PRESS RELEASE

Kelowna, BC - Tolko Industries Ltd. announced today that operations at its Kelowna Plywood Division will be significantly and permanently downsized over the next few months. The ongoing panel operation will consist of 1 lathe shift and related drying operations. Kelowna plywood employees were given Working Notice today as per the Employment Standards Act and the Labour Relations Code that the completion of this transition will be no later than January 5, 2007. The closure will remove approximately 180 million square feet of plywood from the marketplace. Sawmill operations in Kelowna will continue with its current level of production.

The closure is a direct result of both significant, structural changes in the North American plywood markets and the devastating effect of the mountain pine beetle in the Interior of B.C. The beetle has critically reduced the ongoing availability and increased costs of the high quality logs required to support Kelowna’s veneer and plywood business.

Jim Baskerville, Regional Manager Veneer & Plywood says the company recognizes the impact this closure will have on the Kelowna Plywood Division employees. “We sincerely thank all of the employees for their contributions to the company and the community over these many years.”

Jim concluded, “Tolko remains committed to meeting the changing needs of its customers. As we look to the future we view plywood as an integral part of our product mix.”

The site will continue to employ over 200 workers in the veneer plant and the sawmill operation.

For further information, please contact:

Greg Maralia
Site Manager - Kelowna
Phone: 250.861.6972

OR

Jim Baskerville
Regional Manager, Veneer & Plywood Operations
Phone: 250.546.2212

OR

Sheila Catlin
Manager, Corporate Communications
Phone: 250.549.5326

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