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                                                                   Exhibit 10.7B

             CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS

                  AGREEMENT ON PLEDGE OF GOODS IN CIRCULATION

Entered into as of the 12th day of March, 2001, between:

1)  Closed Joint-Stock Company "Forest-Starma", a closed joint stock company
    registered in accordance with Russian legislation in force (hereafter the
    "Company"), and

2)  Rayonier Inc., a corporation organized in accordance with the laws of the
    State of North Carolina, USA (hereafter "Rayonier").

The Company and Rayonier hereby agree as follows:

Article 1.  Definitions

1.1.  For the purposes of this Agreement, the terms and concepts used in this
      Agreement shall have the same meanings as in the Log Sales Contract, as
      well as in Addendum No. 1 thereto. The terms indicated below shall have
      the following meanings:

Addendum No. 1 to the Contract - means Addendum No. 1 to Log Sales Contract No.
11-21-01, dated November 27, 2000, entered into between the Company and Rayonier
on March 12, 2001, including all amendments and addendums thereto.

Law on Pledges - means the Law of the Russian Federation "On Pledges" No. 2872
of May 29, 1992.

Pledge - means a pledge of goods in circulation created under this Agreement in
accordance with the Law on Pledges and the Civil Code of the Russian Federation
of October 21, 1994.

Pledged Property - means logs (the subject of the Pledge) owned by the Company
and stored at the Company's lower landing in Siziman Bay, Vanino Region,
Khabarovsk Territory, Russian Federation, with a (pledged) value of not less
than the Secured Amounts, but not to exceed US $***, based on prevailing market
prices as mutually agreed upon by the Company and Rayonier.

Log Sales Contract - means Log Sales Contract No. 11-21-01,dated November 27,
2000, between the Company and Rayonier, including all amendments and addendums
thereto.

Moment of Sale - means the moment of transfer (alienation) of ownership of the
Pledged Property by the Company to Rayonier.

Means of Securing Obligations - means any method of securing the performance by
the Company of its obligations with respect to the sale to Rayonier of the
Pledged Property that is provided for by law or by agreement of the Parties.

Parties - means the Company and Rayonier under this Agreement

Secured Amounts - means all monetary obligations that must be paid by the
Company to Rayonier under the Log Sales Contract in the form of repayment of two
advance payments of  $*** each, totaling US $*** in the aggregate, provided by
Rayonier to the Company in accordance with Article 1 of Addendum No. 1 to the
Contract, or any unpaid portion of such advances.

Article 2.  Payment of Secured Amount

2.1   The Company is well aware of all the conditions, under the Log Sales
      Contract and Addendum No. 1 to the Contract, of the Company's obligation
      to repay the Secured Amounts, which are secured by this Pledge, including
      the following:

a)    The aggregate amount of the two advances is $***.

b)    The Final Repayment Date - 10 days after receipt by the Company of
      Rayonier's written notice after July 31, 2001.

2.2   The Pledge secures Rayonier's demand for repayment by the Company the
      Secured Amounts in such amount as is outstanding at the moment of actual
      satisfaction.
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Article 3.  Pledge

3.1  As a Means of Securing Obligations with respect to repayment of the Secured
     Amounts, the Company, in accordance with the Civil Code of the Russian
     Federation and the Law on Pledges, shall create a Pledge of the Pledged
     Property in favor of Rayonier.

3.2  The Company shall maintain the right to possess, use and dispose of the
     Pledged Property, provided that it fulfills the provisions of Article 357
     of the Civil Code of the Russian Federation and Article 3 of the Law on
     Pledges, as well as corresponding provisions of this Agreement.

     The Pledged Property, alienated by the Company, shall cease to be the
     subject of the Pledge at the Moment of Sale.

3.3  This Pledge shall be created without prejudice to any other rights in
     accordance with any Means of Securing Obligations that the Parties may use
     and is in addition to any rights arising out of any Means of Securing
     Obligations that Rayonier may have or that may be provided to Rayonier by
     the Company or another party with respect to all or a part of the Secured
     Amounts. The obligations and conditions provided for under this Agreement
     shall remain in effect as continuing obligations in favor of Rayonier until
     such time as the Secured Amounts are repaid in full, subject to the
     provisions of Section 3.6 of this Agreement.

3.4  All expenses connected with preparing this Pledge and all expense
     associated with maintaining this Pledge shall be borne by the Company.
     Other fees and overhead expenses connected with executing against the
     Secured Property and/or selling the Secured Property shall be borne by
     Rayonier.

3.5  The Company, in addition to its other obligations under this Agreement,
     shall be obligated:

     a)  to maintain a record of this Pledge as required by Article 375, Item 3
         of the Civil Code of the Russian Federation and Section 18 of the Law
         on Pledges, and within 10 days after the Pledge is created to make a
         notation in the Pledge Register containing information on the form and
         subject of the Pledge, as well as the amount of obligations secured by
         the Pledge;

     b)  to immediately provide Rayonier, at its request, with extracts from
         such Register, containing necessary information regarding the Pledge,
         as well as to provide Rayonier, at its first request, with the Pledge
         Register for review.

3.6  In the event of partial performance by the Company of the obligations
     secured by the Pledge to repay the Secured Amounts, the amount of the
     Pledged Property shall be reduced proportionately to the obligations
     performed by the Company such that the total (pledged) value of the Pledged
     Property is reduced proportionately to the actual part of the advance
     payments repaid by the Company.

3.7  A change in the composition and natural form of the Pledged Property shall
     be permitted, provided that its total (pledged) value does not become less
     than that which is provided for under this Agreement. A change in the
     composition and value of the Pledged Property may at any time be monitored
     by Rayonier. In addition, the Company shall be obligated, at Rayonier's
     first request, to provide Rayonier with necessary assistance in conducting
     such monitoring, including by providing necessary documents.

3.8  The Pledge shall be created without transferring the Pledged Property to
     Rayonier. No subsequent pledges of the Pledged Property by the Company
     shall be permitted.

3.9  In the event the Pledged Property is lost or damaged, or if the Company
     ceases to own the Pledged Property on grounds provided for by law, the
     Company shall be obligated, within a reasonable period of time, to replace
     the Pledged Property with other logs or logging equipment of equivalent
     value. In the event it is impossible to replace the lost or damaged Pledged
     Property, the Company shall be obligated to immediately inform Rayonier of
     this in writing and, within a reasonable period of time, to replace this
     Pledge with another Means of Securing Obligations that is acceptable to
     Rayonier.

3.10 Rayonier shall be obligated, upon receipt of a request from the Company
     after final payment by the Company of the Secured Amount, to fully and
     unconditionally release the Company from its obligations under this Pledge,
     and to notify the Company of such release within 3 days.
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Article 4.  Execution Against the Pledged Property

4.1  In the event the Company, within the established time frame, does not repay
     the Pledged Amount or a part thereof in accordance with Addendum No. 1 to
     the Contract and Article 2 of this Agreement, or if through the Company's
     fault the Pledged Property is irreplaceably lost or damaged, Rayonier
     shall, in accordance with the provisions of the law and the terms of this
     Agreement, have a priority right over other creditors of the pledgor to
     obtain satisfaction against the value of the Pledged Property.

4.2  Under the circumstances set forth in Section 4.1 of this Article, Rayonier
     shall have the right to exercise its rights as pledgee under this
     Agreement, including with out limitation, the right:

     a)  to satisfy its demands for repayment of the Secured Amounts against the
         value of the Pledged Property in full;

     b)  to exercise any other rights and authority with respect to all or a
         part of the Pledged Property, including the right to execute against
         the Pledged Property and to sell it;

     c)  to assume management of the Pledged Property and to conduct any
         transactions or to demand the conduct of any transactions with respect
         to the Pledged Property as if Rayonier were the owner of the Pledged
         Property;

     d)  to sell, at its discretion, the Pledged Property and to use the
         proceeds from such sale to repay the debt to Rayonier with respect to
         repayment of the Secured Amounts.

4.3  Rayonier may sell the Pledged Property independently or, according to its
     directive, through specialized organizations. The base sale price for the
     sale of the Pledged Property shall not be lower than its Pledged value,
     indicated in Article 1 of this Agreement.

4.4  After the sale of the Pledged Property, Rayonier shall be obligated to
     provide the Company with the difference, in monetary form, remaining at
     Rayonier's disposal after the full repayment of all indebtedness of the
     Company with respect to repayment of the Secured Amounts, within 10 days
     after the date of receipt of the proceeds by means of a transfer of the
     amount of the difference to the Company's bank account.

4.5  In the event that part of the Pledged Property is not sold, but the
     indebtedness of the Company with respect to the Secured Amounts is not
     fully repaid, Rayonier shall be obligated, within 10 days after the full
     repayment of the Company's indebtedness with respect to the Secured
     Amounts, to return such unsold part of the Pledged Property to the Company.

4.6  The Company shall have the right at any time before the sale of the Pledged
     Property to stop execution against the Pledged Property by repayment of the
     Secured Amount in full.

Article 5.  Representations and Warranties of the Parties

5.1  The Company hereby represents and warrants that:

     a)  The Company has all requisite rights, power and authority to enter into
         this Agreement and to perform its obligations hereunder;

     b)  The execution of this Agreement does not contradict the provisions of
         any agreements or contracts to which the Company is a party, and the
         Company is not aware of any facts or circumstances, both financial and
         otherwise, about which it has not informed Rayonier, and which might
         affect the readiness of Rayonier to enter into this Agreement;

     c)  The Company owns the Pledged Property, free of any Means of Securing
         Obligations, arrests, encumbrances or rights of third parties, and will
         maintain such ownership until the Moment of Sale;

     d)  This Pledge is not a major transaction within the sense of Article 78
         of the Federal Law of the Russian Federation "On Joint Stock
         Companies", and the decision regarding the granting of this Pledge was
         properly adopted by the competent management bodies of the Company.
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5.2  Rayonier hereby represents and warrants that:

     a)  Rayonier has all requisite rights, power and authority to enter into
         this Agreement and to perform its obligations hereunder;

     b)  The execution of this Agreement does not contradict the provisions of
         any agreements or contracts to which Rayonier is a party, and Rayonier
         is not aware of any facts or circumstances, both financial and
         otherwise, about which it has not informed the Company, and which might
         affect the readiness of the Company to enter into this Agreement.

Article 6    Dispute Resolution

6.1  Any dispute, controversy or claim arising out of, or relating to this
     Agreement, including the breach or termination thereof, which cannot be
     resolved through amicable good faith negotiations between the Parties
     within one month, shall be referred for arbitration to the International
     Commercial Arbitration Court under the Chamber of Commerce and Industry of
     the Russian Federation in accordance with its current  Regulations, the
     rules of which are incorporated herein by reference.

6.2  This Agreement shall be governed  in accordance with Russian law.

6.3  The Parties shall be liable for their failure to perform or improper
     performance of their obligations under this Agreement in accordance with
     Russian law.

Article 7    Miscellaneous

7.1  This Agreement shall enter into force from the date that Addendum No. 1 to
     the Contract enters into force and shall terminate upon proper performance
     by the Company of its obligations with respect to repayment of the Secured
     Amounts.

7.2  If any of the provisions of this Agreement shall be deemed to be invalid or
     not to conform with laws now or subsequently in effect, such provisions
     shall be voided and this Agreement shall be construed and performed as if
     such nonconforming with the law, invalid or unperformable provision had
     never been part of this Agreement. The remaining provisions of this
     Agreement shall retain their full legal force and shall not be affected by
     any provision of this Agreement that are invalid, do not conform with the
     law or cannot be performed, or by the voiding of such provision.

7.3  This Agreement shall be binding and valid for the legal successors of the
     Parties throughout the term of this Agreement.

7.4  Neither of the Parties shall have the right to assign its rights and
     obligations under this Agreement in full or in part to third parties
     without the prior written consent of the other party.

7.5  Any amendments or addendums to this Agreement shall be valid only if they
     are executed in writing and signed by properly authorized representatives
     of the Parties.

7.6  The headings in this Agreement are included solely for convenience and do
     not affect the interpretation of the provisions of this Agreement.

This Agreement has been executed in 3 copies in Russian and 3 copies in English,
2 copies in each language for the Company and 1 copy --- for Rayonier.  All
original copies of this Agreement shall have equal legal force.  In case of
inconsistency with regard to the text between copies in English and in Russian,
the copy in English shall have the priority.

Signatures of the Parties

On behalf of the Company            On behalf of Rayonier

/s/ David Daggett                   /s/ Robert J. Cartano
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                                    Robert J. Cartano
                                    Director, Operations
                                    International Forest Products
/s/ N. Obukhova
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Chief Accountant