Tembec, Unions Agree on Labor Pact at Kapuskasing Mill

June 8, 2006 - Tembec said that it has come to terms with its labor unions to extend the current labor agreement for the company's 750 unionized employees at its Spruce Falls Kapuskasing operations.

The new labor deal extends to September 30, 2008. The previous agreement had expired on September 30, 2005.

The new pact will not increase costs to the mill, Tembec said. It includes a number of positive initiatives and was approved by 85 per cent of unionized workers in a ratification vote held on June 6, 2006, the company added.

The local unions and management also will jointly develop and implement, on an ongoing basis, changes to the operations that will improve Kapuskasing's competitive position, Tembec said.

"The key elements of the extension agreed to by Kapuskasing's unionized employees are an important step toward ensuring that Spruce Falls newsprint operations are sustainable and can compete in an increasingly difficult environment," said Terrence P. Kavanagh, Tembec's executive vice president and COO. "By their efforts, Kapuskasing employees have demonstrated that they are committed to the future of their mill and to continuing to be a reliable supplier of high quality newsprint."

The new agreement is a good foundation to address the next challenge, which is to reduce the mill's energy costs. "This site has made great strides in terms of reducing the consumption of purchased energy, both natural gas and electricity. The key remaining challenge for this site will be to overcome the incredible disadvantage created by the price of electricity in Ontario," concluded Mr. Kavanagh.

Tembec is currently in discussions with the Province of Ontario to address the high price of electricity.

SOURCE: Tembec

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