In the paper industry, where restructuring costs are weighing heavily, concerns have been raised over interest-bearing debt and liquidity vulnerabilities. Indicators based on the Autumn 2026 issue of Kaisha Shikiho, a Japanese company handbook, show a serious decline in years to repay debt and the equity ratio, highlighting the severity of the situation.
Against a backdrop of structurally declining demand for paper and the advance of paperless operations, the paper industry is exploring a shift to higher-value-added products and efforts to develop new businesses. At the same time, however, companies constantly need funding for equipment upgrades and environmental measures, leading to greater reliance on borrowings and a buildup of debt.
As debt dependence increases across the industry, there is a view that continued interest-rate increases would raise the risk of interest payments squeezing profits and putting pressure on liquidity. The period during which past earnings and cash cows can make up the shortfall is becoming limited, and financial vulnerabilities are becoming apparent.
Based on the Autumn 2026 issue of Kaisha Shikiho, a Japanese company handbook, the analysis examines multiple indicators, including years to repay debt, calculated by dividing interest-bearing debt by net income, and the equity ratio. The findings suggest that the industry’s overall financial condition is difficult. As one-off factors, the impact of Mitsubishi Paper Mills’ loss when its factory was damaged and Oji Holdings’ property sale has been excluded from the main text.