Bowater Inc.

Bowater Incorporated (NYSE: BOW) today announced that it expects a
third quarter loss of $0.85 to $0.95 per share before gains on asset
sales, severance charges and foreign exchange. This corresponds to a
second quarter loss of $0.86 per share before these items.

Compared to the second quarter, improvements in newsprint, coated
paper and lumber prices were offset by lower market pulp pricing and
higher costs at the Catawba, South Carolina mill. This site incurred
additional costs associated with the third quarter start-up of its
fiberline and the second quarter conversion of its newsprint machine
to coated groundwood papers.

The reported net loss for the third quarter is expected to be $0.80 to
$0.90 per share as compared to a reported net loss of $0.45 per share
in the second quarter.

Bowater Incorporated, headquartered in Greenville, SC, is a leading
producer of newsprint and coated groundwood papers. In addition, the
company makes uncoated groundwood papers, bleached kraft pulp and
lumber products. The company has 12 pulp and paper mills in the United
States, Canada and South Korea and 13 North American sawmills that
produce softwood lumber. Bowater also operates two facilities that
convert a groundwood base sheet to coated products. Bowater's
operations are supported by approximately 1.4 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, the
Pacific Exchange 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. Words such as "expect," "estimate,"
"believe," "intend," "plan," "anticipate" and other similar
expressions also identify these statements. 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 quarterly report on Form
10-Q for the quarter ended June 30, 2003, and from time to time, in
Bowater's other filings with the Securities and Exchange Commission.