Oji Holdings to Acquire Carter Holt Harvey's Pulp and Paper Business for About JPY92.3 Billion

Carter Holt Harvey Pulp & Paper includes manufacturing of a wide range of kraft and recycled containerboards for conversion into industrial packaging.

April 28, 2014 (Press Release) - Oji Holdings is pleased to announce that our board of directors [on April 26] resolved to jointly acquire the pulp & paper business of Carter Holt Harvey Limited (“CHH”), Carter Holt Harvey Pulp & Paper Limited (“CHHPP”) and certain related companies (collectively “CHHPP Group”) with Innovation Network Corporation of Japan (“INCJ”) and executed a share purchase agreement for the transaction.

[The deal has been reported to be valued at about JPY 92.3 billion (NZ$1.037 billion or USD888.5 million)]

CHHPP Group manufactures pulp, paper and packaging products in New Zealand and Australia. CHHPP Group is ultimately owned by Rank Group Limited. The transaction is subject to, among others, relevant regulatory approvals.

1. Transaction Background
In recent years, we have been aggressively expanding our overseas businesses, particularly in Southeast Asia and other emerging markets where strong growth for pulp & paper market is expected. We position paperboards and packaging products as our core products and have either acquired or built a total of 21 plants/facilities (including on-going green-field projects) in Southeast Asia and India over the past few years.

Further, we have been focusing on the forest resources business. We have been operating Pan Pac (plantation forests, lumber-processing and pulp business in New Zealand), CENIBRA (plantation forests and pulp business in Brazil) and a number of other plantation assets in Southeast Asia and Oceania, with an aim to further expand the business in Japan and globally in the near future. CHHPP Group’s 3 main businesses:

  • Pulp Business: Benefitting from its regional advantage with access to abundant softwood supplies, CHHPP manufactures bleached/unbleached softwood kraft pulp products such as NBKP and NUKP. The acquisition of CHHPP will allow us to offer broader products and solutions to our customers adding to our Pan Pac's BCTMP and CENIBRA's LBKP.
  • Paperboard Business: Using its softwood kraft pulp as the key raw material, CHHPP manufactures paperboard products which are known to be more intense and stronger than recycled paperboard products that are provided by its competitors in Asia. As the market in Asia continues to expand, we seek to market CHHPP’s outstanding products to various customers to meet their needs for durability, while using CHHPP’s paperboards as raw material for our own packaging products going forward.
  • Packaging Business: CHHPP Group manufactures packaging products in 5 facilities in New Zealand and Australia, in addition to its paper bag and paper cup businesses. As we expect that the trade volume among Asia Pacific Rim countries continues to increase, we believe that the business will grow in parallel with robust demand in the region.

Other important points is that the acquisition of CHHPP Group would also provide us with access to softwood resources, whereby expanding Oji Group's wood product business in the region and allowing us to develop and market its advanced materials as well as new materials made from woods.

Our co-investing partner, INCJ is a corporation incorporated in 2009 under the Industrial Competitiveness Enhancement Act. Jointly funded by the Japanese government and 26 Japanese private enterprises, INCJ aims to provide financial, technological and management support to promote the creation of next-generation businesses through “open innovation” achieved by increasing the flow of technology and expertise beyond the boundaries of existing organizational structures. INCJ fully appreciates and understands the importance of Oji Group's global expansion strategy, and seeks to support us so as to strengthen Japanese presence in global forestry sector and potentially create further expansion opportunities for other Japanese corporations.

SOURCE: Oji Holdings