Nippon Paper is under pressure to rebuild its finances and business through asset sales and exits from unprofitable businesses, as more than ¥800 billion in interest-bearing debt has been compounded by a major accident and earthquake damage.
Nippon Paper, one of Japan’s two leading paper producers, faces worsening profitability as the paper market contracts, while borrowing has increased following overseas acquisitions. Interest-bearing debt has reached ¥842.2 billion as of the end of June 2026. Net debt stands at 1.2 times equity and 1.74 times shareholders’ equity, a level warranting caution from the standpoint of financial soundness.
Against this financial backdrop, a major accident and earthquake damage have added to the pressure. In May 2026, a chemical tank collapsed at a plant operated by NDP, the U.S. subsidiary acquired in 2016, killing 11 people and injuring 8. The plant has suspended operations, increasing uncertainty around business operations.
From the stock market’s perspective, Nippon Paper’s market capitalization remains below those of peers Rengo and Daio Paper, making the success or failure of a strategy that includes restructuring, including a shift away from paper, a key focus. Going forward, improving its capital position through asset sales and reviewing its business structure, including exits from unprofitable businesses, will be issues for consideration.