February 13, 2009 / 3:49 PM / 9 years ago

UPDATE 1-Tembec to cut 100 jobs, freeze salaries

Feb 13 (Reuters) - Canada’s Tembec Inc TMB.TO said it will cut 100 jobs and implement a salary freeze for 2009 in an effort to preserve capital amid depressed markets for lumber, pulp and newsprint.

The forest products company, which expects the downturn in pulp markets to last for several quarters, said it has also targeted a 10 percent cost reduction from material suppliers and a 20 percent cost reduction from service suppliers.

Other cost cutting measures include a reduction in travel expenses and a review of the company’s participation in all associations and research institutes, Montreal-based Tembec said.

The company also said it will permanently close its hardwood sawmill in Mattawa, Ontario, which had been idled since July and employed 59 people.

These initiatives follow earlier temporary shutdowns of facilities in four Canadian provinces and in France.

The company, which posted a C$60 million ($48.39 million) loss for its first quarter, had said earlier this month it will idle several of its Canadian facilities, affecting about 1,400 employees.

Tembec shares, which have lost more than 60 percent of their value over the past six months, were trading down 6 Canadian cents at C$0.98 Friday morning on the Toronto Stock Exchange. ($1=1.240 Canadian Dollar) (Reporting by Krishna Chaithanya in Bangalore; Editing by Anthony Kurian)

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