Bowater Expects First Quarter 2001 Earnings to be Below Consensus.

Business Editors

GREENVILLE, S.C.--(BUSINESS WIRE)--March 23, 2001

Bowater Incorporated (NYSE: BOW) today announced that it expects reported earnings for the first quarter 2001 to be in the range of $.50 to $.60 per share compared to the First Call consensus of $.76 per share. Our estimate includes a benefit from stock based compensation items of approximately $.11 (based on a stock price of $47 per share). The major factors negatively impacting the first quarter results will be production curtailments in newsprint and market pulp, as well as the decline in market pulp pricing. The March 1 newsprint price increase has been implemented and will mitigate the impact of these factors in the first quarter. Bowater will have curtailed production of 36,000 metric tons of newsprint and 45,000 metric tons of market pulp in the first quarter.

Bowater Incorporated, headquartered in Greenville, SC, is a global leader in newsprint. In addition, the company makes coated and uncoated groundwood papers, bleached kraft pulp and lumber products. Bowater has nine pulp and paper mills in the United States, Canada and South Korea. Bowater also owns and operates a coating operation and three sawmills that produce softwood dimension lumber. These operations are supported by 1.8 million acres of timberlands owned or leased in the United States and Canada and over 14 million acres of timber cutting rights in Canada. Bowater is one of the world's largest consumers of recycled newspapers and magazines. Bowater common stock is listed on the New York Stock Exchange, U.S. regional exchanges and the London Stock Exchange. A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange  (TSE: BWX).

All amounts are in U.S. dollars.

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 our business outlook, assessment of market conditions, strategies, future plans, future sales, prices for our major products, inventory levels, capital spending and tax rates. 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, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The risks and uncertainties relating to the forward-looking statements in this news release include those described under the caption "Cautionary Statement Regarding Forward-Looking Information" in Bowater's annual report on Form 10-K for the year ended December 31, 2000, and from time to time, in Bowater's other filings with the Securities and Exchange Commission.