         Share Repurchase Program
         Dividend Increase of 16%

         STAMFORD, CT, October 25, 1999 - Rayonier (NYSE:RYN) said that it
completed today its previously announced timberland purchase from Smurfit-Stone
Container Corporation. The company also outlined steps to increase returns to
shareholders, including raising its quarterly dividend by 16 percent, and
reconfirmed plans for a second quarter 2000 initial public equity offering by
its U.S. timberland subsidiary leading to an expansion of its share repurchase
programs.

         The final purchase price of the timberland was $710 million for 969,000
owned and leased acres in Georgia, Florida and Alabama. Rayonier now is the
seventh largest private timberland owner in the U.S., with 2.2 million acres.
The company also has long-term timber rights to approximately 220,000 acres in
New Zealand.

         "We made this investment because of the high quality of the land and
timber, its proximity to our existing holdings, attractive price, and strong
cash returns", said Lee Nutter, Chairman, President and CEO. "We intend to use
the increased cash flow generated from this acquisition to maximize near term
shareholder returns while prudently investing in our businesses."

         The company said that, as a result of the acquisition, it expects
consolidated EBITDA (earnings before interest, taxes, depreciation and
amortization) to increase next year on a pro

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forma basis by approximately $74 million, or $2.65 per share. Consolidated free
cash flow is also expected to be accretive by 37 cents per share, or 9 percent.
As is typical of newly acquired timberland, the properties are expected to be
dilutive to quarterly earnings by approximately 18 cents per share in 2000 due
to purchase price depletion and interest expense.

         "Now that we have completed the acquisition, we can be more specific as
to how we plan to monetize a portion of our U.S. timberland assets and allocate
the one-time and ongoing cash that will be generated," Nutter said.

ANTICIPATED TIMBERLAND SUBSIDIARY PUBLIC EQUITY OFFERING AND USE OF PROCEEDS

         Rayonier confirmed its plans to raise $300 to $400 million from a 25-35
percent public equity offering in its U.S. timberlands through either a REIT or
Master Limited Partnership. A spring 2000 offering is anticipated, depending on
market conditions. The company noted that either of these vehicles will (a)
allow it to generate faster growth in its U.S. timber base, and on a
self-financing basis, (b) enable the company to obtain low cost capital because
of greater tax efficiency for investors, and (c) create a public market
valuation of the timberlands that will provide a better basis for valuing
Rayonier (parent company) equity.

         "Timberland is a strategic and core business for the company," Nutter
said. "By retaining an approximate 70 percent interest in our timberland
subsidiary, Rayonier shareholders will directly benefit from the growth in its
timberland business and the more transparent value of those assets."

         Proceeds of the equity offering would first be used, within 6-12
months, to repurchase approximately $75 to $100 million of Rayonier shares. The
remaining proceeds would be used to reduce debt. As previously announced, in the
first half of 2000 the company expects to generate approximately $50 million in
sale proceeds, also to be used for debt reduction, from the disposition of
non-strategic timberlands.

USE OF EXCESS FREE CASH FLOW BALANCED BETWEEN SHARE REPURCHASES AND CONTINUED
GROWTH

         Nutter said that once the new timberlands are fully absorbed, Rayonier
will continue its efforts to enhance the value of its other business segments
where opportunities present clear and significant returns. However, until those
opportunities arise, Nutter said most of the company's excess annual free cash
flow would be used to repurchase shares, consistent with maintaining debt and
interest coverage ratios at investment grade levels. The company estimated that
an

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annual share repurchase program of $50 to $75 million should then be
sustainable. The company estimated the threshold consolidated debt level at $950
million and the Rayonier (parent company) debt at $200 million, but said it
intends to work with the credit rating agencies before finalizing those
thresholds. With the growth of the company's assets, these thresholds would be
adjusted.

INCREASE IN DIVIDEND

         Nutter said the Rayonier Board of Directors today declared an increase
in its quarterly dividend from 31 to 36 cents per common share, payable December
31, 1999, to shareholders of record December 10, 1999. The action increases
Rayonier's dividend, on an annualized basis, from $1.24 to $1.44.

         "Rayonier has always been a very strong cash flow company and this
major timberland acquisition makes us even stronger," Nutter said. "With
continued financial discipline, which we believe will not constrain earnings
growth, we will be able to return more value in the near term to our
shareholders through enhanced dividend and share repurchase programs."

         Comments about market trends, anticipated earnings and future
activities are forward-looking and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Changes in
the following important factors, among others, could cause actual results to
differ materially from those expressed in the forward-looking statements:
failure of Asian markets to recover as expected; fluctuations in demand for
specialty chemical cellulose and fluff pulps, export and domestic logs, and wood
products; the impact of such factors on the Company's timber sales in the U.S.
and New Zealand; production costs for wood products and for specialty pulps,
particularly for raw materials such as wood and chemicals; adverse weather
conditions in the Company's operating areas; the possibility of forest fires;
and governmental policies and regulations affecting the environment, import and
export controls, and taxes; and stock market, interest rate and currency
movements.

         Rayonier is a global supplier of timber, specialty pulps, and wood
products with customers in 60 countries. The company has nearly 2.5 million
acres of timberland in the U.S. and New Zealand. More information about Rayonier
is available at www.rayonier.com.

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