Tembec has announced the permanent closure of its newsprint mill located in Pine Falls, Manitoba. The mill had been indefinitely idled due to a labour dispute on September 1, 2009. After examining a full range of options, the Company initiated a sales process for the mill in early January 2010. This sales process has proved unsuccessful. After a thorough analysis of the situation, the Company concluded that the permanent closure of the facility was the only viable option. Approximately 230 employees will be affected.
“Although not an easy decision to make, the structural decline of the newsprint market and the cost structure of the mill prompted such a decision,” said Chris Black, Tembec’s Executive Vice President and President, Paper Group. “The Company intends to act in a manner that will ensure that employees receive their severance pay in accordance with the collective agreement.”
As a result of this announcement, a net charge of approximately $8 million related to the closure will be recorded in the quarter ending September 25, 2010.
Tembec is a large, diversified and integrated forest products company which stands as the global leader in sustainable forest management practices. The Company’s principal operations are located in Canada and in France. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TMB and warrants under TMB.WT. Additional information on Tembec is available on its website at www.tembec.com.
This press release includes “forward-looking statements” within the meaning of securities laws. Such statements relate to the Company’s or management’s objectives, projections, estimates, expectations, or predictions of the future and can be identified by words such as “anticipate”, “estimate”, “expect” and “project” or variations of such words. These statements are based on certain assumptions and analyses by the Company that reflect its experience and its understanding of future developments. Such statements are subject to a number of uncertainties, including, but not limited to, changes in foreign exchange rates, product selling prices, raw material and operating costs, and other factors identified in the Company’s periodic filings with securities regulatory authorities in Canada and the United States. Many of these uncertainties are beyond the Company’s control and, therefore, may cause actual actions or results to differ from those expressed or implied herein. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Information:
John Valley
Executive Vice President, Business Development and Corporate Affairs
Tel: 416-775-2819
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Michel J. Dumas
Executive Vice President, Finance and Chief Financial Officer
Tel: 819-627-4268
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