Bowater Comments on Third Quarter 2005 and Announces Cost Reduction Program

The company also announced today a program which is expected toreduce annual operating costs by $80 million. This program will befully implemented by the end of 2006 and driven by operating anddistribution cost savings.

"The sharp rise in the Canadian dollar and energy prices requiresus to be even more aggressive at reducing costs," said Arnold M.Nemirow, Chairman, President and Chief Executive Officer. "We havebeen very successful in implementing significant cost reductionprograms in the past, and I expect we will execute this program in thesame manner."

All amounts are in U.S. dollars.

Bowater will release third quarter financial results before themarket opens on Wednesday, October 26, 2005. A management conferencecall will be held to discuss these financial results at 10:00 a.m.EDT, October 26, 2005. The conference call number is 800-288-8967 or612-234-9960 (international). The call will also be broadcast via theInternet. Interested parties may connect to the Bowater website atwww.bowater.com, then follow the on-screen instructions for access tothe call and related information. A replay of the call will beavailable from 1:30 p.m. EDT on Wednesday, October 26, throughWednesday, November 2, on the website or by dialing 800-475-6701 or320-365-3844 (international) and using the access code 798866.

Bowater Incorporated, headquartered in Greenville, SC, is aleading producer of newsprint and coated mechanical papers. Inaddition, the company makes uncoated mechanical papers, bleached kraftpulp and lumber products. The company has 12 pulp and paper mills inthe United States, Canada and South Korea and 12 North Americansawmills that produce softwood lumber. Bowater also operates twofacilities that convert a mechanical base sheet to coated products.Bowater's operations are supported by approximately 1.4 million acresof timberlands owned or leased in the United States and Canada and 30million acres of timber cutting rights in Canada. Bowater is one ofthe world's largest consumers of recycled newspapers and magazines.Bowater common stock is listed on the New York Stock Exchange, thePacific Exchange and the London Stock Exchange. A special class ofstock exchangeable into Bowater common stock is listed on the TorontoStock Exchange (TSX: BWX).

Operating income, in accordance with U.S. generally acceptedaccounting principles, is expected to be in the range of $44 to $49million, including a gain of approximately $9 million on the sale ofassets.

Statements in this news release that are not reported financialresults or other historical information are "forward-lookingstatements" within the meaning of the Private Securities LitigationReform Act of 1995. They include, for example, statements about ourbusiness outlook, assessment of market conditions, strategies, futureplans, future sales, prices for our major products, inventory levels,capital spending and tax rates. These forward-looking statements arenot guarantees of future performance. They are based on management'sexpectations that involve a number of business risks anduncertainties, any of which could cause actual results to differmaterially from those expressed in or implied by the forward-lookingstatements. The risks and uncertainties relating to theforward-looking statements in this news release include thosedescribed under the caption "Cautionary Statement RegardingForward-Looking Information" in Bowater's annual report on Form 10-Kfor the year ended December 31, 2004, and from time to time, inBowater's other filings with the Securities and Exchange Commission.