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Tembec to Shut Down Indefinitely Its Smooth Rock Falls, Ontario Pulp Mill
Temiscaming, Quebec, Canada, 24 April 2006 – Tembec today announced that its market pulp mill in Smooth Rock Falls, Ontario, will be idled indefinitely, effective 31 July 2006. The Smooth Rock Falls mill produces 200,000 metric ton of northern bleached softwood kKraft (NBSK) pulp annually. The idling will affect approximately 230 employees.

A number of factors have combined to make this decision necessary. Key among these were the high value of the Canadian dollar and the high manufacturing costs at this site relative to global competition. "The combined effect of these factors created a situation that could not be sustained. While there has been some progress over the past two years relative to reducing the delivered cost of fiber, the overall financial performance of the Smooth Rock Falls mill has been unacceptable," said Terrence P. Kavanagh, executive vice president and chief operating officer.

"Decisions of this nature are never easy to make, and Tembec regrets the impact of today's announcement on employees, their families, and the Smooth Rock Falls community," concluded Kavanagh.

This decision is consistent with the recovery plan that was announced previously by James Lopez, Tembec president and CEO. Margin improvement at all manufacturing locations is central to this plan, and the company had indicated that, where no long-erm solutions could be identified and implemented to achieve this goal, necessary action would be taken.

During a series of meetings held today, the Smooth Rock Falls employees and union representatives were informed of the cmpany's decision. The employees had the opportunity to ask questions and discuss the situation with mill management. Tembec indicated that it will monitor market, operating, and financial factors to determine when or if a future resumption of operations is possible.

Tembec is a large, diversified, and integrated forest products company. With operations principally located in North America and in France, the company employs approximately 10,000 people. Tembec's common shares are listed on the Toronto Stock Exchange under the symbol TBC. Additional information on Tembec is available on its website at www.tembec.com


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