Shareholders and Noteholders approve the recapitalization transaction

MONTREAL, Feb. 22 /CNW Telbec/ - Tembec Inc. ("Tembec") announced todaythat the recapitalization transaction announced on December 19, 2007 andoutlined in the Management Proxy Circular dated January 25, 2008 (the"Recapitalization") has been approved by the requisite majority ofshareholders of Tembec ("Shareholders") and the requisite majority of holdersof notes of Tembec Industries Inc. ("Noteholders"). Earlier today, Tembec Inc. held a Special Meeting of Shareholders andTembec Industries Inc. held a Meeting of Noteholders (collectively, the"Meetings") at which votes were held on matters relating to the approval ofthe Recapitalization. The Meetings were held in accordance with the ManagementProxy Circular dated January 25, 2008 and, with respect to the Meeting ofNoteholders, an Order of the Ontario Superior Court of Justice (CommercialList) made on January 24, 2008. At the Special Meeting of Shareholders, all of the resolutions relatingto the approval of the Recapitalization were approved by in excess of 95.34%of Shareholders who voted in person or by proxy. At the Meeting ofNoteholders, all of the resolutions relating to the approval theRecapitalization were approved by in excess of 98.25% of Noteholders who votedin person or by proxy. "We are obviously pleased with the support shown by our shareholders andnoteholders in favor of the recapitalization transaction," said James Lopez,President and CEO of Tembec. "These approvals bring us one significant stepcloser towards the completion of the Recapitalization." Tembec also announced that it reached agreement, as described in moredetail in Tembec's management proxy circular, with Investissement Québec (IQ)and the Société générale de financement du Québec (SGF) in relation to theproposed recapitalization transaction. IQ and SGF currently own all of thepreferred shares of Tembec and IQ is also a lender to Tembec. The Plan of Arrangement relating to the recapitalization transaction issubject to approval of the Ontario Superior Court of Justice and such approvalhearing is being held on February 27, 2008. The recapitalization transactionis expected to close on February 29, 2008. Further information concerning the Recapitalization is available on SEDAR(www.sedar.com), EDGAR (www.sec.gov/edgar.shtml) and Tembec's website(www.tembec.com). Tembec is a large, diversified and integrated forest products companywhich stands as the global leader in sustainable forest management practices.With operations principally located in North America and in France, theCompany employs approximately 8,000 people. Tembec's common shares are listedon the Toronto Stock Exchange under the symbol TBC. Additional information onTembec is available on its website at www.tembec.com. This press release includes "forward-looking statements" with(lessthan)in the meaning of securities laws. Such statements relate to theCompany's or management's objectives, projections, estimates, expectations, orpredictions 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 by the Companythat reflect its experience and its understanding of future developments. Suchstatements are subject to a number of uncertainties, including, but notlimited to, receipt of the approvals necessary to implement theRecapitalization, changes in foreign exchange rates, product selling prices,raw material and operating costs, and other factors identified in theCompany's periodic filings with securities regulatory authorities in Canadaand the United States. Many of these uncertainties are beyond the Company'scontrol and, therefore, may cause actual actions or results to differ fromthose expressed or implied herein. The Company disclaims any intention orobligation to update or revise any forward-looking statements, whether as aresult of new information, future events or otherwise. This press release is not an offer of securities for sale in the UnitedStates and securities may not be offered or sold in the United States absentregistration or exemption from registration.

For further information: Investor Contacts: Michel J. Dumas, Executive
Vice President, Finance and Chief Financial Officer, (819) 627-4268,
michel.dumas@tembec.com; BMO Capital Markets, Financial Advisor to Tembec,
(416) 359-5210, (866) 668-6211 (toll free); Media Contacts: John Valley,
Executive Vice President, Business Development and Corporate Affairs, (416)
775-2819, john.valley@tembec.com; Richard Fahey, Vice President,
Communications and Public Affairs, (819) 627-4387, richard.fahey@tembec.com

PROVINCE INVESTS IN NEW FIRE BASE

HEARST — Ontario is constructing a new fire attack base in Hearst to increase protection for northern communities and forest resources.

Construction of the new $3.9-million fire base is scheduled to begin in early March and be completed in 2009. A brand new warehouse and office building will replace an existing facility and be built according to the principles of Leadership in Energy and Environmental Design, including water and energy efficiency.

“Quick, effective response to forest fire emergencies safeguards northern residents and northern forests,” said Minister of Natural Resources Donna Cansfield. “This new facility will ensure better customer service and more efficient management of forest fires. The best part of this announcement is that our investment will help secure top-quality jobs and top-quality employees.”

The headquarters will house 22 seasonal firefighting staff and four fire operations staff. The new buildings will be built near the Ministry of Natural Resources Hearst District Office to allow greater efficiency and sharing of resources.

The project is part of ReNew Ontario, the McGuinty government's five-year, $30-billion-plus plan to upgrade Ontario's infrastructure.

“The McGuinty government’s ReNew Ontario and other, more recent investments have created nothing less than an infrastructure renaissance in Ontario,” said Public Infrastructure Renewal Minister David Caplan. “By modernizing our public infrastructure and building new facilities like this fire attack base, we are building a better Ontario.”

Ontario Supports Growth of Plywood Mill

HEARST — Ontario is strengthening the local forest industry by providing a grant to Columbia Forest Products to invest in innovative technology that will secure good jobs in Hearst.

The more than $300,000 grant supports the installation of over $3 million in new equipment at Columbia’s Hearst plywood mill. The mechanized scanning and patching equipment will boost the mill’s competitiveness and help secure over 250 jobs.

“Our government is working with businesses in Ontario’s north to create more opportunities for hard-working Ontarians and their families,” said Natural Resources Minister Donna Cansfield. “The Forest Sector Prosperity Fund is helping our forest sector become more competitive, and creating and securing good jobs right here in Northern Ontario.”

“The new equipment means our plywood operation will be more competitive and efficient,” said Tim Schallich, vice president, Northern Division, Columbia Forest Products. “The contribution from the government has helped us to move ahead with this initiative.”

The investment comes from Ontario’s Forest Sector Prosperity Fund. It and the Loan Guarantee Program are part of the McGuinty government’s over $1-billion plan to help forest companies invest in the future of their business and the prosperity of local communities.

To date, the Ontario government’s forest sector investments have created or secured 4,770 jobs and leveraged $376 million in investments province-wide.

Excellent article from today's Globe

PUBLICATION: GLOBE AND MAILIDN: 080460048DATE: 2008.02.14PAGE: B2 (ILLUS)BYLINE: KONRAD YAKABUSKISECTION: Report on Business EDITION: MetroDATELINE: Montreal PQ WORDS: 845WORD COUNT: 844 Thinking outside the woodbox KONRAD YAKABUSKI kyakabuski@globeandmail.com

MONTREAL Leave it to the Sunday New York Times - which has historically consumed more of Eastern Canada's forests than probably any other publication - to (once again) declare the death of paper.

Without a hint of irony, the latest edition of the venerable rest-day read-a-thon profiles a Google employee whose family lives a near paper-free life. Everything in the Uhlik household, from grocery lists to school manuals, has gone digital.

The article reminds readers that global per capita paper consumption has plateaued in recent years. In the wealthiest countries, it has actually declined. "Paper has been dealt a complete death blow," Brewster Kahle, who heads something called the Internet Archive, tells the Times. "When was the last time you saw a telephone book?" It actually matters very little that rich Westerners are using less paper. A two-kilogram per capita, per year increase in the consumption of paper products in India, China and Brazil can create enough demand to more than offset a 10-kilogram drop in the rich nations.

This is in fact the story that is unfolding. Unfortunately, Canada's spindly forest firms have been unable to cash in on this because they lacked the foresight to become global players when they had a chance. They're now saddled with high debt, labour and wood costs and a punishing exchange rate. Dependent on the slumping U.S. market, forest types here have not seen the worst yet.

Canada's forest industry is shrinking as production of pulp and paper shifts to the Southern Hemisphere. By the end of this year, China alone will have added more than 25 million tonnes of new paper-making capacity in the last decade. That's the equivalent of almost three AbitibiBowaters.

You remember Abitibi? Canada's top forest player still ranks as the world's biggest newsprint producer. But it's been chopping capacity faster than a contestant in the Kapuskasing Lumberjack Festival wields a Swede saw.
But, hark, a near lone voice cries out from the forest to offer hope. (No, it's not Barack Obama.) CIBC World Markets analyst Don Roberts, whose advice is sought by governments from New Brunswick to Moscow, offers a compelling case for why Canada's forest sector may have a chance to reclaim its historical advantage.

It stems from what Mr. Roberts calls the convergence of global markets for food, fuel and fibre. The phenomenon will increase the value of Canada's forests, while squeezing pulp and paper producers in the developing world as they struggle to secure wood supply.
Increased relative wealth in the developing world is driving unprecedented demand for foodstuffs. It's a simple equation - the richer you get, the more you eat. Yet, agricultural yields for all but a few crops have stagnated or declined. The result is that more land is needed for agriculture in places like Brazil, displacing the forest plantations that are the main source of raw material for Latin America's pulp mills.

Where plantations exist, they're increasingly devoted to growing forests for energy. In China, the government promises that by 2020, it will set aside 13 million hectares - an area about the size of New Brunswick and Nova Scotia combined - to grow trees to go into biofuel production.
Demand for biofuels is growing in the developing world for largely two reasons: The rising price of oil makes biofuels cost-competitive, and domestic trees are a more secure source of energy than imported oil.

In the developed world, demand for biofuels stems largely from a push for more green energy. The European Union's decision to set a binding 20-per-cent target for renewable energy by 2020 will, Mr. Roberts predicts, increase the continent's demand for wood by more than 200 million cubic metres annually - or about as much as the Canadian forest industry currently harvests in a single year.
The result is that wood will no longer be priced as a commodity used to make paper or lumber, but on its energy equivalency. If that happens, Mr. Roberts explains, the price of a tonne of wood pellets would be the same as for 3.3 barrels of oil - which is a lot more than the wood currently fetches.

For Canada's forest industry, herein lies a second chance. But it requires companies and governments to invest now in the research capacity to produce higher-value-added products - not basic wood pellets - to reflect the market price of the trees. Mr. Roberts foresees traditional pulp mills adding biorefineries alongside that use some of their wood to produce everything from ethanol for vehicles to polyethylene and other renewable plastics.
The competition is already thinking ahead: Finnish-based forest giant UPM-Kymmene is working with partners on producing what's known as Fischer-Tropsch fuel, a synthetic petroleum, from biomass.

If Mr. Roberts is right, as he usually is, Canada's forest companies have an opportunity to reinvent themselves. Will they seize it? Or, like paper in the Uhlik household, will they go the way of the dodo?

ADDED SEARCH TERMS:
GEOGRAPHIC NAME: Canada; Quebec
SUBJECT TERM:forestry; pulp and paper industry; competitiveness

A Visit at Phoscan Martison Mine

By: Daniel Sigouin

Hearst, Ontario - February 7, 2008, it is 10h00 a.m. and we are preparing to leave for the Martison Mine site about 100 km Northwest of Hearst. I am travelling with Steve Dominy Chief Programs Section for Natural Resources Canada, Bertha Sutherland, Economic Development Officer for Constance Lake and Jocelyn Blais a local consultant currently conducting research for La Maison Verte of Hearst.

The Martison Phoscan Project is currently being examined for its potential as the key supplier of phosphate concentrate for a vertically integrated phosphoric acid plant to de developed near Hearst. The plant would utilize the Martison phosphate deposit as well as sulphuric acid. Phoscan is currently conducting a major 6.5 million, 80 holes drilling program focused on moving the project towards a bankable feasibility study.

At our arrival we were greeted by Janet Lowe Executive Vice President and Tim Horner Senior Project Engineer for Phoscan. After a 15 minute safety orientation session we enjoyed a nice lunch concocted by Chef Jeremy Theriault of Hearst and Sous-Chef Wayne Baxter of Constance Lake. Fabulous Italian wedding soup, supper sized hamburgers and the famous poutine are on the menu. Now I understand why weight gain is a concern for some of the workers on site.
The purpose of our trip is to investigate the possibility of conducting research in collaboration with Phoscan to potentially explore possible usage of peat considered as a waste product for Phoscan. The possible deposit of peat at the Phoscan site is significant, as much as 3 meters deep in some places. If you feel like doing the math, the proposed dimension of the excavated area is 700 meters by 1.5 kilometres. While there is a lot of peat in the north, in other regions, wetlands are smaller and there is greater pressure for their preservation as habitat and other values such as protection of water supply.

The properties of peat depend very much on its botanical origin and state of decomposition. Sphagnum peat decomposes slowly and remains quite fibrous. It is probably the material used to make the seedling pots. Peat that is more decomposed, and maybe formed more from other mosses, shrubs, and wood is darker, in smaller fragments, and probably higher in nutrients. Peats are usually acidic and are widely used as peat moss (basically sphagnum). During our visit at Phoscan samples were retrieved at different layers up to 2.5 meters deep. Clay samples were also collected.

Local construction Companies use decomposed peat (black muck) excavated as part of construction, quarrying, and road-building in topsoil mixes. The phosphate mine will provide a new source of peat.

Peat is also used as a potting mix and topsoil ingredient, or as mulch around plantations. Other possibilities to explore are production of peat pellets for fuel, and utilization of peat for Jiffy-type peat pots, possibly with added enhancements such as nutrients or humic fractions.
Although peat is generally treated as a non renewable resource because of its slow rate of renewal, mining represents an opportunity to use the peat as a carbon stock.

References;
Caroline Preston, Hearst Organics Preston revised0108.doc, January 2008
http://en.wikipedia.org/wiki/Peat
http://www.imcg.net/
http://phoscan.ca/

The Need to Adjust in Tough Economic Times

In the Town of Hearst, economic pressures relate to the need to enhance and diversify the local economic base. This need has been propelled to the forefront by a variety of factors. The forestry industry, which has traditionally been the driving force of Hearst’s economy, is in transition. This is attributed to a stiff international competition from Russia and China, a high Canadian dollar, increasing energy costs and the Canada-U.S. softwood lumber crisis. In light of Hearst’s dependency on primary resources, the Town is emphasizing the need to diversify its local economy to more effectively compete with other communities in attracting business investment. This changing economy constantly forces the community to adjust. This adjustment is without doubt a long and agonizing process that does not always guarantee success. Adjustment efforts focus on finding solutions to job losses. The focal point to finding answers to economic downturns always relies on saving existing industries. Today, the business climate is different. Not only the industry is in decline, but it is in the verge of changing dramatically. Resource based economies tend to rely on primary transformation leaving value added opportunities undeveloped. It is without doubt an opportunity for the Hearst Area Economic Development Corporation to act in a proactive way to this situation. The community has to find short term solutions to shift towards a long term vision. The population must think globally and act locally, and most importantly take steps in a coherent way.

In 2006 the Hearst Economic Development Corporation gave birth to the Bio Com project. This integrated approach would help the community to move forward in the new bio-economy. It encompassed critical factors that enabled a healthy community. It also promoted change and the need to make adjustments. Changing attitudes and values within a community is a lengthy and difficult task. Nevertheless, it is critical to maintain in order to achieve sustainability.

The Bio Com Committee was steered by local people who recognized the need for change and were willing to initiate action. The purpose was to create willingness and motivation for change by building the necessary understanding, acceptance and commitment to change.
The forest industry is in transition. Status quo is no longer acceptable, primary producers are being shaken to its core. Forest industries are no longer investing, instead they are liquidating assets, closing century old plants, new plants, and unproductive plants and cancelling new projects. This is a common trend facing North Eastern and North Western Ontario. The results are, job losses and significant downsizing of communities.
Changes are occurring throughout the world. All communities are experiencing change and need to make adjustments. Community leaders must be involved to help deal with and direct these changes. Community leaders and residents have a choice to either plan for change or to let it occur as it will.

On April 13 and 14th, 2007 the Bes Conference was held in the community of Hearst, Ontario. The objective of the conference was to offer participating communities of Northern Ontario and North Western Québec the momentum of reinventing themselves and plan their own future.

The theme of the conference was “Sustainability and growth of forest communities: The challenge in harmonizing bioeconomy, forest ecology and community resilience.

A total of 380 delegates participated at the conference with representation from residents, politicians, students, industry leaders and governments.

The BES Conference participants benefited from the experience and expertise of leaders and practitioners in sustainability, bioeconomy, ecology and climate change, as well as community resilience. These leaders and practitioners came from across Canada and the United States (New York, British Columbia, Quebec and Ontario). This unique networking opportunity has enabled participants to start tracing the road towards the future.

Forest companies along with communities of Northern Ontario and Quebec are experiencing economic and structural changes. Communities are forced to look at new ways of dealing with these ongoing changes.

The communities are at a crossroad. It is time to seize all available opportunities. In this context of change, communities that are healthy, green, sustainable, innovative and open to change will have a promising future.

Sustainability is at the center of this changing economy, and the three pillars that serve as the foundation are the community, the bioeconomy and the ecology.

The Bio Com project, its activities and the BES conference enabled the community to establish key objectives for the community moving forward. As the vision of Bio Com states; “to create an innovative cornerstone community for the world of tomorrow” the main goal moving forward is to have a healthy sustainable community by;

a) Developing a clear community vision;
b) Increasing citizen involvement and participation;
c) Demonstrating leadership;
d) Improving community resilience;
e) Rethinking the use of our natural resources;
f) Building capacity towards innovation and education;
g) Promoting entrepreneurship; and
h) Paying attention to our youth.


Overall the BES conference played an important role in uniting communities and industries. The working sessions confirmed an increasing willingness to work together towards a common vision.

This conference also offered the forest industry the opportunity to discover new ways of using and/or reusing our resources. It also demonstrated the importance of including communities, as a critical factor leading to a better economy.

Hockey Tournaments - A Great Economic Impact

McDonald’s Hockey Tournament

An Economic Development Impact for the Community of Hearst and Area (dollars)

The following is an economic development impact analysis for the Hearst McDonald's hockey tournament held this past weekend. A total of 24 teams participated at the event with an average of 15 players each team. It is estimated that a total of 33 persons were associated with each team.

An expenditure of $114,480 associated with "McDonald's hockey tournament” will generate income, employment and tax benefits in Community of Hearst and area. This expenditure will sustain a total sales volume of $156,219, a total income of $69,708 and total wages and salaries of $48,179. Wages and salaries will account for 69.1% of GPI (Gross Provincial Income) impact.
For every dollar of expenditure a total of $1.36 will be generated in gross sales by "McDonald's hockey tournament " in Community of Hearst and area, this is generally known as the sales multiplier. Also, for every dollar of expenditure a total of $0.61 income will be sustained by "McDonald's hockey tournament” in Community of Hearst, Mattice-Val Coté, Constance Lake, Hornepayne. The latter is commonly known as the income multiplier.


A total of $48,179 of labour income will be generated in Community of Hearst, Mattice-Val Coté, Constance Lake, Hornepayne. This supports a direct effective wage per employee of $29,767 and total effective wage of $32,119. "McDonald's hockey tournament” sustains lower wages than those paid off-site, and "McDonald's hockey tournament” appears to generate above average wages in Community of Hearst, Mattice-Val Coté, Constance Lake, Hornepayne.
Wages & Salaries(dollars)

"McDonald's hockey tournament” is credited with sustaining a total of 1.50 years of permanent full-time job equivalents. This translates into a total of 13.10 jobs per one million dollar of expenditure. For every direct job in the economy at large, an additional 0.36 jobs are sustained.
Employment(person years)

Imports will be required to sustain "McDonald's hockey tournament ". $6,331 will come from other provinces and $14,154 will come from other countries.

Taxes will accrue to all levels of government as income is generated and sales are made to sustain the new demand. A total of $30,512 will be collected; of which the federal governments' share is $16,734, whereas the provincial government's share is $12,881, and the local governments' is $897. On a per dollar of expenditure basis, 27 cents are collected in taxes, 15 cents go to the federal government, 11 cents to the provincial government, and 1 cents to the local government.