Ainsworth Lumber to Close One OSB Line at Bemidjl, Minnesota

Vancouver, British Columbia, Canada, 30 August 2006 -- Ainsworth Lumber Co. Ltd. today announced that it is permanently closing one of the production lines at its oriented strand board (OSB) mill located in Bemidji, Minnesota, USA, effective immediately.

This mill currently operates two production lines. The line that will be closed is producing approximately 280 million square feet (3/8-inch basis) annually. Ainsworth will continue to operate the second production line at the Bemidji site, which currently produces approximately 300 million square feet (3/8-inch basis) per year.

"The high costs of production, coupled with current market conditions, made it economically unsustainable to continue operating this line", said Brian Ainsworth, chairman and CEO. "Following a lengthy review of its long-term viability, the decision was made to close this operation now versus sometime in the future. We regret the impact of this difficult decision on our employees and the community, however, the age and condition of this facility makes the closure necessary."

The closure will eliminate about 110 jobs. Ainsworth will provide the affected employees with 60-days pay in lieu of notice. they will also receive severance pay, employment transition counseling, and associated benefits. The remaining workforce of 150 employees will continue to operate the second production line.

The production line being closed was built in 1981 and was acquired in 2004 as part of Ainsworth's acquisition of Potlatch Corporation's OSB business. Ainsworth continues significant operations in Minnesota, employing approximately 490 employees at three OSB manufacturing facilities in Grand Rapids, Cook, and Bemidji, with a combined annual production capacity of approximately 1.1 billion square feet (3/8-inch basis).

Headquartered in Vancouver, British Columbia, Ainsworth is North America's fourth largest manufacturer and marketer of OSB.