Tembec Temporarily Shuts Down Its Béarn, La Sarre, and Taschereau, Quebec, Sawmills

Temiscaming, Quebec, Canada, 03 October 2006 – Tembec today announced a temporary shutdown at its Béarn, La Sarre, and Taschereau sawmills in Quebec. The Béarn mill will shut down on 09 October 2006, for an indefinite period, while La Sarre and Taschereau mills will cease operations on 13 October, for an indefinite period also.

"This is a very challenging time for lumber producers generally and for those in Quebec, in particular. Demand has slowed in both U.S. and Canadian markets and prices have fallen significantly. At the same time, the cost for the most critical input – sawlogs – has risen dramatically in Quebec over the past several years and remains unaddressed," said Dennis Rounsville, executive vice president and president of Tembec's Forest Products Group. "The status quo is simply not an option and we are prepared to work with all relevant department agencies and stakeholders to address the cost issue."

"Obviously, we regret the impact of this action on our employees. However, given the market conditions and the regional cost structure, it was unavoidable," concluded Rounsville.

The three sites have a combined annual SPF lumber capacity of 295 million board feet. The total number of affected employees is in excess of 435, with 150 people working at Béarn, 148 at La Sarre, and 138 at Taschereau. Meetings were held with employees at each of the sites earlier today.

Tembec is a large, diversified and integrated forest products company. With operations principally located in North America and in France, the company employs approximately 10,000 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.