ABOUT USPresident's Message

Shaping the Future with Trees

We have reached the second year in our fifth medium-term business plan in 2016. While working to enhance the competitiveness of the existing businesses, as our key revenue base, we intend to further accelerate efforts to change our business structure, with the aim of creating new value unlike anything that has gone before. That is the challenge we have set ourselves, as a comprehensive biomass company shaping the future with trees.

Our strength lies in our capacity to structure a balanced group of businesses revolving around wood, as a central renewable resource. With characteristics suited to such a diverse range of uses, we firmly believe that wood is the ideal material to play a leading role in the modern world. We continue to engage in a wide range of business activities, from developing forest resources through measures such as afforestation, through to producing logs and lumber, building materials, and manufacturing paper from wood fibers. We also produce biochemicals that make the most of wood components, and provide energy services too. Recently, we have been focusing particularly on expanding initiatives in the energy sector, with the aim of contributing to stable power supplies essential for our modern society, making the most of natural energy sources such as solar and wind power as well as wood biomass. In the biochemical sector meanwhile, we have been working on the development of cellulose nanofibers (CNF), as a promising next generation material. In the fall of 2015, we successfully developed the world's first functional CNF on a commercial basis. These have since been used as highly effective odor eliminating sheets in the group's adult diapers. In May this year, we finalized plans to build a large-scale production facility for CNF at our Ishinomaki Mill. We intend to speed up development in the future, to help improve mass production technology and expand potential uses.

In terms of our existing business meanwhile, paper is increasingly being used for a wide range of functions such as wiping and wrapping, in addition to being used to communicate information as part of our everyday lives, as a material made from wood biomass. We therefore expect to see potential growth in areas such as healthcare and packaging. Our papermaking business is likely to expand in the future, by replacing more and more materials with paper. To tap into the considerable potential that paper still offers in that respect, we are actively working on new product development and service options.

We have our sights set on growth for the future, targeting markets throughout Asia and the rest of the world. To make real inroads into those markets, we intend to expand our operations by making better use of wood across the board, as well as manufacturing paper. As prime examples of the group's overseas businesses, we are looking to increase profitability at Australian Paper, while also working to strengthen ties with SCG Packaging in Thailand. We will continue to expand our business domain in line including M&A with demand in growing markets, as well as establishing a fully functional global marketing framework based on close cooperation between sales, production and R&D divisions.

To contribute to better living and cultural progress, as stated in our group mission, we are committed to achieving sustainable growth as a company in partnership with those around us, ensuring that all of our corporate activities are environmentally friendly, now and in the future.



Fumio Manoshiro,

President

Nippon Paper Industries, Co., Ltd.