Special Meeting of Shareholders: Special Meeting of Shareholders 20 February 2004


Sir Dryden Spring : Sir Dryden Spring Chairman


Slide3: Shareholder Value Forest assets have not earned the cost of capital Proposal for acquiring the CNIFP assets to gain scale and market power did not proceed Economic profits unlikely in foreseeable future


Declining Export Log Price Trend: Declining Export Log Price Trend Pruned A-Grade K-Grade


Rate of Return: Rate of Return Processing and Distribution return – high & growing Forestry return – low & volatile


Slide6: World Class Standards Sawmill efficiency improving Advanced grading/drying technology Sawmill Operating Efficiency (OEE)


Slide7: World Class Standards Origin products “In Full/On Time” 95%+


Processing Investment: Processing Investment Expanded solidwood mouldings capacity by 25% Expanded plywood capacity by 25%


Marketing/Distribution Investment: Marketing/Distribution Investment USA – Expanded interests = Revenue Growth


Strategy is Adding Value: Strategy is Adding Value Cutting rights sold for US$65m Campbell Group bid - 42% premium to share price Kiwi Forest Group bid - 50% premium to share price


Proposed Forest Sale: Proposed Forest Sale Sale does not include Tarawera Purchasers Kiwi Forest Group Viking Global New Zealand OTPP New Zealand Forests Price $560 million


Slide12: $million Total proceeds from sale 560 Transaction and restructuring costs 44 Net proceeds 516 Debt repayment 21 Return of capital to shareholders 495 Use of Proceeds


Slide13: Payment in two tranches First payment 62.5 cents per share 1:2 shares cancelled IRD ruling - initial return not a dividend Distribution


Conditions: Conditions OIC approval - obtained FCF shareholder approval


Completion: Completion Third Party consents to non-freehold forests Price assumes all consents obtained Majority of consents can not be unreasonably withheld


Second Capital Return: Second Capital Return Up to 57.5 cents per current share Assumes Sale of Tarawera Third party consents No deterioration in trading Resolution of litigation Further share cancellation Shareholder approval


John Dell: John Dell Chief Executive Officer


Exit Low Margin Forest Activities: Exit Low Margin Forest Activities


Increasing Profitability: Increasing Profitability EBTIDA prior to FX and unusual items


Processing Plants: Processing Plants


North American Market: North American Market Trade NZ Exporter of the Year AWM – The Home Depot’s category vendor of the year Increased shareholding in Empire


Zenia House: Zenia House


Zenia House: Zenia House


China: China Huge home renovation market – US$24 billion 30% per annum growth Strong relationships established


Company is on Target: Company is on Target Restructuring blueprint complete Overhead costs reduce from $28 million to $15 million Forecast EBITDA FY04 $46 million


Strategy Progressed: Strategy Progressed Five-year strategy includes: Invest in value added processing Grow North American products and markets Develop new marketing and distribution initiatives


Sir Dryden Spring : Sir Dryden Spring Chairman


Summary : Summary Transactions deliver Cash up to $1.20 Value of “Newco” of $0.30 – $0.40 Total $1.50 - $1.60 per share Share price prior of sale - $1.00


Sir Dryden Spring : Sir Dryden Spring Chairman


Resolution 1 – Forests Sale: Resolution 1 – Forests Sale Ordinary Resolution That the sale of the Forest Assets on the terms set out in the Forests Sale Agreement for a price of approximately $725 million and the entry into the Wood Supply Agreements, in each case as described in the Explanatory Memorandum, be approved Sales price excluding Tarawera is now $560 million


Resolution 2 – Capital Return: Resolution 2 – Capital Return Special Resolution That, subject to resolution 1 being passed, the arrangement relating to the return of capital to the Company’s shareholders, as described in the Explanatory Memorandum and the Arrangement Plan, under which the Company will return up to $523 million of capital to shareholders, be approved Initial capital return is now $349 million excluding Tarawera


Sir Dryden Spring : Sir Dryden Spring Chairman


Slide33: Tenon n. the joining of two pieces of wood to form one of the strongest wood joints possible. Tenon is a powerful link to the heritage of wood-working.


Special Meeting of Shareholders: Special Meeting of Shareholders 20 February 2004