Cascades to Shut FjordCell Pulp Mill Indefinitely

June 29, 2006 - Cascades today said that it will cease operations at its FjordCell pulp mill for an indefinite period of time. The mill, which specializes in the production of bleached softwood Kraft pulp, is located in Jonquiere (Quebec).

The closure is scheduled to occur during the week of July 3rd once supplies of raw material and chemicals have been depleted, Cascades said.

The closure will affect approximately 70 employees.

The mill produces 82,000 tons per year of Kraft pulp and sells all of its production to other Cascades facilities. During this closure, other suppliers will service these facilities, Cascades said.

Despite sustained efforts by employees and the mill's management, Cascades FjordCell continues to suffer considerable monthly financial losses. The business environment which has been marked by a strong appreciation of the Canadian dollar compared to the US dollar as well as high wood and energy costs dictates this course of action, the company said in a statement.

"Notwithstanding the excellent cooperation of our employees and a recent increase in sales prices, we have been unable to make this mill profitable leaving us no other choice but to suspend operations," said Eric Laflamme, president and COO, North America, Cascades Boxboard Group.

"We sincerely regret the impact that this decision will have on our employees and we are committed to re-evaluating the situation should conditions affecting operating costs and the exchange rate improve," Laflamme added.

SOURCE: Cascades Inc.

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