May 17, 2005. /Lesprom Network/. Tembec today announced another phase in its plan to restructure its Eastern Canadian operations, resulting in the closure of four of its manufacturing units. The Company believes that these closures are necessary in light of the stronger Canadian dollar and other fundamental issues that affect the competitiveness of these mills. “After making considerable efforts to stem the significant losses of these mills and find appropriate solutions to the challenges that they are facing, the Company came to the conclusion that it had no choice but to shut down these operations,” said Tembec President and CEO, Frank Dottori. The main points of the announcement are as follows: Tembec’s Saint-Raymond mill, located in Saint-Lйonard-de-Portneuf, Quebec, will cease operations on May 28, 2005, affecting 165 employees. The mill produces 68,000 tonnes of Hi-Brite papers annually. The Company will gradually cease operations at the Tembec Davidson sawmill in Mansfield-et-Pontefract, Quebec, affecting 209 employees. The site produces 55,000 mfbm of pine and hardwood lumber annually. Tembec will shut down sawing operations at the TKL sawmill in Temiscaming, Quebec, as of July 11, 2005, affecting 29 employees. The sawmill produces 15,000 mfbm of pine and hardwood lumber annually. The chip plant operations will continue. Marks Lumber Ltd, a wholly-owned Tembec remanufacturing facility located in Brantford, Ontario, will shut down as of today, affecting 56 employees. The facility has been processing SFP lumber at a rate of 50,000 mfbm per year. During a series of meetings held late last night and earlier today at each site affected, employees and union representatives were informed of the Company’s decision. As a result of today’s announcement, the Company will record an unusual charge of $98.3 million related to the reduction in the carrying value of these facilities. Other closure costs of $13.7 million will also be recorded. The after-tax effect of $75.7 million will be recorded in the June 2005 quarter. During the last twelve months, the facilities generated sales of $112.7 million and negative EBITDA of $14.7 million.