UPDATE 2-Reuters Summit-AbitibiBowater sees stronger end to 2008

(For other news from the Reuters Paper Summit, click on http:/www.reuters.com/finance/summit/Paper08?pid=500) (Adds background and plans for asset sales, debt refinancing)

By Euan Rocha

NEW YORK, Aug 20 (Reuters) - AbitibiBowater Inc (ABH.N: Quote, Profile, Research, Stock Buzz) (ABH.TO: Quote, Profile, Research, Stock Buzz) expects higher newsprint prices, growth in newsprint exports and a weakening Canadian dollar to improve results over the next few months, Chief Executive David Paterson said on Wednesday.

"Clearly, we'd expect the second half of 2008 to be better than the first half and certainly much better than the end of 2007," Paterson said in a telephone interview as part of the Reuters Paper Summit.

AbitibiBowater, the largest North American newsprint maker, has already pushed through a series of newsprint price increases this year.

Newsprint prices at $720 per tonne are at a 12-year high. The company plans to raise prices by $20 per month for the rest of the year, a move that would take newsprint prices to $820 per tonne.

Paterson said the company is facing resistance to price increases in North America and it is seeing an acceleration in demand declines due to its pricing actions.

North American newsprint demand fell more than 8 percent in the first half of 2008 and newsprint consumption at U.S. daily newspapers is down about 13 percent.

"Emerging markets are critical, particularly in newsprint, as we have the highest newsprint growth rates in Asia, the Middle East and South America," said Paterson.

The company currently exports about 40 percent of its newsprint production overseas and it expects half its production to be headed outside North America by the end of this year, or early next year.

Newsprint demand in India, China and Brazil is growing at a rapid pace, said Paterson, especially since computers and the Internet have not penetrated those markets to the extent that they have in developed countries.

However, Paterson noted that freight costs and availability of cargo space on ships have crimped the pace of export growth.

"No one likes what's happened to freight costs, but we can deal with that. It's really the vessel availability that's constraining (exports)," said Paterson.

The company anticipates that vessel availability will increase in the second half of 2008, as global commodity demand declines slightly, he said.

ASSET SALES

The company, which was formed in 2007 after a merger of Abitibi Consolidated and Bowater, has been exploring the sale of non-core assets, mainly with a view to use the proceeds toward reducing its debt.  Continued...