PaperAge Magazine

Japan Pulp & Paper Acquires Premier Paper Group in the UK

Premier Paper Premier Paper Group is the second largest paper merchant by sales in the UK with an annual turnover of GBP233 million and a workforce of 480 employees.

July 5, 2019 - Japan Pulp & Paper Co., Ltd. (the Company) hereby announces the adoption of a resolution at a Board of Directors meeting held today formally approving the acquisition of 100% of the beneficial interest in the issued share capital of RADMS PAPER LIMITED (RADMS), with 60% of the legal interest being acquired today and 40% of the legal interest being acquired in one year's time, making it a subsidiary of the Company and the entering into of a share transfer agreement to that end. RADMS is the sole owner of PREMIER PAPER GROUP LIMITED (PREMIER), which is predominantly involved in the import and wholesale of paper and packaging materials throughout the United Kingdom (UK).

Purpose of the Share Acquisition

In response to changes in the business environment, the Company has been proceeding with a reform of its business activities and organizational structure in line with its Group Medium-term Business Plan 2019 — Paper, and beyond — striving to expand its activities in its core Japan Wholesaling business field and also in its other major business segments of Non-Japan Wholesaling, Paper Manufacturing & Processing, Resources & Environment, and Real Estate Leasing.

In its Non-Japan Wholesaling segment, the Company has been concentrating on bringing paper merchants with a significant market presence in their respective regions of the globe into the Japan Pulp & Paper Group (the Group). To this end, in 2010 the Company acquired Gould Paper in the USA; in 2012 it invested in India's KCT Trading; in 2017 it purchased Ball & Doggett Group; and in 2018 it acquired Spicers Paper Singapore (Now OVOL Singapore) and Spicers Paper Malaysia (Now OVOL Malaysia) and their networks in Southeast Asia, and has been working to enhance the sales capacity and to improve the profitability of each entity. The Group currently extends to 94 operation sites situated throughout 21 countries and will continue to take on challenges as one of the world's leading paper distribution enterprises.

Demand for paper and paperboard in the UK is approximately 8.5 million tons annually. The UK is heavily reliant on imports from continental Europe to meet a large portion of this demand, and as such paper merchants with warehousing and distribution functions have an important role to play. PREMIER, RADMS' operating company and the second largest paper merchant by sales in the UK, has an annual turnover of GBP233 million, a workforce of 480 employees, operates out of 18 facilities, and has approximately 3,000 customers. PREMIER utilizes a comprehensive low-cost operation system and has been able to maintain its increasing sales and profits by concentrating on growing markets, such as packaging, converted paper products, and the sign and display field, which includes digital applications.

Through this capital participation and by strategically combining PREMIER with its global network, the Company aims to contribute to the expansion and development of its wholesale business activities in the UK. Despite the anticipation that a “no-deal” withdrawal from the European Union would temporarily lead to the deceleration of the economy, we believe that PREMIER with its efficient inventory and distribution network across the UK will extend its presence in the market in the mid to-long term.

The Company will maintain the option to make an additional share acquisition with the effect of making RADMS a wholly owned subsidiary approximately one year following this capital participation. The schedule, overview and other details concerning this additional share acquisition will be announced once they have been decided.

Japan Pulp and Paper Company Limited's major activities include import and export, sale, distribution and manufacturing of paper, paperboard, pulp, paper-related products, and real estate leasing; generation, sale and provision of electricity. To learn more, please visit: www.kamipa.co.jp.

SOURCE: Japan Pulp and Paper Company Limited