Tembec hands down ultimatum
January 22, 2009 By Pulp & Paper Canada
Tembec is warning suppliers that unless they slash their prices by 20%, they’ll lose the forestry company&rsq…
Tembec is warning suppliers that unless they slash their prices by 20%, they’ll lose the forestry company’s business. A letter from CEO James Lopez to companies that supply materials to Tembec notes that shrinking demand for its products has forced the company to cut production.
According to a report by the Globe and Mail, starting February 1, all suppliers providing materials to Tembec will have their prices reduced by 10%, while those providing services will be subjected to a 20% cut, Lopez confirmed in his letter. “If this request cannot be accommodated, we will be forced to take our business to another supplier. I trust that you will continue to be an important and long-term supplier to Tembec, and that you will accommodate our request. We will have to work together to get through the current economic crisis and maintain a strong business relationship,” the Globe reported him as saying.
While the letter represents a break with the norm, which typically involves negotiation with suppliers on an individual basis, the Globe and Mail reported Tembec as saying those who received the letter have expressed understanding and support.
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