Tembec Curtails Production at Two Sites in Ontario

Temiscaming, Quebec, Canada, 12 October 2007 -– Tembec today announced an indefinite idling of PM 3 at its Kapuskasing, Ontario, newsprint mill, effective 23 October 2007. In a separate decision, the company announced the indefinite shutdown of its sawmill in Cochrane, Ontario, commencing 19 October 2007.

“The indefinite idling of PM 3 is necessary due to a combination of poor newsprint market conditions and a wood chip shortage that has occurred largely as a result of the numerous sawmill curtailments in northern Ontario,” said Chris Black, senior vice president, Newsprint Division. “The company has reviewed alternate sources of fiber supply, however, all options were detrimental to the mill’s financial performance.”

PM 3 at the newsprint mill in Kapuskasing has an annual capacity of 100,000 metric tons. The idling will affect approximately 50 employees across the site.

“The indefinite shutdown at the Cochrane sawmill is being taken due to a combination of factors,” said Dennis Rounsville, executive vice president and president of Tembec’s Forest Products Group. “These include poor demand for lumber, declining product pricing, and the continued impact of the high value of the Canadian dollar.”

The Cochrane sawmill has an annual production capacity of 150 Mfbm of SPF lumber and employs approximately 150 people.

Management has already met with employees to inform them of the company’s decisions.

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 at www.tembec.com