Deployment of Retained Earnings in Growth Markets

「Overseas sales were ¥468.5 billion, ¥11.1 billion, or 2.4%, higher than in the same quarter of the previous year, partly due to the acquisition and consolidation of AustroCel and the foreign-currency translation effect of the weaker yen.」

「In January 2026, we completed the acquisition of Austria-based AustroCel, one of Europe's most advanced biorefinery companies, which manufactures and sells dissolving pulp and bioethanol. In November 2025, we also entered into an investment agreement with Nordic Bioproducts Group Oy, which possesses advanced cellulose utilization technologies, and are making the investment in stages.」

「In March 2025, we acquired Chemfield of India, which operates globally in the manufacture and sale of microcrystalline cellulose for the pharmaceutical industry. By adding this company, which operates downstream of the pulp business, to our group, we established an integrated structure covering the manufacture and sale of processed pulp products. In September 2025, we also entered into a share transfer agreement to acquire all shares of Austria-based AustroCel, one of Europe's most advanced biorefinery companies, which manufactures and sells dissolving pulp and bioethanol.」

「Under the share transfer agreement, we acquired all shares on 11 April 2024.」

「With the Walki Group joining our group, we will be able to combine its advanced converting technologies, which we do not currently possess, with our barrier technologies and offer a broader range of environmentally considerate paper packaging solutions. In addition, by pursuing cross-selling, R&D and the use of human resources not only in Japan but also in Southeast Asia and India, our group will expand its circular-economy product portfolio and strengthen its response to environmental regulations and customer needs in each country, with the aim of leading the market as a global supplier of sustainable packaging materials.」

「In October 2023, as part of the "Initiatives to Improve Profitability -Profitability-" program, we entered into a share transfer agreement to acquire all shares of Walki, a Finnish company with advanced raw-material processing technologies in recycling and plastic reduction related to packaging and packaging-waste regulations, with the aim of establishing a foundation for the packaging business in Europe, where environmental regulations are advancing ahead of the rest of the world.」

「In September 2022, we acquired the Adampak Group, a high-performance label printing and converting company with operating bases in 6 countries in Southeast Asia and China.」

「Against this backdrop, we are steadily pursuing important strategies for future growth. In May 2021, Nippaku Paper Resources Development Co., Ltd., the parent company of Celulose Nipo-Brasileira (Cenibra), acquired shares held by non-controlling shareholders as treasury shares. The funds required for this acquisition were financed through external funding and cash and deposits on hand.」

「Going forward, cash flow generated through operating activities will be allocated to dividends and investments. While maintaining interest-bearing debt at an appropriate level, funding shortfalls will be financed through borrowings, commercial paper, bond issuance and other means, while surplus funds will be used to reduce interest-bearing debt.」

「We also plan to make active investments in M&A, capital expenditures and research and development in growth areas, including overseas and new businesses.」

「We intend to use retained earnings to meet funding needs for measures aimed at enhancing future corporate value, including business expansion in growth markets such as emerging economies, thereby further strengthening our operating base and improving performance.」