UPM Price Increase Effective July 1, 2018

Tembec Inc. (TSX: TMB) ("Tembec" or the "Company") today provided an update in response to the recent public broadcast solicitation by Oaktree Capital Management, L.P. ("Oaktree") in connection with the proposed acquisition (the "Arrangement" or the "Transaction") by Rayonier Advanced Materials Inc. ("Rayonier AM") of all of the issued and outstanding common shares of Tembec (the "Tembec Shares").

Fourth Quarter 2017 Relative to Third Quarter 2017: Net sales of $43.5 million in the fourth quarter decreased $1.7 million, or 3.7%, from the third quarter driven by seasonality factors. Converted product sales declined $1.5 million; a decline of $1.9 million due to volume, offset by higher average-selling prices having a positive impact of $0.4 million. Parent roll sales decreased $0.2 million, as the effect of lower sales volume outpaced an increase in the average selling price compared to third quarter 2017. Average selling prices were, to a degree, positively impacted in the fourth quarter by the inclusion of Orchids' new ultra-premium products manufactured at Barnwell. Cost of goods sold, net of depreciation, in the fourth quarter declined by $2.5 million to 84.6% of net sales, down from 87.0% in the third quarter, representing our second consecutive decline as a percentage of sales. Total cost of sales increased to 94.2% of revenue in the fourth quarter, up from 93.9% in the third quarter. Total depreciation increased to 9.6% of net sales in the fourth quarter from 6.9% of net sales in the third quarter as a result of the addition of the Barnwell facility. Click Read More below for additional information.

Mactac® has acquired CSI – SoCal, a custom slitting and distribution center for roll label printers located in Ontario, Calif., under an asset purchase agreement. A $2.5 million investment, the acquisition is the latest in a major Mactac operational expansion plan. The strategically located West Coast finishing center provides Mactac a turnkey, high-performing roll label slitting and distribution center with a talented operations team and newer world-class slitting assets. Mactac is also investing nearly $10 million in expanding its slitting and service capability, including installing five new world-class slitters across its North America network beginning this summer. The strategic move is part of an ongoing commitment by Mactac to deliver the roll label market and customers' enhanced products and services, supply chain continuity, and added reliability.