Tokyo, December 5, 2001 - Nippon Unipac Holding announced today that the ongoing integration of Nippon Paper Industries Co., Ltd. and Daishowa Paper Manufacturing Co., Ltd. within the Nippon Unipac Holding Group will produce more significant synergy effects than initially expected, resulting in cost reductions of 52 billion yen by the fiscal year 2003 ending March 31, 2004. This total is 2 billion yen more than the 50 billion yen in across-the-board savings that was originally projected earlier this year and was reached under the leadership of the Committee for the Rapid Realization of Synergy Effects, which was established this past February to maximize the benefits of the integration.

 

Cost reductions of 11 billion yen have already been achieved during the first half of this fiscal year (April 2001-September 2001) as a result of the integration's synergy effects.

 

Raw materials : 15 billion yen

Variable costs : 11 billion yen

Sales and distribution costs : 8 billion yen

Financing costs : 3 billion yen

Fixed costs : 10 billion yen

Production restructuring : 5 billion yen

 

In addition to the 52 billion yen in cost reductions, Nippon Unipac Holding estimates that further savings of 7 billion yen will be realized from the restructuring of paperboard operations, including the planned shutdown by fiscal 2003 of the Kameari mill, which is operated by Japan Paperboard Industries, Co., Ltd., a subsidiary of Nippon Paper Industries.