Shermag announces the closure of four plants

          The plants of Dudswell and Placages Lennox, in Québec and
       of Edmundston and Saint-François-de-Madawaska, in New Brunswick

    SHERBROOKE, QC, Dec. 10 /CNW Telbec/ - Shermag Inc., manufacturer of
residential furniture, (TSX: SMG) announced today the closure of four of its
eight plants; those of Dudswell (Bishopton) and Placages Lennox,
Cookshire-Eaton, in Québec and those of Edmundston and
Saint-François-de-Madawaska in New Brunswick. Measures will be taken to assist
these employees in the work transition.
    Company management is in the process of making decisions regarding the
transfer of the furniture collections manufactured in these plants. These
closures affect 320 employees and bring Shermag's total employees to 750.
    These decisions were taken following the analysis made by the Board of
Directors' committee created on November 20, 2007. This Committee is
responsible of identifying the measures to be taken to return Shermag to
profitability and to ensure its long-term viability.
    "It is with the utmost regret that the Company is forced to take such
measures", indicated Mr. Claude Pichette, Chairman of the Board. "Shermag's
situation is part of the crisis that the Canadian manufacturing industry is
dealing with. The effect of factors such as the continued strengthening of the
Canadian dollar, the crisis of the mortgage loans in the United States and its
effect on furniture sales, as well as Asian competition, force Shermag to take
strict measures such as the plant closures to return to profitability as
quickly as possible, he added".

For further information:

For further information: Shermag Inc., (819) 566-1515

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