Structural transformation of the printing paper business and shift in product mix

「Although the average selling price of printing paper increased as price revisions took effect, demand centered on flyers and brochures continued to decline as digitalization accelerated, and both sales volume and revenue fell below the previous fiscal year.」

「As the structure of demand in the domestic market undergoes significant change, we are shifting the focus of the paper and paperboard business from expanding net sales to securing stable earnings. We will promote measures including strengthening highly processed finished products such as corrugated packaging and packaging fields that can contribute to reducing or eliminating plastics, as well as cost-structure reforms through the strategic business alliance with Hokuetsu Corporation.」

「Although demand for packaging paper declined, sales volume and revenue both exceeded the same period of the previous year due to increased sales of environmentally considerate products and growth in the functional materials segment and export sales.」

「Domestic demand for printing paper, mainly for flyers and brochures, continues to decline as digitalization accelerates. However, increased export sales lifted sales volume above the same period of the previous year, while revenue remained at approximately the same level. Packaging paper was affected by declining demand in the paper bag sector due to the shift toward reduced packaging, but sales volume and revenue both exceeded the same period of the previous year owing to growth in industrial applications, plastic-reduction and specialty applications, and export sales.」

「As a shift in applications outside the paper and paperboard business, we converted No. 15 machine into fluff pulp production equipment and began commercial operation in July 2023.」

「Alongside the shift in product mix toward value-added products and thorough energy conservation and fixed-cost reductions, we continue to work on passing through price increases for the key products of both the paper and paperboard and Home & Personal Care segments.」

「Conversion of the N7 machine to paperboard production was completed in April 2020. Although the initial plan called for sales of 25,000 tonnes per month, the current level has increased to 32,000 tonnes per month.」

「No. 15 paper machine at the Mishima Mill, the equipment in question, was shut down in March 2021. We believe that structural reform of the printing paper business has advanced further by raising the operating rates of the other printing paper machines.」

「Demand for paperboard and corrugated products in Japan has been recovering from the decline during the COVID-19 pandemic, particularly in the e-commerce and delivery sectors. In addition, production and sales of paperboard for export from No. N7 paper machine at the Mishima Mill have remained firm, resulting in sales volume and value both exceeding the same quarter of the previous year.」

「In anticipation of solid demand in Japan and overseas, we will increase production of corrugating medium at No. N7 paper machine at the Mishima Mill to 30,000 tonnes per month, thereby expanding exports to Asian countries and strengthening the framework for stable domestic supply.」

「We modified No. N7 paper machine at our core Mishima Mill and began commercial operation last April as a paperboard production machine primarily for overseas markets, thereby advancing the shift from “media-use paper” to “packing and packaging-use paper.” We are also pursuing structural reform across segments, including stopping No. 15 paper machine at the Mishima Mill, which produced printing paper, and converting it to in-house production of fluff pulp used in disposable diapers.」

「In April, we began commercial operation of No. N7 paper machine at the Mishima Mill, primarily as a production machine for high-burst-strength paperboard products for overseas markets. By steadily advancing the structural shift from “media-use paper” to “packing and packaging-use paper,” which we have pursued for some time, we are responding to changes in the business environment.」

「In response to changes in demand structure, we converted No. N7 paper machine at the Mishima Mill from printing paper production equipment into paperboard production equipment with one of the highest levels of competitiveness in Japan and began commercial operation in April 2020.」

「In October 2019, we began modifying No. N7 paper machine at the Mishima Mill, a printing paper production machine, and plan to operate it as a paperboard production machine from April 2020.」

「In the paper and paperboard business during the cumulative second quarter of the current consolidated fiscal year, we advanced efforts to optimize the product mix, including shifting production from media-use paper to packaging and packing-use paper, by leveraging the Mishima Mill's ability to flexibly change its products in response to changes in demand structure. At the same time, we worked to consolidate and eliminate product varieties to improve production efficiency.」

「In response to declining domestic demand for media-use paper due to lower circulation of newspapers and publications and the shift to electronic media, we have been optimizing the product mix by leveraging the Mishima Mill's ability to flexibly change its products, and have worked to ensure the penetration of price revisions for information paper, following printing paper and paperboard in the previous fiscal year. In line with growing demand for plastic reduction, we have also worked to expand sales of kraft paper and newly launched “Eripla Paper” as an environmentally friendly plastic alternative material.」

「We will convert the printing paper production equipment at the Mishima Mill into paperboard production equipment with one of the highest levels of competitiveness in Japan, as scheduled for April 2020, and shift the Mishima Mill's product mix to kraft paper, thereby strengthening exports to Asian countries, including China, where demand is strong.」

「Excluding newsprint, printing paper demand continued to decline, and both sales volume and value fell below the same quarter of the previous year.」

「In the printing paper business within the paper and paperboard segment, demand for domestic newspapers, publications, flyers, catalogs and other printed materials has declined further, and we are working to improve profitability further by shifting the product mix toward high-value-added products such as information paper, packaging paper and functional materials.」

「Information paper, packaging paper and functional materials, for which we have been advancing structural changes in the product mix, exceeded the same quarter of the previous year in both sales volume and value.」

「To turn the expected future decline in demand for coated paper into improved profitability, we stopped No. 16 paper machine at the Mishima Mill in April 2018. The machine accounted for approximately 8% of production volume.」

「Meanwhile, as demand for newsprint and printing paper declines year after year, we are pursuing structural reform by expanding sales of value-added products such as uncoated paper and functional materials.」

「We continue to improve profitability through structural reform of the sales mix, centered on shifting the product mix toward value-added products such as uncoated paper and functional materials, and shifting the customer mix through expanded sales of folio products to paper wholesalers.」

「In response to declining domestic demand for printing paper, we are improving profitability by reviewing the sales mix through a shift in the product mix toward value-added products such as uncoated paper, and a shift in the customer mix centered on expanding sales of folio products to paper wholesalers.」

「By using paper machines capable of producing diverse pulps and multiple grades, we are shifting product mix in response to market trends, including shrinking demand for woodfree paper, and moving toward higher-margin products. We continue working to improve the earnings structure by shifting from coated paper to uncoated paper and packaging paper and increasing the proportion of flat-sheet sales, among other measures, and plan to add and commission additional flat-sheet processing machines in fiscal 2017.」

「Domestic demand for printing and information paper and packaging paper declined from the same quarter of the previous year. As a result of efforts to improve the sales product mix, sales volume exceeded the same quarter of the previous year, but sales value decreased due to lower domestic market prices.」

「Domestic demand for printing and information paper and packaging paper declined from the same quarter of the previous year. Although improvements in the sales product mix and customer mix lifted sales volume above the same quarter of the previous year, sales value edged down due to lower domestic market prices.」

「During the fiscal year, in the paper and paperboard business, we are promoting the structural transformation of the woodfree paper business and thorough cost reductions, as well as strengthening the paperboard and corrugated products businesses.」

「By taking advantage of paper machines capable of producing a diverse range of pulps and multiple grades, we have been transforming our earnings structure in line with market trends by shifting from coated paper to uncoated paper and packaging paper, increasing the proportion of flat-sheet sales, and shifting toward product grades suited to production and sales demand.」