Bowater Comments on First Quarter 2007 Financial Results

    GREENVILLE, S.C., March 27 /CNW/ - Bowater Incorporated (NYSE:  BOW) today
announced that it expects first quarter operating income to be $15 to $20
million below fourth quarter levels, excluding any gains from asset sales and
other non-recurring items. In the first quarter, the company has experienced
significant recycled fiber cost pressures, with the cost for old newsprint
increasing by approximately 35% since December. In light of weak newsprint
demand in North America, which has declined by 12% year-to-date compared to
2006, the company has curtailed production of newsprint and specialty papers
during the quarter at its Gatineau, Quebec mill and selected other machines
that are heavily dependent upon recycled fiber. In addition, lumber demand
continues to be weak with low pricing through the first quarter.

    "We are extremely disappointed by our anticipated first quarter financial
performance," said David J. Paterson, Chairman, President and Chief Executive
Officer. "While North American newsprint demand and lumber pricing continues
to be weak, we will remain strictly focused on containing controllable costs
and matching our production to demand. That said, our pulp business is
performing well with strong pricing across all grades."

    Bowater Incorporated, headquartered in Greenville, SC, is a leading
producer of coated and specialty papers and newsprint. In addition, the
company sells bleached market pulp and lumber products. Bowater employs
approximately 7,400 people and has 12 pulp and paper mills in the United
States, Canada and South Korea. In North America, it also operates one
converting facility and eight sawmills. Bowater's operations are supported by
approximately 815,700 acres of timberlands owned or leased in the United
States and Canada and 28 million acres of timber cutting rights in Canada.
Bowater operates six recycling plants and is one of the world's largest
consumers of recycled newspapers and magazines. Bowater common stock is listed
on the New York Stock Exchange. A special class of stock exchangeable into
Bowater common stock is listed on the Toronto Stock Exchange (TSX: BWX). To
learn more, visit

    Forward-Looking Statements

    Statements in this news release that are not reported financial results
or other historical information are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. They include,
for example, statements about expected operating income and financial
performance generally in the first quarter of 2007, our business outlook,
assessment of market conditions (including demand for newsprint, pulp and
lumber products), strategies (including anticipated execution of our
production and cost reduction strategies and opportunities related thereto),
recycled fiber costs, and the continuation of operational improvements
generally. Forward-looking statements may be identified by the use of
forward-looking terminology such as the words "expects", "projects",
"intends", "believes", "anticipates", and other terms with similar meaning
indicating possible future events or actions or potential impact on the
business or shareholders of Bowater.

    These forward-looking statements are not guarantees of future
performance. They are based on management's expectations that involve a number
of business risks and uncertainties, which could cause actual results to
differ materially. These risks and uncertainties include, but are not limited
to, negative industry conditions and further growth in alternative media,
actions of competitors, Canadian dollar exchange rates, the actual realization
of cost reduction strategies, the demand for higher margin coated and uncoated
mechanical paper, and the costs of raw materials such as energy, chemicals and
fiber. Additional factors listed from time to time in Bowater's Securities and
Exchange Commission filings, including those described in the company's annual
report on Form 10-K for the year ended December 31, 2006 under the caption
"Cautionary Statements Regarding Forward-Looking Information and Use of Third
Party Data." Bowater disclaims any obligation to update these forward-looking

    Any information about industry or general economic conditions contained
in this press release is derived from third party sources that the company
believes are widely accepted and accurate; however, the company has not
independently verified this information and cannot assure its accuracy.

For further information:

For further information: Bowater Incorporated Investor Contact: Duane A.
Owens, 864-282-9488 or Media Contact: Kathleen M. Bennett, 864-282-9452

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