UPDATE 3-AbitibiBowater looks to grow with new CEO

* New chief executive once led Catalyst Paper

* Garneau will take over at start of new year

* Looks at internal growth, possible acquisitions
(Recasts with chairman’s comments)

By Allan Dowd

VANCOUVER, Dec 10 (BestGrowthStock) – AbitibiBowater Inc (ABH.TO: )
has new chief executive with an eye for controlling costs as
the reorganized paper maker looks to diversify its product mix,
possibly through acquisitions, its chairman said on Friday.

AbitibiBowater said Richard Garneau, a former chief
executive of Catalyst Paper Corp (CTL.TO: ), will take over from
David Paterson, who oversaw the newsprint giant’s
restructuring.

The company, North America’s largest newsprint maker,
emerged from creditor protection on Thursday.

Garneau is a paper industry veteran with skill at
controlling costs as AbitibiBowater reduces its reliance on
newsprint by expanding in areas such as specialty papers, pulp,
and energy, Chairman Dick Evans said.

“Having gone through all the pain of positioning ourselves
as the low-cost producer, the last thing we want to do is let
that slip away,” Evans said in an interview.

Garneau will take over from Paterson at the start of the
year, with the former CEO remaining as an adviser until July.

With its debtload lifted and positive cash flow,
Montreal-headquartered AbitibiBowater now has the ability to
invest in ways it could not before, Evans said.

“We will have the flexibility to look at both organic
investments and even acquisitions,” he said.

Evans acknowledged Garneau is not a mergers and
acquisitions specialist, but says the reorganization gave the
company expertise on how to put together deals as it shed
assets to streamline operations.

Evans said Garneau’s in-depth knowledge of the industry
will help the company decide “exactly what we’re getting into”
in terms of future cost savings and opportunities.

Among the areas it might look to expand in is the
production of coated papers, pulp and lumber — all of which it
already produces — as well as biomass energy from wood
byproducts.

AbitibiBowater was hammered by the decline in newspaper
demand in recent years as newspaper readers and advertisers
shifted to the Internet.

The company expects that over the long term, demand for
newsprint will continue to decline, but demand has been flat in
recent months as the economy has recovered and strong export
sales have offset weakness in North America.

Newsprint sales make up about 38 percent of the company’s
revenue and about half of that is from exports to overseas
markets such as South America, the Middle East and India.

“There you have real growth in newspapers and newsprint
consumption. It took a hit with the global recession, but it
has come back quiet strongly,” Evans said.
(Reporting Allan Dowd, editing by Peter Galloway and Rob
Wilson)

UPDATE 3-AbitibiBowater looks to grow with new CEO