Tembec takes downtime to adjust to market conditions
Temiscaming, Quebec,
February 3, 2009
– Tembec today announced a series of market-related shutdowns affecting all of its British Columbia facilities, its newsprint mill in Manitoba and one additional sawmill in Ontario.
In British Columbia, the Canal Flats and Elko sawmills, as well as the Cranbrook finger joint facility, will shut down for approximately eight weeks starting February 9, 2009. The softwood Kraft pulp mill located in Skookumchuck will cease operating on February 23 for a six-week period. The high yield pulp mill in Chetwynd was idled on Monday, February 2 and will remain down until market conditions support a resumption of operations. The combined BC curtailments will affect approximately 975 employees. The newsprint mill in Pine Falls, Manitoba will shut down for two weeks, effective February 10, affecting approximately 300 employees. The Company’s Hearst, Ontario sawmill, which employs roughly 125 employees, will shut down for a six-week period beginning on February 9.
These shutdowns are in response to depressed markets for lumber, pulp and newsprint. Lumber markets and prices continue to be negatively affected by the ongoing housing downturn in the United States. Pulp markets have been impacted by the global economic slowdown and the related impact on packaging and other pulp consuming products. The North American newsprint market continues to experience a structural decline, compounded by the impact of the current recession on newspaper advertising.
These outages will affect both staff and hourly personnel. Employees at all affected sites have been informed of the Company’s decision. The Company also indicated it will be reviewing fibre supply and procurement needs as a result of these shutdowns, and will respond accordingly.
“The extensive idlings announced today follow a careful review of current and forecasted market conditions. As difficult as these decisions may be for employees, contractors and communities, they are necessary to minimize losses, manage cash and reduce inventories,” said Jim Lopez, President and Chief Executive Officer. “We will obviously continue to monitor market conditions closely and will manage operating rates accordingly.”
The Canal Flats and Elko sawmills have annual capacities of 180,000 mbf and
270,000 mbf respectively, while the Cranbrook facility produces 25,000 mbf of finger jointed lumber per year. The Hearst sawmill has an annual capacity of 160,000 mbf. The Skookumchuck Kraft mill produces 270,000 tonnes of softwood pulp per year, and the high yield pulp mill in Chetwynd has an annual capacity of 240,000 tonnes of hardwood pulp. The Pine Falls newsprint facility produces 185,000 tonnes annually.
Tembec is a large, diversified and integrated forest products company which stands as the global leader in sustainable forest management practices. With operations principally located in North America and in France, the Company employs approximately 7,000 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 on its website at www.tembec.com.
This press release includes “forward-looking statements” within the meaning of securities laws. Such statements relate to the Company’s or management’s objectives, projections, estimates, expectations or predictions of the future and can be identified by words such as “will”, “anticipate”, “estimate”, “expect” and “project” or variations of such words. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of future developments. Such statements are subject to a number of risks and uncertainties, including, but not limited to, changes in foreign exchange rates, product selling prices, raw material and operating costs and other factors identified in our periodic filings with securities regulatory authorities. Many of these risks are beyond the control of the Company and, therefore, may cause actual actions or results to materially differ from those expressed or implied herein. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Information:
Richard Fahey
Vice President, Communications and Public Affairs
Tel.: 514-871-2304
richard.fahey@tembec.com