Letter to Shareholders, continued

Organizational Changes

Three of our business leaders retired in 2004: Pat Duffy, President of our Coated and Specialty Papers Division, Art Fuller, President of our Newsprint Division and Rick Hamilton, President of the Forest Products Division (which has now been merged into Bowater’s other operating units). Each of these men leaves a legacy of significant contributions to Bowater, and I thank them for many years of dedicated service.

In conjunction with these retirements, David Maffucci has been appointed President of the Newsprint Division, and William Morris has been appointed President of the Coated and Specialty Papers Division. David was our Chief Financial Officer for the past 10 years, and William was Vice President of International Newsprint Sales for 12 years. Bill Harvey, our Treasurer since 1998, was promoted to the position of Senior Vice President and Chief Financial Officer. Additionally, Jerry Gilmore, formerly Senior Vice President with our newsprint operations now heads up corporate administrative functions. Ron Lindsay was promoted to Senior Vice President – General Counsel and Corporate Secretary. With these and other promotions, I am confident that we have established a strong foundation of leadership for the future of the company.

Last but certainly not least, I would like to thank our employees, shareholders, and customers for their continued support and commitment. We have weathered stormy economic conditions in the recent past, and we have prevailed. The same perseverance that brought us through troubled times now serves as a basis for future growth and success.