Nippon Paper to Reduce Production Capacity, Trim Workforce

Aug. 4, 2011- Nippon Paper Group, Inc. (President: Yoshio Haga) 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 Groupís domestic paper production capacity.

It also calls for the Group to withdraw from the production of certain unprofitable paper products.

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 Groupís paper business as well as to achieve a rapid recovery at the affected Ishinomaki Mill."

See a detailed account of Nippon Paper's: Revitalization Plan

SOURCE: Nippon Paper Group