Paper Mills, continued

Some of Bowater’s newsprint machines have been converted to meet the increased demand for uncoated specialty papers. For instance, at our Calhoun, Tennessee, operation we have increased our fiber refining capabilities, adding to both the quality and the number of various paper grades that can be produced. At one time, that facility’s entire paper production was newsprint. Today, around 30% of Calhoun’s production is focused on higher margin specialty papers with most of the shift occurring in the past year.

Other Bowater newsprint mills that are producing uncoated specialty papers include our operations in Gatineau, Quebec, and Thunder Bay, Ontario.

The Catawba, South Carolina, operation performed well in 2004, setting significant paper production records making lightweight coated paper. We believe this is the most efficient and lowest-cost coated mechanical operation of its kind in North America. The major conversion of the No. 3 Paper Machine was completed just as market demand accelerated for coated papers, allowing us to have quick and solid market penetration with our increased production capabilities.

At our Donnacona, Quebec, operation, a major process improvement was implemented for our supercalendered sheets to enhance pressroom performance. Our Dolbeau, Quebec, facility has developed lighter-weight supercalendered papers in answer to customer needs.