Nippon Paper to Reduce Production Capacity - Papermart

Nippon Paper to Reduce Production Capacity

5 August, 2011

Nippon Paper Group, Inc. has developed a plan to revitalize the Group paper business. According to the company, the plan is not only designed to achieve a recovery at mills affected by the March 11 Great East Japan Earthquake, but also to respond to the severe business environment in the Japanese paper market.

The plan calls for a shutdown of some facilities – focusing on facilities with high manufacturing costs – that combined produce 800,000 tons of paper a year, equivalent to approximately 15% of the Group’s domestic paper production capacity.

In addition, about 1,300 workers will be affected as a result of the reduction in production capacity. In step with the shutdown of the facilities, the Group will reduce fixed costs to boost its competitiveness. It also enables various cost reductions, including a zero-oil initiative at major mills, to manage the risk of a further rise in the price of fossil fuels in the future.

The Nippon Paper Group said that it will move forward with the plan, “aiming to strengthen the Group’s paper business as

well as to achieve a rapid recovery at the affected Ishinomaki Mill.”