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Cascades Suspends Production at FjordCell Pulp Mill
Kingsey Falls, Quebec, Canada, 29 June 2006 -- /PRNewswire/ -- Cascades Inc., (CAS- TSX) announced today that it will cease operations at its FjordCell pulp mill for an indefinite period of time. The mill, which specializes in the production of bleached softwood kraft pulp, is located in Jonquiere, Quebec.

This closure is scheduled to occur during the week of 03 July once supplies of raw material and chemicals have been depleted. The closure will affect approximately 70 employees.

The mill produces annually 82,000 tons of kraft pulp and sells all of its production to other Cascades facilities, namely, Cascades Boxboard Group - Jonquiere and the Rolland Division of the Cascades Fine Papers Group. During this closure, other suppliers will service these facilities.

Despite sustained efforts by employees and the mill's management, Cascades FjordCell continues to suffer considerable monthly financial losses. The business environment -- which has been marked by a strong appreciation of the Canadian dollar compared to the U.S. dollar and high wood and energy costs -- dictates this course of action.

Eric Laflamme and Alain Dubuc, respectively president and chief operating officer, North America, and vice-president, Operations, for the Cascades Boxboard Group, met this afternoon with the union representatives and employees of Cascades FjordCell to announce the decision. Discussions will be held in the near future regarding transition measures to be implemented to alleviate the impact of this decision on employees.

"Notwithstanding the excellent cooperation of our employees and a recent increase in sales prices, we have been unable to make this mill profitable, leaving us no other choice but to suspend operations. We sincerely regret the impact that this decision will have on our employees and we are committed to re-evaluating the situation should conditions affecting operating costs and the exchange rate improve," Laflamme stated.

Founded in 1964, Cascades produces, transforms, and markets packaging products, tissue paper, and fine papers, composed mainly of recycled fibers. Cascades employs nearly 14,300 men and women who work in some 120 production units located in North America, in Europe, and in Asia. Cascades shares trade on the Toronto stock exchange under the ticker symbol CAS.

Source: Cascades, Inc.

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