SYDNEY, NSW – CSR Limited and RII Weyerhaeuser World Timberfund, L.P. today announced they had reached a binding agreement in which CSR would sell its 20,000 hectares of softwood plantations and its sawmills at Mt. Gambier, South Australia and Dartmoor, Victoria, to the U.S.-based timber partnership RII Weyerhaeuser World Timberfund for $224 million.

Also included in the sale is CSR’s pine moulding operation at Mt Gambier and the export woodchip operation at Portland, Victoria.

The transaction is expected to be finalised on or before 31 May, subject to approval from the regulatory authorities, including the ACCC.

RII Weyerhaeuser World Timberfund is a limited partnership between Weyerhaeuser Forestlands International Inc. and investors advised by UBS Brinson, Inc. of Chicago, which structures and manages timberland investments on behalf of institutional and other qualified investors.

Weyerhaeuser Forestlands International is a wholly owned subsidiary of Weyerhaeuser Company of Federal Way, Washington and is the managing general partner of RII Weyerhaeuser World Timberfund, which also has operations in Uruguay. Weyerhaeuser Forestlands International will assume responsibility for all management and marketing activities of the new plantation and processing assets in Australia.

CSR Managing Director Peter Kirby said the solid timber divestment was a further move in the restructuring and narrowing of CSR's business portfolio.

"This is another significant step in our plans to increase shareholder value by narrowing our business portfolio and divesting non-strategic assets, improving our performance and expanding our operations offshore in sugar and construction materials.

"There was a high degree of interest in the solid timber assets, and the agreement with RII Weyerhaeuser World Timberfund follows discussions with a number of interested parties.

"We are pleased with the result of these negotiations, which proceeded very quickly over the past couple of months. The final sale price reflects the level of interest and the quality of the assets sold," said Mr Kirby. "Our employees will be transferring to a new employer which is highly focused and committed to developing quality forest products operations around the world."

"With the remaining assets in our timber portfolio," said Mr Kirby, "we see significant operational and rationalisation opportunities. We want to extract these benefits, in order to maximise the value we deliver to shareholders from any further asset sales."

In a speech to new employees in south-east Australia today, Weyerhaeuser Forestlands International President Conor W. Boyd said: "We are delighted to be adding the Australian south-east timber holdings of CSR to the RII Weyerhaeuser World Timberfund partnership.

"We gain plantation forests and manufacturing facilities that are well managed and profitable, and inherit a quality workforce that will be a strong addition to our team," said Mr Boyd.

The two sawmills currently have a combined output of 115 million board feet (MMBF) (185,000m3).

The transaction also includes the sale of 30% of a new national timber sales and marketing joint venture, which includes CSR’s existing timber marketing and distribution business, and its investment in Australian Pine Distributors. Mr Kirby said: "CSR participates in an increasingly competitive global forest products market, and will benefit from the international expertise that the RII Weyerhaeuser World Timberfund will bring to the marketing and distribution joint venture."

After completion of this sale, CSR will still retain a significant presence in the sawn timber business in Australia, with sawmills in Tumut and Oberon in New South Wales and Caboolture, in Queensland.

CSR (www.csr.com.au) is one of the world's largest building and construction materials groups, with operations in Australia, the U.S., Asia and New Zealand. In Australia, CSR is also a major sugar producer and has substantial aluminium investments. In the U.S., CSR’s wholly-owned subsidiary, CSR America, Inc. has extensive operations including Palm Beach, Fla.-based building and construction materials manufacturer, CSR Rinker, and Houston-based Hydro-Conduit, a maker of pipe and concrete products. CSR group companies employ almost 20,000 people at 700 locations worldwide, and recorded sales in 1998 of approximately A$7 billion.

The UBS Brinson Division manages over USD $390 billion of institutional assets. UBS Brinson manages investment portfolios for corporations, public funds, endowments, foundations, central banks and other investors located throughout the world. The Division employs over 1500 people in offices in Chicago, Bahrain, Basel, Frankfurt, Geneva, Hong Kong, London, Melbourne, New York, Paris, Rio de Janeiro, Singapore, Sydney, Tokyo, and Zurich.

Weyerhaeuser Company (NYSE: WY), one of the world’s largest integrated forest products companies, was incorporated in 1900. In 1998, sales were $10.8 billion. It has offices or operations in 12 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Additional information about Weyerhaeuser’s businesses, products or practices is available at www.weyerhaeuser.com.