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Paper Business

We continuously pursue to strengthen our competitiveness and customer satisfaction, aiming to expand our export business under a firm domestic sales foundation

Business Strengths and Characteristics

The main product of the division is printing and communication paper used for books, magazines, catalogs, and brochures. Within the product line-up, coated paper is our key product, and its production volume in the year 2015 had recorded 2nd in the domestic industry. Furthermore, our sales of uncoated, colored wood-free paper has continued for more than 60 years. With its abundant product line-up, we are keeping 65.7% of domestic market shares which shows our brand is being favored by a wide range of customers.

Business Environment and Performance

Total domestic shipment in the year 2015 for printing and communication paper manufacturers had fell below the level of the previous year. Decreasing demand on paper has not been restrained, due to the continuing digitalization of media followed by the spread of smartphones and tablets, the downsizing of advertisement on paper media, and the progressing low birthrate. However, by working on combining the respective benefits of paper and digital mediums, and by being perceptive on the functionality of paper, we will bring demand to recovery.
In this severe market environment, with individual attempts with end users, we'll continuously maintain price and pursue optimum production and efficiency to steadily provide high quality products.

Production of printing paper by product type Production of printing paper by product type

In regard to exports, our performance in the year 2015 was 216,000 metric tons. Major destination countries and areas are Hong Kong, South Korea, Taiwan, North America, and Southeast Asia, and our biggest exporting market is Hong Kong with an annual approx. 30,000 metric tons in A2 grade coated paper.
As well as to East Asia and Southeast Asia (Taiwan, Korea, Vietnam, Malaysia), we are exporting approx.
50,000 metric tons in A3 grade coated paper for flyer and calendar use. In the year 2016, we will continue to focus on further expanding, boosting our competitiveness in overseas markets, and developing new sales channels. We will work on our measures to build an optimal production system in our product mix that also includes the addition of domestic and overseas pulp sales.

Future Business Strategy

Facing the last year of “C-next,” the Paper Business Division will engage in full-fledged efforts to enhance our competitiveness, focusing on the Niigata and Kishu mills, as a core business segment of the Hokuetsu Kishu Paper Group. By responding to rapid changes in the external environment, we will build a top quality production and ales framework to compete in the global market. In terms of sales, we will maintain our product value by selling with great care and keeping domestic sales share. Concerning exports, we will aim to increase sales volume and advance the business strategy of the Paper Business Division as detailed in “C-next.”

Specifically, we will focus on the following:

Production

  • (1) Pursue further ideal production at the Niigata and Kishu mills and ensure stable operations and supply.
  • (2) Improve quality stability and strengthen the trust that our users have.
  • (3) Thoroughly implement cost reduction and efficiency improvement initiatives.

Sales

  • (1) Based on domestic sales we will seek to gain customer satisfaction and promote the development of high value-added and new products.
  • (2) Work to develop new uses for wood-free colored paper and further expand our market share.
  • (3) Implement regular visits to our users by staff at our mills to strengthen the relationship further.
  • (4) Development quality overseas markets wish for, and greater effort to promote and expand export sales.

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Measures for an optimal printing and communication paper production system

Promoting enhanced competitiveness

Amidst the remarkable decline in printing and communication paper demand, we promoted enhanced competitiveness and proposed Hokuetsu Kishu Paper products with this comprehensive strength.
First, we implemented periodic and systematic user visits with a joint approach between our mills and sales, and we plan to strengthen the relationships with our customers. Also, we are accumulating each of our customers' requests for quality, and after planning a precise approach for the market overall we will seek out possibilities for development of new products as well as access to new applications.
Particularly, because we anticipate a decline in the demand for paper media, we are thoroughly focused on paper and seek to pursue a positive stance of “what paper can do because it is paper” as we continue to make proposals for the creation of paper demand.

Expand our market share for colored wood free-paper

Expanding sales of colored wood free-paper is an important topic to be carried out in our “C-next” plan. In order to increase our market share further, it is necessary not only to protect our existing regular products, but also propose new possibilities to the market.
In the first half of 2015, we created an unprecedented colored wood-free paper printing sample book, and created sample books like color guides with 10% -100% printing for each of the 33 color variations, and introduced them to distributors and users. By doing this, we received designations from designers, which led to an increase in cases of them being adopted by publishing-related companies.
In the latter half of the same year, we implemented a colored wood-free paper idea contest. We collected more than 1,000 samples from this contest.
These have been adopted in a variety of applications with an emphasis on functionality that include not only the main application of commercial printing, but also publishing and stationery. Additionally, while working together with distributors we are proactively engaged toward the revival of demand and new application development.

Toward export sales of 300,000 tons

We have focused efforts on expanding export sales since our No. 9 paper machine, one of the largest in the world, started operating in 2008. Since then, we have been able to maintain supply stability, even in 2011 when the yen was at historically high levels.
We are now seeking to increase the number of customers who understand Hokuetsu Kishu Paper's quality. While creating products based on the needs desired by the market and expanding our network in paper processing and other fields instead of limiting ourselves to the field of printing paper, we will aim to realize our target of export sales of 300,000 tons.

Changes in Numbers of Export Sales and Share by Destinations of Production in the Niigata Mill (2008/2011/2015)

Changes in Numbers of Export Sales and Share by Destinations of Production in the Niigata Mill (2008/2011/2015)

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