Plum Creek Reduces Production at Montana Mills

In response to unprecedented and challenging business conditions in the housing sector and a continuing decline in demand for wood products, Plum Creek (NYSE:PCL) today announced plans to reduce production at its four lumber sawmill facilities and Medium Density Fiberboard (MDF) plant in Montana. These actions will result in the loss of 145 jobs.

Plum Creek will permanently close the Ksanka sawmill located in Fortine in March, a move that will mean a loss of jobs for 74 employees. The company will also temporarily curtail operations at the Evergreen sawmill located in Kalispell for the remainder of January, February and potentially March. Both Ksanka and Evergreen mills produce stud grade lumber for home construction. When lumber markets improve, the Evergreen sawmill will have the capacity to absorb some of the volume previously produced at Ksanka.

Plum Creek’s two pine board sawmills, in Pablo and Columbia Falls, will also see changes as measures are taken to balance production levels with demand. The Pablo sawmill will reduce its operating level from the current 1.5 shifts to one shift, which will result in a loss of jobs for 36 employees. The pine board sawmill at Columbia Falls will temporarily curtail production for the remainder of January, February and possibly into March. The pine board sawmill products are used primarily in home repair and remodeling.

At the Company’s Columbia Falls MDF facilities, weakened demand will require each of the two MDF production lines to scale down to two shifts beginning January 19, reducing the MDF workforce by 35 employees.

"The forest products industry in general and the lumber business in particular have been severely impacted by the battered housing market,” said Rick Holley, Plum Creek president and chief executive officer. "The closure of the Ksanka studmill and reductions in production levels at our other facilities are painful steps to take due to the job losses and impacts to a number of our valued employees. Unfortunately, these steps are necessary to match supply with the eroding demand for our wood products.”

Plum Creek will provide severance to the affected employees at the Ksanka, Pablo and MDF facilities. In compliance with federal law, the Ksanka mill employees were provided with a 60-day advance notice of the mill closing.

Plum Creek is the largest and most geographically diverse private landowner in the nation with more than 7 million acres of timberlands in major timber producing regions of the United States and 10 wood products manufacturing facilities in the Northwest. In Montana, Plum Creek practices sustainable forestry on approximately one million acres throughout eight counties in the western part of the state. For more information on Plum Creek visit www.plumcreek.com.

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