Tembec to Take Downtime at Skookumchuck, BC Pulp Mill

June 11, 2009 - Tembec said that its pulp mill located in Skookumchuck, British Columbia will take at least two weeks of market related downtime beginning the week of June 29.

Tembec attributed the decision to challenging market conditions for pulp and pulp consuming products, the rapid and significant strengthening of the Canadian dollar and the lack of economically viable fiber.

The company also indicated that the black liquor tax credit available to U.S. chemical pulp producers has added to these other issues and was a determining factor in this decision.

"The black liquor tax credit available to U.S. producers was absolutely a factor in this decision. It has allowed chemical pulp capacity that would otherwise be uneconomic to either remain in operation or be brought back into production, resulting in a material distortion in the pulp market in terms of both the supply/demand balance and pricing," said James Lopez, Tembec's president and CEO.

"In the absence of an offsetting measure to allow Canadian producers to level the playing field, our industry and its employees will continue to pay the price through mill idlings and closures. This inequity must be addressed," Lopez said.

The Skookumchuck mill has the capacity to produce about 650 metric tons per day of premium grade softwood pulp (NBSK).

SOURCE: Tembec

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