Tembec Acquires Cogeneration Assets in Chapleau, Ontario

Temiscaming, Quebec, Canada, 22 August 2007 -– Tembec today announced that it has completed the acquisition of the assets of Chapleau Cogeneration Limited, located in Chapleau, Ontario. The transaction closed on 15 August and includes a biomass fired boiler and steam turbine with an installed capacity of 7.2 megawatts. Consideration for the assets consists of a series of future annual payments to 2022, with a present value of approximately CAD 1 million.

With the addition of the Chapleau facility, Tembec’s total captive generating capacity at its facilities in Canada and France now exceeds 150 megawatts, of which 26 megawatts are located in Ontario. All of the Ontario capacity would be considered “green energy,” based on either hydro or biomass fired generation.

Located adjacent to the company’s Chapleau SPF sawmill, the cogeneration assets are "a valuable addition to Tembec’s operations," said Dennis Rounsville, executive vice president and president of the Forest Products Group.

Since its commissioning in 1985, the cogeneration plant and the sawmill have been closely linked, with the cogeneration plant receiving most of its biomass fuel supply directly from the sawmill and, in return, the sawmill receiving steam for its lumber kilns.

"Given the immediate proximity and the high degree of interdependence between our sawmill and the cogeneration plant, this is a very logical and sound acquisition. It is also consistent with our corporate priorities in terms of increasing the amount of electricity produced internally and reducing our reliance on purchased energy in all forms,” said Rounsville. "We have a solid fiber base, good sawmill assets, and a productive workforce at Chapleau. This acquisition will contribute to a further strengthening of the competitive position of an already good operation.”

The 12 unionized and two staff employees of the cogeneration operation will continue in their current roles as part of the acquisition.

Tembec is a large, diversified, and integrated forest products company. With operations principally located in North America and in France, the company employs approximately 9000 people. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TBC. Additional information on Tembec is available on its Web site at www.tembec.com