Montreal - AbitibiBowater announced today that it will permanently close its paper machine at its Coosa Pines, Alabama operation and cease its pilot project to manufacture recycled lightweight and ultra lightweight packaging and linerboard grades within the next 30 days. AbitibiBowater remains committed to its fluff pulp assets at the facility.

"Coosa Pines has made progress in the production of recycled lightweight and ultra lightweight packaging and linerboard. Upon review, however, the substantial capital investment that would be required at the site to make it low-cost in these grades could not be justified," stated Richard Garneau, President and Chief Executive Officer.

The Company estimates it will incur cash closure costs of approximately $4 million related to severance and other closure charges as a result of the permanent closure of the paper machine at the Coosa Pines mill. The majority of these closure costs will be paid during the first half of 2011. A non-cash asset charge of approximately $10 million will be taken to reflect this permanent closure. Approximately 150 employees are affected by this closure.

"The decision to cease paper production at the Coosa Pines mill was difficult as we are mindful of the impact it will have on affected employees," added Garneau.  "The Company also remains committed to customer service and delivery of high-quality products and will work closely with customers to ensure a smooth transition."