Tembec provides status report regarding fire at Chetwynd BC High Yield Pulp
Mill

TEMISCAMING, QC, July 5 /CNW Telbec/ - Tembec today provided an update regarding a fire at the Company's high yield pulp mill in Chetwynd, BC. The fire started on Wednesday, June 30, in the late afternoon. Emergency procedures were followed and there were no injuries to any employees. In addition to the Chetwynd Volunteer Fire Brigade and employees, fire fighting support from the Fort St. John and Dawson Creek fire departments was received, as well as from the BC Ministry of Forests. The Company acknowledges the timely and diligent response of these organizations with gratitude.

The fire and related damage is primarily concentrated in the log storage and chip pile area of the mill site. There was also some damage to the scales, chip receiving and unloading equipment, chip conveyors and related electrical services. Assessments by mill personnel and outside resources have indicated that damage to the pulp production area of the mill is relatively minor. In terms of direct loss, it is estimated that roughly 40,000 cubic metres of fibre (chips and logs) were destroyed. While the chip and log piles continue to smolder, the situation is considered well under control.

Site personnel and outside resources are already beginning their work at the mill to address electrical and mechanical repairs, with procurement and delivery of necessary materials and equipment already well underway. Current estimates are that the mill will be out of service for between 14 and 18 days from the date of the fire, resulting in lost production of approximately 10,000 tonnes. The Company indicated that there will be no disruption of supply to contract business, given the fact that it has two other high yield pulp mills from which to supply the needs of its customers.

Tembec maintains property and business interruption insurance on all of its facilities and the deductible to be absorbed by the Company on large claims is $5 million. This event will likely exceed this deductible limit.

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.

    
    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 "will",
    "anticipate", "estimate", "expect" and "project" or variations of such
    words. These statements are based on certain assumptions and analyses
    made by the Company in light of its experience and its perception of
    future developments and may not be appropriate for any purposes other
    than what is stated herein. 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
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    control of the Company and, therefore, may cause actual actions or
    results to materially differ from those expressed or implied herein. 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.
    

For further information: John Valley, Executive Vice President, Business Development and Corporate Affairs, Tel.: [phone], [email protected]; Michel J. Dumas, Executive Vice President, Finance and Chief Financial Officer, Tel.: [phone], [email protected]