Friday, June 12, 2009

Tembec takes Sawmill Downtime

Temiscaming, Quebec, June 12, 2009 – Tembec today announced a series of market related temporary shutdowns affecting all its sawmills in Northern Ontario.

The affected operations include the Kapuskasing sawmill which will shut down for a period of one week beginning July 6, the Chapleau sawmill for three weeks beginning June 29, and the Cochrane and Hearst sawmills which will each go down for six weeks beginning June 22 and July 6 respectively. These idlings will affect employees at all levels at the sawmills, as well as the forestry operations supporting these facilities. Approximately 500 employees will be impacted by these combined temporary shutdowns.

“These shutdowns are a consequence to the rapid and significant appreciation in the value of Canadian dollar, continued weak markets for lumber, and the related need to manage inventories and working capital,” said Dennis Rounsville, Executive Vice President and President of Tembec’s Forest Products Group. “We will continue to monitor economic and market conditions closely and will manage operating rates accordingly.”

Employees at the affected Ontario sites have been advised of the Company’s decision.

The Company also confirmed that employees at its sawmills in Elko and Canal Flats, British Columbia were advised that those sites would be idled effective June 15 for a minimum of three weeks for similar reasons.

The affected Northern Ontario sawmills have a total annual capacity of 550 million board feet and the B.C. mills a combined annual capacity of 450 million board feet.

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