Facing an increasing demand for engineered wood products:
Tembec and SGF Rexfor Create a New Joint Venture
Montréal, August 1, 2001 - Tembec and SGF Rexfor announced today that they have formed a 50/50 joint venture to develop the engineered wood products business. The joint venture, Temlam Inc., has acquired the building systems division of Jager Industries Inc. comprising mainly the manufacture and distribution of engineered wood I‑beams, truss connector plates and metal webs for roof and floor trusses as well as the distribution of laminated veneer lumber (LVL), rim joists, hangers and other ancillary products. The purchase price is $75 million, including $25 million in working capital.
In conjunction with the acquisition of the building systems division of Jager Industries Inc., the joint venture also acquires Tembec’s LVL plant located in Ville‑Marie, Québec, for $17 million, including $4 million in working capital. Tembec has entered into a support agreement with the joint venture to continue to provide certain services to the Ville‑Marie LVL plant.
Temlam Inc. will have 6 manufacturing plants in Québec, Ontario and Alberta and will distribute its engineered wood products primarily in Canada and the United States. Total annual sales are initially estimated at $140 million. The venture will capitalize on Tembec’s manufacturing and product expertise in the areas of LVL, finger-joint and machine stress rated (MSR) lumber and Jager’s I‑beam production and well established distribution channels. The joint venture will also seek out other opportunities for growth in the engineered wood products area. The objective will be to establish Temlam Inc. as a major and leading supplier of engineered wood products and capture a larger share of this growing market sector.
In line with this strategy, Temlam has been mandated to pursue the development of a potential new LVL plant in the Abitibi‑Témiscamingue region. Tembec had previously announced its intention to proceed with the project. The partnership with SGF Rexfor increases the likelihood that the project will progress in a timely manner.
Tembec is a Canadian Forest Products company principally involved in the production of wood products, market pulp and papers. The Company has sales in excess of $3.5 billion with more than 40 manufacturing sites in Canada, the United States and Europe. Tembec’s Common Shares are listed on the Toronto Stock Exchange under the symbol TBC. More information can be obtained at its home page at www.tembec.ca.
SGF Rexfor is a subsidiary of the Société générale de financement du Québec whose mission is to carry out economic development projects meeting normal profitability requirements, in collaboration with business partners. Since it was restructured in 1998, SGF has generated investments of about $4.4 billion, creating over 19,400 direct and indirect jobs in the operating phase, not counting the thousands of jobs created during the construction phase. As at December 31, 2000, SGF’s consolidated assets totalled $2.3 billion. SGF has 53 international partners operating in Québec. (sgfqc.com)
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Source: Tembec Inc. SGF Rexfor Inc.
Vice President, Finance & CFO
Vice President, Corporate Relations