AbitibiBowater Announces Plan to Restart Ignace Sawmill

• Will Invest C$32 Million Over the Next 24 Months

MONTREAL, Aug. 29, 2011 /PRNewswire/ - AbitibiBowater (NYSE: ABH) (TSX: ABH) announced today a capital investment plan that will lead to the restart and upgrade of its currently idled sawmill located in Ignace, Ontario. The C$32 million investment includes the addition of an energy system and kilns to dry lumber, and a planer and packaging system to allow for the production of finished lumber ready for market. Engineering, design and construction activities will occur over the next two years, with a return to production forecast for 2014. The investment is subject to the Company reaching an acceptable labor agreement with the United Steelworkers union and finalizing an agreement on municipal matters with the Township of Ignace.

The Ignace project is consistent with AbitibiBowater's overall strategy of achieving greater efficiency with existing assets, focused growth and building on proven competencies, according to Richard Garneau, President and Chief Executive Officer of AbitibiBowater. "Assuming satisfactory outcomes in discussions with the United Steelworkers and the Township of Ignace, the project announced today will result in a sawmill of good scale by eastern Canadian standards and will allow the Company to more efficiently use the wood supply presently available to us," stated Garneau. "Lumber is and will remain a core business for the Company, particularly where it can favorably affect the economics of our pulp and paper facilities. Once the restart and upgrade are completed, Ignace will be well-positioned to supply both the domestic and U.S. markets."

"We are currently planning on a design and construction schedule running through 2012-13, and a return to full production in late 2013/early 2014. The sawmill will also contribute to improving the cost of fiber for our pulp and paper mills in Thunder Bay and Fort Frances," said Yves Laflamme, Senior Vice President, Wood Products, Global Supply Chain and Information Technology.

This is the fourth significant announcement by AbitibiBowater in Ontario, resulting in over C$100 million in investments. "We have a strong relationship with the Province of Ontario, and we are working together on creating better conditions for capital investments. We would in particular like to thank the Honourable Michael Gravelle, Ontario Minister of Northern Development, Mines and Forestry, for his support," concluded Richard Garneau.

AbitibiBowater and other member companies of the Forest Products Association of Canada, as well as a number of environmental organizations, are partners in the Canadian Boreal Forest Agreement. The group works to identify solutions to conservation issues that meet the goal of balancing the three pillars of sustainability linked to human activities:  economic, social and environmental.

AbitibiBowater is a global leader in the forest products industry, producing a diverse range of products, including newsprint, commercial printing papers, market pulp and wood products. The Company owns or operates 18 pulp and paper mills and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in close to 90 countries, AbitibiBowater also has third-party certified 100% of its managed woodlands to sustainable forest management standards. The Company's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.

SOURCE ABITIBIBOWATER INC. - ENGLISH

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