Tembec Invests In Its Quebec-Based Sawmill, Located In Béarn

Date: 
July 14, 2011

Montreal, Quebec – Tembec today announced a $6-million investment in its Béarn sawmill, located in the Abitibi-Témiscamingue region, in Québec. Support from the Province of Québec in the amount of $3.6 million will come as a grant from the Heavy oil consumption reduction program. The construction phase will start in the fall of 2011 and will be completed in the spring of 2012.

This initiative, aimed at substantially reducing energy costs, entails replacing two existing 6000-kW boilers by a single 7000-kW boiler that will provide adequate heating for the sawmill. This new boiler will also provide the required energy to operate the mill’s two kilns. “Thanks to this investment, these operations will be significantly more competitive, more efficient and more ecological. Not only will we operate a more performing asset, but we will also contribute to the enhancement of the quality of the environment as well as continue to fulfill part of the energy needs at our specialty cellulose plant in Témiscaming”, underlined Michel Bastien, Tembec Vice-President, SPF, Quebec Division, Forest Products Group. Eliminating 2.8 million liters of fuel used annually for heating will reduce the Béarn operations greenhouse gas emissions by 88%.

Tembec’s sawmill in Béarn employs 135 people and ships its lumber within Canada and to the United States, mainly to the Province of Quebec, Ontario and the Great Lakes area. It also provides wood chips as raw material and biomass as a source of energy to the Tembec specialty cellulose plant in Témiscaming.

Tembec Executive Vice President and President, Specialty Cellulose and Chemical Group, Yvon Pelletier, explained that “the long-term viability of the Témiscaming cellulose plant is tied partly to the sawmill in Béarn. Because this mill produces quality wood chips and quality biomass, and because it operates nearby, it qualifies as a supplier of choice for the cellulose plant. The Béarn mill therefore enables the Témiscaming plant to reduce transportation costs for these supplies. ”

“Tembec is among the world’s leaders in Specialty Pulp. This sector is currently one of the most promising within our Company,” stated James Lopez, Tembec President and CEO. “The project announced today, with active support from the Quebec Government, will allow us the opportunity to continue focusing on higher margins.”

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 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.

About the Heavy Oil Consumption Reduction Program

This program, administered by the Agence de l’efficacité énergétique du Québec, helps heavy oil consumers move toward sustainable development while improving their competitive position by reducing their consumption. Financial assistance is offered to carry out various analyses as well as implement energy efficient measures relating to heavy fuel oil or to switch to other forms of energy containing fewer pollutants, such as natural gas, forest biomass and electricity. This program is financed by the Green Fund and falls under Action 1 of the 2006-2012 Climate Change Action Plan. Any company with a place of business in the province of Quebec where heavy oil is consumed and which meets the requirements of the program is eligible.

This press release includes “forward-looking statements” within the meaning of securities laws. Such statements relate, without limitation, to the Company’s or management’s objectives, projections, estimates, expectations or predictions of the future and can be identified by words such as “may”, “will”, “could”, “anticipate”, “estimate”, “expect” and “project”, the negative or variation thereof, and expressions of similar nature. Forward looking statements are based on certain assumptions and analyses made by the Company in light of its experience, information available to it and its perception of future developments. Such statements are subject to a number of risks and uncertainties, including, but not limited to, changes in foreign exchange rates, product selling prices, raw material and operating costs and other factors identified in our periodic filings with securities regulatory authorities. Many of these risks are beyond the control of the Company and, therefore, may cause actual actions or results to materially differ from those expressed or implied herein. The forward-looking statements contained herein reflect the Company’s expectations as of the date hereof and are subject to change after such date. The Company disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities legislation.

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Information:
Linda Coates
Vice President, Communications and Public Affairs
Tel.: 416 775-2819
linda.coates@tembec.com

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