<B>Tembec Plans Market Downtime</B>

Tembec Inc. will be taking downtime at its mills to reduce the amount of pulp and paper inventory on hand.

According to Terrence Kavanagh, president of Tembec’s Pulp Group, "The pulp and paper market fundamentals are strong as demonstrated by high operating rates which are in excess of 95%. However, we are experiencing a 'ripple effect' caused by a combination of factors ranging from a weak Euro, some over- exuberance in the market and flattening demand. To compensate, our intention is to curtail production as required to maintain our normal inventory levels".

Tembec Inc. produces around 2.1 million metric tons of market pulp a year. The curtailment is estimated to remove between 40,000-60,000 metric tons of pulp from the market, roughly 2-3 percent of the company’s total output.

A spokesman for Tembec said the company has yet to determine what mills will be affected by the shutdown. Including two French facilities Tembec is in the process of acquiring the company has a total of 10 facilities worldwide.

Downtime is expected to be complete by the end of the calendar year.