Bowater Expects Second Quarter 2001 Earnings to be Below First Call Consensus.

Business Editors

GREENVILLE, S.C.--(BUSINESS WIRE)--July 11, 2001

Bowater Incorporated (NYSE:BOW) today announced that it expects earnings for the second quarter to be $.15 to $.25 per share before gains related to asset sales, and before losses related to foreign currency exchange. This is below the First Call consensus estimate of $.36 per share. Lower pulp prices and downtime in newsprint and pulp negatively affected the company's earnings. The company curtailed production by approximately 70,000 metric tons of newsprint (including downtime related to capital expenditures) and 35,000 metric tons of pulp in the second quarter.

The company will release its second quarter 2001 financial results on Thursday, July 26, 2001, and hold a management conference call to discuss these financial results at 10:00 AM EDT. The conference call number is 888-273-9890 or 612-332-0636 (international). The call will also be broadcast via the Internet. Interested parties may connect to the Bowater web site at www.bowater.com, then follow the on-screen instructions for access to the call. A replay of the call will be available from 1:30 PM EDT on Thursday, July 26, through Thursday, August 2, on the web site or by dialing 800-475-6701 or 320-365-3844 (international) and using the access code 591456.

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. With Bowater's pending acquisition of Alliance Forest Products Inc. (TSE: ALP, NYSE: PFA), the company will have 12 pulp and paper mills in the United States, Canada and South Korea and 13 North American sawmills that produce softwood and hardwood lumber. Bowater also operates a facility that converts a newsprint base sheet to coated products. Bowater's operations when combined with Alliance will be supported by approximately 1.8 million acres of timberlands owned or leased in the United States and Canada and 32 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.