AbitibiBowater Newsprint Price Increase

November 21, 2007

Article by: Resolute Forest Products

November 20 2007

Dear Valued Customer

Today we are announcing a $60 /mt increase in our North American 48.8 gsm newsprint price. In an effort to be sensitive to our customers’ business we will be implementing the increase in a staged manner – $20 January 1st $20 February 1st and $20 March 1st.

Equivalent adjustments will be made for 45 gsm. Also effective January 1 52.0 gsm will be priced the same as 48.8 gsm and will not be yield-adjusted.

We have undertaken a range of steps over the past few years to respond to the new market reality. The recent combination of Abitibi-Consolidated and Bowater is the most recent move to take costs out of our organization to meet the challenge that lies before us. Both predecessor companies had significantly reduced costs and AbitibiBowater has set an aggressive synergy target for the new company. Unfortunately cutting costs alone will not return our Company to profitability.

In the last year as pricing has fallen substantially we have faced continued increases in fiber and energy input costs. At the same time the U.S. dollar has continued to weaken compounding the negative impact on our financial results. We are absolutely committed to be a long term high quality supplier of newsprint to our N.A. customers. As such returning the revenue side of our business to an acceptable level is a critical component of our long term viability.

If you have any questions regarding this increase or any other matters please feel free to contact myself or your sales representative. Your business is important to us and we appreciate the opportunity to serve you.


Colin Keeler
Vice President
North American Newsprint Sales
Tel. (914) 640-8615
Email: Colin.Keeler@AbitibiBowater.com