Ainsworth Lumber Investigating Alternative Uses for the Grand Rapids OSB Site

2.4.09

Vancouver, British Columbia – Ainsworth Lumber Co. Ltd. (“the Company”) is investigating alternative uses for a 223-acre industrial site in Grand Rapids, Minnesota that had previously served as an Oriented Strand Board (OSB) mill for the Company. Ainsworth is also actively promoting the sale of the site and has retained Cushman & Wakefield to market the property to prospects across the globe. The Company had acquired the facility in 2004 from Potlatch Corporation and discontinued manufacturing operations in 2006 because of very weak conditions in the housing markets that the mill served.

As part of its effort to return the facility to productive use and replace the jobs that were lost Ainsworth has been working with the Itasca Economic Development Corporation (IEDC) to investigate the feasibility of redeveloping the site as a multi-tenant Eco Industrial Park for tenants focused on producing clean, renewable, and/or sustainable energy products. According to Diane Weber, IEDC President, “This strategy is a win/win. Our tenants would be in an environment that nurtures the energy industry and could include services such as customized training, financial incentives, and R&D. In return, the community gets jobs in a growing industry and a diversification of our area’s economic base”. Ainsworth has also been in contact with officials at the Iron Range Resources and Rehabilitation Board (IRRRB) and the Minnesota Department of Employment and Economic Development (DEED) officials about the possible reuse and sale of these facilities and other Ainsworth sites in Cook and Bemidji Minnesota.

“It is truly unfortunate that we were forced to shut this facility in Grand Rapid, as it is such great community” said Rick Huff, Ainsworth CEO. “We are pleased to be working with the IEDC and Cushman and Wakefield to find alternative uses for the site. We welcome all the support that we have received from the local and state authorities in Minnesota. Unfortunately, our own leveraged balance sheet prevents us from investing our own capital in these efforts, but we want to be as helpful as we can in creating jobs in the region.”

Cushman & Wakefield is also promoting the site’s redevelopment/expansion opportunity in its marketing efforts. According to them, the site has drawn considerable interest from companies involved in the bio energy industry (wood pellet manufacturing), wind energy (turbine and blade manufacturers), as well as companies involved in certain mining related functions. Somewhat inexplicably, the Minnesota legislature is considering legislation that would limit the use of this site to Oriented Strand Board manufacturing for two years. For more information on the legislation see House File 1699/Senate File 1459.

Constructed in the early 1970s by Blandin Paper Company as a manufacturing facility for Oriented Strand Board (OSB), the facility was expanded in the early 1980s and sold to Potlach Corporation in 1990. Today, the site serves as a warehouse, office, and storage facility for Ainsworth.

The property, which includes approximately 400,000 square feet of existing manufacturing, warehouse, and distribution space, offers proximity to Highway 2 (east/west) and Highway 169 (north/south) and is located adjacent to the Mississippi River flowage just west of Grand Rapids. The site is rail served by the Burlington Northern Santa Fe (BNSF) Railway and features significant power capacity as a former manufacturing facility.

Cushman & Wakefield is leveraging its global real estate platform to market the site to prospects throughout the United States, Europe and Canada. “Given the rapid decline in U.S. housing starts – the key driver of OSB demand – it is highly unlikely the Grand Rapids facility will be required for OSB manufacturing in the near future,” said Doug Fulton, the leader of the Cushman and Wakefield team. “Instead, we are aggressively marketing the site to a variety of companies with the potential for alternative uses.”

Ainsworth Lumber Co. Ltd. (TSX: ANS and ANS.WT) is a leading Canadian forest products company with a 50-year reputation for quality products and unsurpassed customer service, with Canadian operations in British Columbia, Alberta, and Ontario Ainsworth’s engineered wood products are marketed throughout the world and include oriented strand board (OSB), oriented strand lumber (OSL), and specialty overlaid panels

Cushman & Wakefield is the world’s largest privately-held commercial real estate services firm. Founded in 1917, it has 230 offices in 58 countries and 15,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies.

Forward-looking information provided in this news release relating to the Company’s future prospects are forward-looking information pursuant to National Instrument 51-102 promulgated by the Canadian Securities Administrators. The Company believes that expectations reflected in such information are reasonable, but no assurance is given that such expectations will be correct. Forward-looking information is based on the Company’s beliefs and assumptions based on information available at the time the assumption was made and on management’s experience and perception of historical trends, current conditions and expected further developments as well as other factors deemed appropriate in the circumstances. Investors are cautioned that there are risks and uncertainties related to such forward-looking information and actual results may vary. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking information include, without limitation, factors detailed from time to time in the Company’s periodic reports filed with the Canadian Securities Administrators and other regulatory authorities. The forward-looking information is made as of the date of this news release and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as explicitly required by securities laws.

For further information please contact:
Ainsworth Lumber Co. Ltd.
Suite 3194, Bentall 4
P.O. Box 49307
1055 Dunsmuir Street
Vancouver, B.C. V7X 1L3
Telephone: 604-661-3200
Facsimile: 604-661-3201

Investor Relations Contacts:
Robert Allen
robert.allen@ainsworth.ca