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Tembec Curtails Lumber Production in Response to Weak Markets
Temiscaming, Quebec, Canada, 25 September 2008 – Tembec today announced a series of curtailments of sawmill production in the midst of softening demand and prices for lumber. Specifically, the company will shut down its British Columbia Elko and Canal Flats sawmill and planer plants for two weeks, one in early October and another in early November. These shutdowns will also force a reduction in production at the company’s finger joint facility in Cranbrook, British Columbia for four weeks, two in October and another two in November. Finally, the Cochrane, Ontario, mill will cease operation at the end of October and will remain idled for a period of five months.

“These shutdowns are a consequence of the prolonged downturn in the U.S. housing market and the directly related impact on the demand and price for lumber,” said Dennis Rounsville, executive vice president and president of Tembec’s Forest Products Group. “With these market conditions expected to continue for the next several quarters, we need to act responsibly and adjust our production levels to current and foreseen market demand for lumber.”

The Elko, Canal Flats, and Cranbrook mills, with an annual capacity of 475 million board feet (mmbf) employ roughly 350 people; Cochrane produces 170 mmbf and employs 200 people.

Through the curtailments, Tembec intends to maintain its Forest Stewardship Council (FSC)-certified lumber deliveries to support its customers in meeting market and public demand for environmentally friendly solutions. With 10.4 million hectares of FSC-certified forestland under management, Tembec offers the largest range of FSC-certified products in the marketplace, Rounsville noted.

Management has informed employees at designated sites of the company’s decision.

Tembec is a large, diversified and integrated forest products company and a global leader in sustainable forest management practices. With operations principally located in North America and in France, the company employs approximately 8000 people. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TMB and warrants under TMB.WT. Additional information on Tembec is available at www.tembec.com.


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