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Tembec Rejects Recapitalization Proposal from Jolina
Montreal, Quebec, Canada, 24 January 2008 -– In response to a press release issued by Jolina Capital Inc. on 23 January 2008, Tembec Inc. confirmed today it had received an unsolicited nonbinding proposal from Jolina on a confidential basis concerning a potential alternative recapitalization transaction.

At the request of Jolina, Jolina and its advisors made a presentation to Tembec’s board of directors and its legal and financial advisors describing the principal terms of the Jolina Proposal.

After due consideration of the Jolina Proposal and after consultation with its legal and financial advisors, the board of Tembec unanimously concluded that the Jolina Proposal could not reasonably be expected to result in a transaction more favorable to Tembec and its stakeholders (including the noteholders of Tembec Industries Inc.) than the proposed recapitalization transaction announced by Tembec on 19 December 2007.

After making this determination, Tembec invited Jolina and its advisors on a number of occasions to meet with representatives of Tembec and the legal and financial advisors of noteholders who support the Recapitalization and whose support would be required for the Jolina Proposal to proceed. Jolina and its advisors declined to participate in such a meeting. Tembec invites Jolina to make the details of its proposal available to Tembec’s stakeholders through a public announcement.

Noteholders holding, in aggregate, approximately USD 774 million of the outstanding notes (representing approximately 65% of the outstanding notes) have executed support agreements and have agreed to vote in favor of and support the Recapitalization. Tembec will continue to solicit further support for the Recapitalization.

Tembec anticipates that the proxy circular for the Recapitalization will be mailed early next week and will be filed concurrently on SEDAR (www.sedar.com).

Further information about the Recapitalization is available on SEDAR (www.sedar.com), EDGAR (www.sec.gov/edgar.shtml), and the Tembec’s Web site (www.tembec.com).

Tembec is a large, diversified, and integrated forest products company. 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 TBC. Additional information on Tembec is available at www.tembec.com.

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