Bowater Incorporated | 2006 Annual Report

Bowater’s strategic focus is based on a strong foundation of fiscal discipline, with debt reduction and cash generation as top priorities.

We are tightly managing our investments, focusing on enhancing the performance of our processes and assets to improve customer service and shareholder return.

Putting excellence into action requires a top-to-bottom approach to challenging our processes and practices. We are focused on identifying, operating and maintaining the most efficient and sustainable manufacturing processes possible. These actions are aimed at producing superior service to customers and improving quality. They are driving costs from our system, increasing productivity and eliminating waste.

To achieve our strategies for cost-competitiveness and higher performance, we must stay ahead of the demand curve. As we move aggressively to optimize our operations, we are working to shift capacity to match production with current demand for our products.

Forward-thinking, fiscally disciplined, action-oriented: This is Bowater.

BOWATER'S PRODUCT MIX: Bowater is one of the largest producers of newsprint in North America. In addition, we have worked aggressively in recent years to expand our coated and specialty papers segment. Sales of our coated and specialty product lines now represent 34% of our total sales, compared to 24% of total sales of in 2002. We offer one of the broadest lines of printing paper grades in North America. As a major producer of market pulp in North America, Bowater serves a broad range of customers. Our pulp and paper operations are supported by a system of sawmills, primarily located in Canada, that provide wood fiber for the mills and high-quality lumber that is sold throughout North America.