April 14, 2005

Prices of CMC Products to Rise

Nippon Paper Group
Nippon Paper Chemicals Co., Ltd.

Nippon Paper Chemicals Co., Ltd. (President: Akira Machihara) of the Nippon Paper Group has decided to raise the prices of its carboxymethyl cellulose (CMC) products, starting with those shipped on May 21. The price increases will be between 5% and 10%, and negotiations with customers are expected to start shortly. Prices of exported CMC products were already raised last fall, to improve profit margins.

CMC products exhibit various functional properties such as viscosity, dispersibility, adhesiveness, emulsion stability, protective colloid formation, moisture retention capacity and film formation, and have been used for a broad array of applications related to food, medical and pharmaceutical products, cosmetics, fibers, building materials, paper production, civil engineering work, feed, ceramics and agrichemicals.
However, profit margins from the business have deteriorated because of a rise in prices of major source materials such as highly pure pulp, monochloroacetic acid and caustic soda, as well as the recent surge in oil prices and energy costs.

Nippon Paper Chemicals has made every possible effort to absorb the rise in costs produced by the rise in source material prices. However, the Company has determined that alternative options have been exhausted, and has consequently decided to raise its product prices.