Tembec Furthers Curtailment of Pulp Production

Jan. 27, 2009 - Tembec said that it will initiate a series of market-related pulp downtime affecting one of its Canadian pulp mills, as well as its three pulp mills in France.

The shutdowns, ranging from two weeks to an indefinite idling, are a direct response to the global economic slowdown and the related impact on packaging and other pulp-consuming products, Tembec said.

In Canada, the high yield pulp mill located in Matane, Quebec which was expected to restart on January 31 will remain idled indefinitely. This extended shutdown will affect approximately 120 people.

In France, the paper pulp mills in Tarascon and Saint-Gaudens will each take four-week shutdowns starting February 8, and the specialty pulp mill in Tartas will begin a two-week shut on February 15.

The Saint-Gaudens and Tarascon mills together employ roughly 550 people, and the Tartas mill, approximately 300.

Unlike earlier temporary shutdowns, these will affect both staff and hourly personnel, Tembec said.

Employees at all affected sites have been informed of the company's decision, Tembec noted.

"The aggressive actions announced today follow a review of current and foreseen market conditions. We have made the decision to respond in a manner that represents the best approach to minimizing losses, managing cash and reducing inventories," said Jim Lopez, Tembec's president and chief executive. "We will obviously continue to monitor market conditions closely and will manage operating rates accordingly."

The hardwood high yield pulp mill in Matane produces 250,000 tonnes annually.

The Tarascon softwood Kraft mill and the Saint-Gaudens hardwood Kraft mill produce respectively 260,000 and 305,000 tonnes of pulp per year, and the Tartas speciality cellulose mill has an annual capacity of 155,000 tonnes.

SOURCE: Tembec

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